Foreclosure and short sale not always something that is over and done at closing (2013, foreclosures)

[bentlebee]

Originally Posted by PhotoProIP

How is it even possible for someone that abandoned a property to buy another one? How do they bypass credit checks? Or better yet: who are these lenders continually borrowing money to people who had properties foreclosed on?

I don't understand how these people are STILL able to buy homes!? A foreclosure completely ruins someone's credit, so how can they get MORE credit to buy another house? This makes no sense.

The bought prior to letting go and put in the other persons name. It happened twice on our street and we thought the people who had multiple kids and even a few together were married but that was not the case so the bought in the other persons name and the other one defaulted and they lived happily ever after. Both got married shortly after they bought the other house and under Florida law that house becomes marital asset so the other one becomes half owner even though the mortgage is in one name.

[PhotoProIP]

Originally Posted by bentlebee

The bought prior to letting go and put in the other persons name. It happened twice on our street and we thought the people who had multiple kids and even a few together were married but that was not the case so the bought in the other persons name and the other one defaulted and they lived happily ever after. Both got married shortly after they bought the other house and under Florida law that house becomes marital asset so the other one becomes half owner even though the mortgage is in one name.

WOW! Speechless!

[EngGirl]

Originally Posted by PhotoProIP

How is it even possible for someone that abandoned a property to buy another one? How do they bypass credit checks? Or better yet: who are these lenders continually borrowing money to people who had properties foreclosed on?

I don't understand how these people are STILL able to buy homes!? A foreclosure completely ruins someone's credit, so how can they get MORE credit to buy another house? This makes no sense.

I knew people who lived without paying a penny for YEARS and then went and purchased a new house with either a cash or big down payment... It's ridicules and I am still convinced prices for houses started increasing around the same time when these defaulters got cash and came back to the market...

[bentlebee]

You are right. Many previous short sales owners have become buyers and bought with conventional loans taken out with a different lender and the money they kept which was meant to pay their monthly mortgage payment was used towards a purchase else where...very smart and calculated as long as the lenders will not go after them and there have already been some of these cases where people woke up to call or mail getting a judgment and lien against their new house.

The prices went up due people buying and these home owners were buying.

Some of them will not sleep too tide for decades but people with a real hardship shouldn't have to worry and the smart ones got a deficiency waived in writing....like most of our clients.

[PhotoProIP]

So, why is no one stopping these people? All they do is harm the economy not help it...

[EngGirl]

Originally Posted by PhotoProIP

So, why is no one stopping these people? All they do is harm the economy not help it...

Who and main question HOW they could be stopped? Some people are planning strategic defaults in advance, so legally everything is fine. Most lawyers are helping to treak the system...

[gulfer]

It's been going on for decades actually. We just really felt it because so many people did it in the late 2000's.

I used to feel that if you took out the mortgage, it is your responsibility PERIOD. But after seeing so many situations (and they all seemed a bit different) I can sympathize with many of them.

Congress pushed banks to make more loans to lower income people back in the 80's and 90's. It just festered from there. People were allowed to take out home equity loans to do what they wanted with the money. I know of people that used the money to pay off almost 50K in credit card debt, buy new vehicles and travel all over. Then the house price fell and they handed back the keys.

Banks got screwed, but they screwed over enough people. Then tax dollars bailed them out. But they have been getting fined BILLIONS. But hard to throw anyone in jail because the laws were made to basically give them loans. Most banks made enough on the people that continued pay their bills, but some went out of business.

No easy answer. If you go back to when my parents needed home loans they required 20% down and interest rates were above 8% all the way to 18%.

Again, I don't side one way or another. But if someone can show they have a little debt to income ratio and are making enough money, they are getting home loans again.

While they do harm the economy but defaulting, it helps the economy by buying a home. A new home keeps people working and buying a home from someone allows them to buy another one. And so on and so on. I have read articles (don't believe them all) how much of a percentage of work that housing actually creates and it's remarkable.

Wait until we allow another 11 to 20 million illegal immigrants to remain here. They are going to want to live the American way. Will be something to watch.

[bentlebee]

Great post!

Many factors came into the equation causing this. Lying buyers about their real income, mortgage brokers steering them into bad loans to get higher commissions given for certain loans they closed on, lenders who failed to verify income, etc.

With a $10 an hour you can't afford a $200k home.


In the future short sales may not be offered since that wasn't there in the past either.

Debt forgiveness is not longer in place so it all may change a little bit but there will always be people who are one step ahead until they get caught.

Originally Posted by gulfer

It's been going on for decades actually. We just really felt it because so many people did it in the late 2000's.

I used to feel that if you took out the mortgage, it is your responsibility PERIOD. But after seeing so many situations (and they all seemed a bit different) I can sympathize with many of them.

Congress pushed banks to make more loans to lower income people back in the 80's and 90's. It just festered from there. People were allowed to take out home equity loans to do what they wanted with the money. I know of people that used the money to pay off almost 50K in credit card debt, buy new vehicles and travel all over. Then the house price fell and they handed back the keys.

Banks got screwed, but they screwed over enough people. Then tax dollars bailed them out. But they have been getting fined BILLIONS. But hard to throw anyone in jail because the laws were made to basically give them loans. Most banks made enough on the people that continued pay their bills, but some went out of business.

No easy answer. If you go back to when my parents needed home loans they required 20% down and interest rates were above 8% all the way to 18%.

Again, I don't side one way or another. But if someone can show they have a little debt to income ratio and are making enough money, they are getting home loans again.

While they do harm the economy but defaulting, it helps the economy by buying a home. A new home keeps people working and buying a home from someone allows them to buy another one. And so on and so on. I have read articles (don't believe them all) how much of a percentage of work that housing actually creates and it's remarkable.

Wait until we allow another 11 to 20 million illegal immigrants to remain here. They are going to want to live the American way. Will be something to watch.

[PhotoProIP]

Originally Posted by EngGirl

Who and main question HOW they could be stopped? Some people are planning strategic defaults in advance, so legally everything is fine. Most lawyers are helping to treak the system...

Background checks!

Heck, they are running background checks for everything, why not this too?

[PhotoProIP]

Originally Posted by gulfer

It's been going on for decades actually. We just really felt it because so many people did it in the late 2000's.

I used to feel that if you took out the mortgage, it is your responsibility PERIOD. But after seeing so many situations (and they all seemed a bit different) I can sympathize with many of them.

Congress pushed banks to make more loans to lower income people back in the 80's and 90's. It just festered from there. People were allowed to take out home equity loans to do what they wanted with the money. I know of people that used the money to pay off almost 50K in credit card debt, buy new vehicles and travel all over. Then the house price fell and they handed back the keys.

Banks got screwed, but they screwed over enough people. Then tax dollars bailed them out. But they have been getting fined BILLIONS. But hard to throw anyone in jail because the laws were made to basically give them loans. Most banks made enough on the people that continued pay their bills, but some went out of business.

No easy answer. If you go back to when my parents needed home loans they required 20% down and interest rates were above 8% all the way to 18%.

Again, I don't side one way or another. But if someone can show they have a little debt to income ratio and are making enough money, they are getting home loans again.

While they do harm the economy but defaulting, it helps the economy by buying a home. A new home keeps people working and buying a home from someone allows them to buy another one. And so on and so on. I have read articles (don't believe them all) how much of a percentage of work that housing actually creates and it's remarkable.

Wait until we allow another 11 to 20 million illegal immigrants to remain here. They are going to want to live the American way. Will be something to watch.

This is what happens when a society is solely based on debt.

STOP the debt. Once people learn to spend what they make, this won't ever be a problem again. Pretty simple fix actually.