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This is the question typical I suppose. We do not qualify for load modification make too much money etc etc.
*Current home 23yrs left 6.5% underwater 55K
*Credit score 670's
We live in Louisiana.....would walking away, but buying a new house before this becomes 30 days late make sense?
Currently we can buy nicer house, at a lower rate 4.50% at least, put 15-20% down and once closed "strategically default" on the other? Our note would also be 400/mo less, nicer house, and save 7 years on the length of the mortgage.
As long as you can prove to the banks you can safely cover both new home and old home at the same time along with putting at least 20% down it can work.
It could be fraud if you are strategically doing it but very hard to prove. You could always say you tried to sell home and thought u could....
The key is to prove u can cover both mortgages at same time. And banks will not consider rental or potential rental income unless you can prove you have been renting out home for at least 12 months or you have at least 20-30% equity in your old home (which you don't)
So that's the insight.
Buy and bail loophole was closed by early 2010 by the lenders. Sorry. You are a few years too late.
Remember what u read in the news is always sugar coated. The devil is always in the details. Most people who walk away either have no hard assets banks can seize or live in non recourse states like California.
You are asking how to commit mortgage fraud, a felony.
Happens all the time. Chances of getting charged are slim to none. Most who are charged had multiple homes in foreclosure and that's how it was figured out.
But a small time person trying to do buy and bail. Chances of getting caught are extremely small.
The key is can OP afford 2 mortgages safety? If they cannot than this question becomes a mute point.
You could buy the new house and then ask your lender for a short sale on the current house. That shows you're trying to sell it for market value, just that market value is now lower than the value when you bought it.
Completely walking away would be considered fraud, especially since you posted your intentions on a public forum.
You could buy the new house and then ask your lender for a short sale on the current house. That shows you're trying to sell it for market value, just that market value is now lower than the value when you bought it.
Completely walking away would be considered fraud, especially since you posted your intentions on a public forum.
The real issue is affording both homes. Many people doing buy/bail aren't in a position to show lenders they can afford 2 loans at the same time. If they can afford 2 homes, they probably wouldn't be thinking about buy/bail to began with.
Those 2 stories are about people lying on income/jobs etc.
If someone can prove they can afford 2 mortgages on their income than it's extremely hard to prove buy and bail. Than again, as I just posted, most people who can afford and show they can carry 2 mortgages usually aren't thinking about buy/bail.
Those 2 stories are about people lying on income/jobs etc.
If someone can prove they can afford 2 mortgages on their income than it's extremely hard to prove buy and bail. Than again, as I just posted, most people who can afford and show they can carry 2 mortgages usually aren't thinking about buy/bail.
It's mortgage fraud and people ended up fined/in jail. That was my point.
I am not suggesting that the OP is likely to end up prosecuted ( we don't have the statistics on this anyway), but it is possible, and I would never advise somebody to commit a crime. The OP specifically revealed that buy and bail is in his/her mind. Clearly not all people who qualify to carry two homes plan to walk on the first one.
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