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I recently spoke with a person who has a great job but is interested in starting a company in home construction and development in another State. (great timing ).
Because of that he will have to sell his house which he bought at the top of the market and which was way over priced not a very smart decision. He doesn't have an ARM and he has a very well paid job and no financial trouble (he has a nice interest rate) and no problem paying his mortgage.
Since the only desire of him is to start something else, he wants to bank to take the beating and sell his house for a lower price than the mortgage he signed....
He wants the bank to take more than $ 75 K hit on a $ 230 K mortgage....
What if all of us are starting to do this?
Shouldn't there be anything that the person is liable for....or the bank just denying him to do so...he can pay his mortgage and just wants out because he over paid...he doesn't need a lower mortgage or refi since he is more than capable of paying for it and wants to buy a huge house in a different State....
Am I wrong to think this is ridiculous if the bank would even consider to do a short sale?
I asked if he would take a judgment and he told me "I want get rid of this house and don't want to loose any money, let the bank take the hit"!!!!
The bank probably will not approve the short sale and even if they did, he is LIABLE for anything less than his original mortgage by either placing a lien on all of the owner's property (bank accounts, other homes, wages, etc.) or has to pay taxes on it (and his other income) like he made the extra 75k - probably put him in another tax bracket as well (1099)... so he is probably not going to get away with it like he thinks...
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. It is most likely that you will not be able to sell a home these days if you are upside down on the loan. There would be no way for a clear title for a new owner , unless , you file Bankruptcy. Rules are pending for some easing on this front. Presently , a Judge , or court , can not restructure home mortgages on first homes , only on second homes. This is about to change , and , would be relevant to a lot of folks out there.
The next step , is to offer some help for those wanting to buy a home. That in its self would ease the glut of homes on the market , as well help those wanting to move , but can't because of their non ability to sell present home , and , at least break even.
More and more people want to walk away from their old homes and into nicer new homes, while letting the bank take the hit. They seem to think of it as savvy financial planning, based on "what's best for me." The new administration's plan is going to enable a lot of this if they don't tighten up the loopholes.
Notice what he wants to do after screwing his bank? Buy another house that is huge in another state. Sounds like the OP friend hasn't any brains at all.
Why would anyone in this economy walk away from a good paying job, screw up your credit and start a construction business? Does he think he is exempt from what is happening to everyone in this country? I shake my head at the foolishness I hear about.
Pam
More and more people want to walk away from their old homes and into nicer new homes, while letting the bank take the hit. They seem to think of it as savvy financial planning, based on "what's best for me." The new administration's plan is going to enable a lot of this if they don't tighten up the loopholes.
Yup... I am already telling everyone to take advantage of these loopholes... lol... the new adminstration wants to play socialism... let's play...
More and more people want to walk away from their old homes and into nicer new homes, while letting the bank take the hit. They seem to think of it as savvy financial planning, based on "what's best for me." The new administration's plan is going to enable a lot of this if they don't tighten up the loopholes.
That only works when you have perfect credit , or , the property is owned or financed by the Bank. Banks are not lending , ( new customers ) even if you have good credit. I have been tiring to get a loan for almost a year , no luck. I have 50 per cent equity as well.( new construction , no loans ). Its tough out there.
I recently spoke with a person who has a great job but is interested in starting a company in home construction and development in another State. (great timing ).
Because of that he will have to sell his house which he bought at the top of the market and which was way over priced not a very smart decision. He doesn't have an ARM and he has a very well paid job and no financial trouble (he has a nice interest rate) and no problem paying his mortgage.
Since the only desire of him is to start something else, he wants to bank to take the beating and sell his house for a lower price than the mortgage he signed....
He wants the bank to take more than $ 75 K hit on a $ 230 K mortgage....
What if all of us are starting to do this?
Shouldn't there be anything that the person is liable for....or the bank just denying him to do so...he can pay his mortgage and just wants out because he over paid...he doesn't need a lower mortgage or refi since he is more than capable of paying for it and wants to buy a huge house in a different State....
Am I wrong to think this is ridiculous if the bank would even consider to do a short sale?
I asked if he would take a judgment and he told me "I want get rid of this house and don't want to loose any money, let the bank take the hit"!!!!
Well when his new business fails and it all comes to bite him in the a$$ he will think that he should have been happy to have a job and stayed put in his house that he could afford. He is crazy to make any moves right now.
There are a lot of corporate customers that have had to back employees , cause they could not sell the house pending transfer. Consequently , some Companies are cutting back on transfers. Its easer to give a buyout , or a severance package , and , let the person go, when the plant closes.....
That only works when you have perfect credit , or , the property is owned or financed by the Bank. Banks are not lending , ( new customers ) even if you have good credit. I have been tiring to get a loan for almost a year , no luck. I have 50 per cent equity as well.( new construction , no loans ). Its tough out there.
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.
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