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"We are bartenders who only make 17K a year on paper but in reality make 150K a year combined."
Am I wrong or are you making 116k more than you report to the tax man?
So you are hiding around 35k or more of due taxes for lord knows how many years and you want to in addition walk away from your home and stick it to the tax payers.
OK lets see here you brought the house in 04 for $318,000. Of which the seller pocketed the entire admt., of they owned it free & clear, or most likely retired their existing mortgage and pocketed the difference. Right so far? The bank gave your wife or female partner a mortgage based on a stated income, because that's all the income you wanted to substantiate. Usually tax reports are not given, because they to don't reveal all the income either, to help lower tax liability, right so far? So, to dodge taxes, and to get the house, her not yours mortgagor (bank) allowed a stated income, even though she most likely paid a few interest hits to get the loan. Which she most likely tried to lower if she and/or you put a down payment up (from undeclared income accumulation) that helped lower her rate, right so far?
Up to now, she got herself out of either a rattrap rental, or a small house she and you didn't want, and traded up...... NEVER would have gotten this place if (1) banks were willing to look the other way, with a stated income program and (2) their Under writers didn't put a stip (feature in their approval summation) that you had to cough up real income tax returns or 24 months of bank statements showing a deposit history.
Now the market turned sour, not the banks fault entirely. Are they left holding the "foreclosure bag"? Most likely. They (banks) got caught up in the frenzy of trying to get people into homes, and taken the lead of the Feds, lowering interest rates.
There are thousands of people who have gone into numbness over losing their homes, being forced out from lack of payment even as I hear it being so friggen depressed that some have left not only all their furniture, dishes, clothing etc., but family pictures, baby toys, for crying out load birth certificates, fleeing in the dead of night with only the shirts on their backs and their wallets. Nothing contrived, nothing planned, just fleeing.. can you imagine their torment? You need to, because they didn't play the game you're thinking of doing. For in many cases, the banks bent over backwards going past the 90 day default notices and right of eviction to try to find someway, anyway to help keep these people in their homes. But, these people could cut a new refinance deal, because their income got a big hit..someone most likely lost his or her job. And/or their barely making it outgo in payments shot up after their "promotional ARM" ran out. They may have gambled that the normal pay raises would continue, but their employer stopped them due to the recession and its impact on sales. All kinds of REAL problems. In the gut problems, could happen to anyone type of problems, and may (I hope not) problems that someday could happen to you.
Please don't cause your house to go into foreclosure artificially. You can make the payments, stick it out like others around are doing.. don't add to the burden of bloated REO properties the banks are now saddled with. Stand straight on this one my friend, and in the long run, you'll come out better then gaining $$ on the short-term.
Last edited by shermjohn; 07-04-2009 at 08:58 PM..
Reason: mispellings
It is a simple business decision. If you were getting crushed on your current situation would you not try to better yourself and your family. I have a 7 month old daughter who I would like to raise in a nicer neighboorhood. This one has gone down a bit since the housing market went down. Now we have the people who CAN afford 700 a month for rent or the 125k houses here and they are not the kind of people I want to live next to for the next 10 years waiting for my house to get back to close to even. Talk morals all you want. Morals dont pay your bills or put your kid through college. Anyone that will sit here and tell me that they would continue to put $ into a losing cause is just blowing smoke up my ass.
Be careful - some homeowners may consider someone who bails on their property and goes back on their contractual obligations to be the sort of person they don't want to live next door to.
During the expanding housing market bubble, I heard variations of the same quote, "if I don't buy now, prices are only going to increase within the next year". And looking at the trends from 2002 to 2006, for example, you many understand their concern. I know of several people who took out "traditional loans", making adequate down payments, that after the "market correction", now have negative equity, and while they have the financial wherewithal to continue making payments, they feel justifiably hornswoggled by the banks.
Story after story abounds that financial institutions and their execs knew of the risks they were taking but held little concern because their livelihoods were never threatened. They took chances hoping to hit something akin to a 6-team parlay and get their massive payouts as a result, but if they went bust, it didn't matter. They'd still "earned" some bonuses and had golden parachutes awaiting them.
In the last decade, financial institutions have plundered from the tech sector and the housing market and now have their sights set on their next scam, the "cap-and-trade" environmental bill that recently passed.
To summarize, banks take risks, businesses take risks, and consumers take risks. But I place the blame for the housing bubble almost entirely on the shoulders of the banks who took advantage of their own arcane knowledge of finance to dupe customers into making rash purchases of value-inflated homes.
Sorry but I totally disagree. Nobody put a gun to your head and made you buy a house. You and your fiance made your choice and you now have to live with the consequences. No bank forced you to take out a mortgage. No bank forced you to pay $318k for a 1400 square foot house. Stop feeling sorry for yourself.
I won't even hazard a guess at that. I would imagine that a large portion of tipped workers, nationwide, under report their income. That doesn't make it legal, and it certainly doesn't mean that the IRS won't audit you. I personally know of a few folks that have been audited, although it usually happens when you go off of or on to tip compliance.
And those are the very people who scream bloody murder when their Social Security benefits are low because they did not pay the taxes on their total income as required by law.
Well, he probably doesn't understand why most people put the responsibility squarely on his shoulders, instead of where he wants it to be placed. I think he will grow old as a bitter person if he lets this mistake eat him up.
Report ALL your income for 4 years. (600k)
Pay taxes on it for 4 years.
Curtail all frivolous spending for 4 years.
Take all that $$$$ and pay off/down your mortgage!!!
Now don't you feel better when you are not underwater with your house?
BTW, this really IS good advice. Maybe those good habits will stay with you after the four years is up.
I don't get it... how does a bartender make 75k each?? Am I missing something?
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