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Lenders are giving upside-down homeowners preferential rates to keep them in their homes, while denying or upcharging those in better shape.
I'm going through a "streamlined" refi and even with full documentation (I'm talking four years of full tax returns and complete asset verification), I'm paying a full percentage point higher than someone else I know who's having his underwater loan modified with no documentation, no verification and no costs. They want to stop him from defaulting and they figure I won't, so he's getting a break and I'm paying full freight. The banks have embraced our new socialist economy with gusto.
With 50% equity, I'm surprised you can't get a loan. You have to document everything these days, but the banks seem willing to lend, if you're willing to jump through all the hoops. It's a bizarro world right now.
One of the things the bank did not like , was being my own general Contractor. I am new to the area , and my home is half done. ( with cash ! )
Still looking , even tried private equity loan , at high rate , but so far no cigar. Will try again in a month or so.
One of the things the bank did not like , was being my own general Contractor. I am new to the area , and my home is half done. ( with cash ! )
Still looking , even tried private equity loan , at high rate , but so far no cigar. Will try again in a month or so.
This sounds crazy, but do you have a website? Because if you do, that might actually score points with a bank. My lender asked for my URL to verify that I'm actually self-employed. (As if the 1040s and 1099s didn't suffice.) It's insanity, but maybe there's something outside the box that can help you. Good luck!
A friend of mine just found out some secrets her hubby is keeping and well she ended up at a lawyers office. The gal is 71 yrs old and the guy told her to STOP making paym'ts on her home for 3-4 months and then file bankruptcy. She is now fighting the lawyer, she doesn't want to stop and she doesn't want to file. So even those with good credit are being told to walk!
I don't understand why so many people think their home loan is exempt from recourse. If you short sell your home , you will be responsible , for the difference.
Okay, I've been wondering this too for quite a while. I am now thinking that maybe there is just too much misinformation floating around about the process and consequences of walking away and those that intend to walk even though they don't have to aren't really weeding through the misinformation to find the hard facts before they act.
Okay, I've been wondering this too for quite a while. I am now thinking that maybe there is just too much misinformation floating around about the process and consequences of walking away and those that intend to walk even though they don't have to aren't really weeding through the misinformation to find the hard facts before they act.
I tend to agree with you. I also think many people are trying to take advantage of the economic circumstances the USA is in....rather than caring enough for the long term financial health of our country by doing the right thing and being responsible. Greed is what got us into this mess....and the lack of it will be the only thing to get us out.
I don't understand why so many people think their home loan is exempt from recourse. If you short sell your home , you will be responsible , for the difference.
I'm back to this statement again because I just happened upon an article on HuffingtonPost that claims, "most mortgages on personal residences are non-recourse loans, secured only by the value of the house [and] the lender has no recourse to any other assets of the borrower."
I'm back to this statement again because I just happened upon an article on HuffingtonPost that claims, "most mortgages on personal residences are non-recourse loans, secured only by the value of the house [and] the lender has no recourse to any other assets of the borrower."
Either most mortgages are non-recourse loans, thereby allowing homeowners to simply away
or
this is just more misinformation.
Laws vary mostly by state and by priority , as in the case of second and third mortgages. I do not know what the percentages are as to type out there , -non recourse and full recourse. My guess is , most people who have a mortgage , never read the fine print , and , don't know ether. Ether way , walking from a home debt , will affect your credit big time . It will make home ownership very difficult in the future. Commercial mortgages are different , mostly , non recourse.
1. Depending on your state, but in CA and many other states allow purchase money on a home loan to be non-recourse, but if you refi, the loan is recourse. So the smartest people in the crowd bought with 0% down and bought the biggest house they could, if prices went up they win, if they crashed, they could walk scott free.
2. The issue of paying taxes on the forgiven debt was addressed by the IRS and unless they've again changed it, the forgiven debt is now NOT being taxed, so yes OUR govt wants you to walk away, even if they don't, they are helping people walk away.
And finally the morality of walking away, in theory it's bad, but so was the bank giving credit to people that they knew could not pay back the debt and should not be getting the loans, but the originating bank just passed along the loan and did not hold it until maturity, nor care if it was paid back.
So, while walking on the house is bad, NOT walking on a house that's dropped 50% in value, when you can, is financially speaking, dumb.
Yes this all ends very ugly for the taxpayer.
Tony
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because I just happened upon an article on HuffingtonPost that claims, "most mortgages on personal residences are non-recourse loans, secured only by the value of the house [and] the lender has no recourse to any other assets of the borrower."
