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Ok, I've been reading this, and just do be fair..maybe the situation is out of his control. Here's my scenario. My husband had a job transfer to another state. I have been here for months with 3 children. OUr house has lost over 100K in value. We now cannot sell for enough to pay off our mortgage. We are not planning on forecloseing as the bank says we can get another mortgage to all be together. We will rent our current house for half of what our mortgage payment is. We will buy a cheaper new house and tighten up and make it work. We will hope in a year or 2 the market will go up enough to let us sell at a break even. If for some reason, something unexpected happens with his job, and we cannot keep up 2 mortgages, we may be in a scenario that we need to foreclose on the first home. Does that make us irresponsible? Job changes happen. Like I said, hopefully it will not come to that for us and in no way would we ever want it to..but give the guy a break there may be more to it then just deciding to get rid of the house for kicks.
Ok, I've been reading this, and just do be fair..maybe the situation is out of his control. Here's my scenario. My husband had a job transfer to another state. I have been here for months with 3 children. OUr house has lost over 100K in value. We now cannot sell for enough to pay off our mortgage. We are not planning on forecloseing as the bank says we can get another mortgage to all be together. We will rent our current house for half of what our mortgage payment is. We will buy a cheaper new house and tighten up and make it work. We will hope in a year or 2 the market will go up enough to let us sell at a break even. If for some reason, something unexpected happens with his job, and we cannot keep up 2 mortgages, we may be in a scenario that we need to foreclose on the first home. Does that make us irresponsible? Job changes happen. Like I said, hopefully it will not come to that for us and in no way would we ever want it to..but give the guy a break there may be more to it then just deciding to get rid of the house for kicks.
The o/p also said his friend drained $80K of the equity 2 years ago
somehow I don't think it's a scenario like you are describing...that i can understand
The o/p also said his friend drained $80K of the equity 2 years ago
somehow I don't think it's a scenario like you are describing...that i can understand
Yes but he never stated what he did with that $80K equity. Is it sitting in the bank, or did he go on a cruise around the world? Perhapse he used it to pay off other debts, medical bills..
This is pathetic. It doesn't sound like your friend is a very honest and moral person. Your friend sounds like someone who does not take responsibility seriously and doesn't hold himself accountable for his actions based on this. i would also think he will have an extremely hard time getting any kind of credit in his name after he forecloses on his first house. If I was his wife I would be furious at him and NOT do this and would be extremely worried if he were to ever leave especially with the house in just her name.
On a separate note why do i have this strange feeling more and more people are going to do this. Taking no responsibility for there own actions and instead just dumping their homes so someone else can pick up the pieces for them. This should somehow be illegal and those who are caught should pay BIG PENALTIES.
You know guys "take responsibility" and "accountable for his actions" is becoming hopelessly hackneyed. It tends to be right wing shorthand for what this guy did offends me.
I would in fact argue that it is a perfectly reasonable strategy to take care of his family and himself. You use the tools available to get the best outcome available. Sounds to me that is exactly what he did.
You know guys "take responsibility" and "accountable for his actions" is becoming hopelessly hackneyed. It tends to be right wing shorthand for what this guy did offends me.
I would in fact argue that it is a perfectly reasonable strategy to take care of his family and himself. You use the tools available to get the best outcome available. Sounds to me that is exactly what he did.
wooo, I thought right wing was, do what you can to get ahead, and screw everyone else? Dont blame the right wing for that attitude.
YOu know.. while this may be morally reprehensible to some..I can see the logic.
This man may have children and a family! He may have had the best of intentions to refinance OUT of the ARM mortgage into a fixed rate only to be locked out by the tightening of restrictions AND the fact that he lost equity may have put him in a negative equity situation. Yes, he took out 80K in equity.. we don't know why. Probably NOT a smart move, although he couldn't see what was coming down the line.
So.. now he has kids and a wife.. He's probably a hard working otherwise good upstanding member of society. ..but he sees it coming. AND, who knows what the rental situation is like where he lives (I know on LI it just about stinks.. not enough of it to go around especially for a family with kids)
So.. he's doing what he can for his family. Of course, the rest of the world wants to berate and make judgements on this individual. Who is he sticking it to by allowing the foreclosure on the first home.. he's sticking it to the banks and the wall street people.. who should have known better being the financial geniuses they are supposed to be that allowed this diasaster of a market to occur in the first place.
He will be searching for a place.. a STABLE and constant home for his family if he gets booted from his 1st house.. the bank..they'll suffer some monetary loss.. but they will, in the end, be just fine and won't be without a true and stable home.
So.. while it SOUNDS morally reprehensible.. I can see why he'd do it because its the best thing for him and his family.. after all THEY COME FIRST and are more important than some rich billionare banks and CEO who would happily sell their mothers up the river for a profit.
Wish I was in the position to do what he's doing.. but unfortunately Im' not.. so I'm stuck... but if there was a way, I'd do it so that I can have a home for my kids.
What your friend is doing amounts to fraud. Deliberately trying to scheme the bank is illegal. It is similar to trying to charge up the credit cards and filing BK. Unless your friend wants to risk going to jail if caught I suggest against it
People have been doing this since the beginning of financing history. Real estate investors cash out all the time to re-invest, and then occasionally pick and choose what properties they wish to continue to hold onto as the market changes.
The "shock" that people are having because this is being done by a "family man" is almost laughable.
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