[roger86]

My parents bought a house about three years ago, it resulted that the house had extensive structural damage. The house cost about 125 thousand and the repair cost is about 40 thousand. Because of that reason they are thinking about losing the house.
They can pay for the house but are just choosing not to, how would this affect them other than their credit which is not really a worry to them at this point because I could just buy another house for them.

[Dave1215]

It will affect their credit for a minimum of 7 years possibly longer.

If someone borrows money and then decides that they just don't want to pay for it they are in effect stealing from the one they borrowed from... I would be more worried about integrity than credit.

Its a very different situation when you choose to take some ones money from them (by not repaying when you have the ability) as opposed to someone that has to have a foreclosure for a legitimate reason (like lost income or severe unexpected medical issues that sucks the money up).

[MsBea_1]

They really should protect their credit. Credit reports are used for almost everything these days such as in determining their auto and home insurance premiums and deductibles. Some insurance companies don't even want customers that aren't credit worthy.

They should have had the house inspected before buying it which would have pointed out any problems with the house.

[yman97]

That's probably the worst idea I've ever heard of. What if we all decided to not pay for something that we bought using credit? There's a BIG difference between not being able to pay and choosing not to pay. Like Dave says, I think this is an issue of integrity.

[mattpoulsen]

Besides their credit, how about their integrity and honesty?? As you stated, you can just "buy another house for them." What they're doing is effectively theft. They are capable of paying off the debt, but are just choosing not to do so. Where I grew up that was and still is considered WRONG!

Furthermore, if you have the funds then why don't you give them the $40,000 to fix the house and then have them sell the house. Or sell the house as it is and pay the bank the difference. They can then go out and get a loan on their own or with your backing.

Finally, the bank could actually sue them for the other $40,000. This usually isn't done because the party doesn't have any funds and legal action would be an inefficient use of time and money (i.e., you can't get blood from a turn up scenario). However, as you stated, they are capable of making the payments. The bank may very well take action to recoup the difference...and they should!!

So, your parents credit will be destroyed and your parents will still end up having to pay the $40,000 back. Plus, they'll have a nice chunk of attorney's fees and have a judgment sitting over their head.

Besides the financial ramifications, did doing the right thing even enter your or your parent's mind??

[Dave1215]

I thought I was going to be in the minority when I mentioned the integrity issue, very refreshing to see the other comments in that same theme.