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Seems like you might want to explore declaring bankruptcy after the foreclosure to escape the obligation from the HELOC. You could probably throw off other obligations as well. Talk to a bankruptcy specialist.
The story on 60 min. Sunday was maybe a wake-up call for a lot of people out there that just below the radar. Those who CAN keep paying , but see theit home as a bad investment, and want to cut and run. There was no discussion about home equity loans,second mortgages , etc., just that their homes were underwater, upside down , and it was time to go. Corporation's do this all the time was the answer, so, why not the home owner.
I do see a problem with the co mingling of funds for other purposes than reinvesting in the home, in business , people have gone to jail because of these practices. Maybe home ownership should be treated more like a business , than just a quick way to get money. The fix may need to start with the IRS. Home equity loans should only be used to improve the value of the property, and not to buy a new car , or take a vacation to Hawaii.
The story on 60 min. Sunday was maybe a wake-up call for a lot of people out there that just below the radar. Those who CAN keep paying , but see theit home as a bad investment, and want to cut and run. There was no discussion about home equity loans,second mortgages , etc., just that their homes were underwater, upside down , and it was time to go. Corporation's do this all the time was the answer, so, why not the home owner.
I do see a problem with the co mingling of funds for other purposes than reinvesting in the home, in business , people have gone to jail because of these practices. Maybe home ownership should be treated more like a business , than just a quick way to get money. The fix may need to start with the IRS. Home equity loans should only be used to improve the value of the property, and not to buy a new car , or take a vacation to Hawaii.
Home ownership should NEVER have been treated as a "quick way to make money". Where in the heck did this idea ever come from? Until the last 10 or 15 years home ownership was just to ensure that you had a stable, secure place to live and raise a family while not being at the mercy of a landlord who could raise your rent, sell the place from under you, limit or deny changes to improve your lifestyle, etc. And over time, as you paid down the loan, you would develop equity as a result - from paying off the loan and NOT necessarily from appreciation in the value of the property. It's the mentality that somehow developed that made people think the intent of owning a home was to make money that got us in the economic mess in the first place.
Home ownership should NEVER have been treated as a "quick way to make money". Where in the heck did this idea ever come from? Until the last 10 or 15 years home ownership was just to ensure that you had a stable, secure place to live and raise a family while not being at the mercy of a landlord who could raise your rent, sell the place from under you, limit or deny changes to improve your lifestyle, etc. And over time, as you paid down the loan, you would develop equity as a result - from paying off the loan and NOT necessarily from appreciation in the value of the property. It's the mentality that somehow developed that made people think the intent of owning a home was to make money that got us in the economic mess in the first place.
Home owners did not just wake up one morning and come up with this idea on their own. It was the financial industry that pushed for the very things that has tanked the housing market. ... I agree , home ownership should be a need and Nessy and not a back-up source for credit cards, car loans, and expensive vacations. Marketer have promoted the equity tool to the point that the Public often was more interested in the side benefits of home ownership , than the real need for housing. We need to take a lesson from other countries. Just to our north , Canada has full recourse on home loans, no exceptions.,..yet , more Canadians are home owners than US citizens per capita. Foreclosures are rare also in Canada, people save, they pay higher down payments, and move around less....A lesson can and should be learned...but , again it all starts with the Government, rules ,regulations that put a stop to the crazy lending and borrowing practices of the banking industry. The license to steal starts there...not with the prospective or current home owner.
Home ownership should NEVER have been treated as a "quick way to make money". Where in the heck did this idea ever come from? Until the last 10 or 15 years home ownership was just to ensure that you had a stable, secure place to live and raise a family while not being at the mercy of a landlord who could raise your rent, sell the place from under you, limit or deny changes to improve your lifestyle, etc. And over time, as you paid down the loan, you would develop equity as a result - from paying off the loan and NOT necessarily from appreciation in the value of the property. It's the mentality that somehow developed that made people think the intent of owning a home was to make money that got us in the economic mess in the first place.
What happened 10-15 years ago? Congress changed the tax code on the sale of primary homes in 1997. Before that, people had to roll whatever equity they had into a newer home to avoid capital gains taxes. But in 1997, Congress starting letting people sell their homes for profit and had the 250/500K tax exclusion as long as they met certain criteria (own/lived in primary home for 24 months out of 60 and certain other exclusions).
It's amazing when you give people "tax free" incentives...that begins to make people want to change homes often as long as they don't have to pay taxes on their earnings.
Than the lax lending standards, the low or no downpayment options and the rest is housing boom/bust history.
Home Equity Lines of Credits are very dangerous games to most people who do not have a strong financial pro folio. Unforunately so many Americans used their Home Equity Lines of Credit as their only means of emergency savings. So often, my friends ask me why I keep over 150-200K cash in money markets/short term CDs. Simple, that's my emergency savings and I don't ever have to pay it back. It's not "paper money".
Banks call a note if you move out? not true. even before 2006 that was a tale. banks do not call notes that are not delinquent. Its threatened, gossipped, heard of etc but in reality the banks have no person in their employ that would call a note that is currently is paying. can you imagine the poor loan official that calls it and loses the bank an average of 100k per house getting chewed out? its about money einstien
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