[RedRockAAAA]

I have no plans of doing this, but reports of it happening has me totally confused.

How can people walk away from their current house (mortgage) and go down the street and buy a similar house for half the price?

I have seen this reported several times on TV. They never go into the details. Seems to me it would, or at least should, be impossible.

[BUGBULLY]

Our neighbor just did that. They handed the keys to the bank on Monday. He said that he just did not want to be under that much. He said all he has to do is show 6 months of rent paid on time. I know Daddy said they would not, but some how people are doing it. Seems shady to me.

[Daddys///M3]

It's not happening, at least not in that order. For one to acquire financing for the purchase of a home while they own a home that they are upside down on, they will need to qualify with both mortgage payments regardless if there is a lease agreement in place or not. To use rental income on the current, soon to be rental property you need 25% equity for an FHA loan and 30% equity for a conventional loan. VA has still not enacted guidelines regarding this. If you can qualify on both mortgage payments then you could buy a new home and walk away from the old one after the new purchase was complete.

As far as walking away first and then buying a home, I can guarantee that it is not happening on any type of significant scale. There are a couple of ways that it could happen. For instance if a married couple wants to purchase another home, and one partner is not on the current house (note, deed, or title) then it is possible using an FHA loan provided that the current property was purchased prior to the marriage. The foreclosure would have to be complete being that NV is a community property state and and the debts of a spouse must be used in calculating the debt to income ratio even if they are not to be on the loan. The other way of course is using a straw buyer. Unfortunately there is no way for a lender to proactively underwrite against a straw buyer purchase, and really the only thing that a lender can do about that is a post closing occupancy audit, in which case they can call the note due in full should they discover that there was occupancy fraud committed.


DISCLAIMER: Obviously not trying to tell folks how to commit fraud. I'm just explaining how difficult it is to pull things like this. As usual, I believe that the media is sensationalizing.

[olecapt]

Daddy has it right...it is pretty rare. What you need to pull it off is high income, large assets and good credit. Then it is possible.

Note however that such a description is exactly the thing that might cause the lender to actually go after a deficiency judgement.

It could however work in CA where you can't get a deficiency judgement.

[canadianexpert]

The companies are all now filing deficiency lawsuits I am letting a house go and they will sue me but like ole cap has said in previous post one can use their trump card of bk and now I'm at my 90 day mark since last card use. My slim hopes of avoiding a bk ride on a second short sale offer. I did a las vegas civil district court search and cross referenced defendants and they match pretty well most even look like the first as they are suing within 6 months of trustee sale. I know of only one person personally getting sued, they are preping for ch7, as most underwater people I know got a short sale or filed bk before a suit was in place. When i was researching deficiency judgements almost nothing came up for nevada a most would say they had not hear of any that was a year ago now we know its happening. Ole capt we now know they will sue. Walking is still the best financial decision for me for the long run and I see many followng in my footsteps.

[olecapt]

Originally Posted by canadianexpert

The companies are all now filing deficiency lawsuits I am letting a house go and they will sue me but like ole cap has said in previous post one can use their trump card of bk and now I'm at my 90 day mark since last card use. My slim hopes of avoiding a bk ride on a second short sale offer. I did a las vegas civil district court search and cross referenced defendants and they match pretty well most even look like the first as they are suing within 6 months of trustee sale. I know of only one person personally getting sued, they are preping for ch7, as most underwater people I know got a short sale or filed bk before a suit was in place. When i was researching deficiency judgements almost nothing came up for nevada a most would say they had not hear of any that was a year ago now we know its happening. Ole capt we now know they will sue. Walking is still the best financial decision for me for the long run and I see many followng in my footsteps.

Interesting. Cite some cases if you would. I just checked out Countrywide and Deutsche Bank and neither appears active in default judgements.

[canadianexpert]

olecapt here are a few cases:
08-a566428-c
08-a 566205-c
08-a562449-c
for searches use in district courts use plaintiffs only and here are who is suing
mortgage guaranty insurance corp, they are suing on firsts that have been foreclosed as they are lender insurer and most are unaware they are on loan and subrugated. Also old republic insurance which would be my case that with be eliminated. Others buying seconds I know of having suits pending is falso solutions. The first 3 cases are all on firsts I believe but have not seen the breifs and the last case seems the most cut and dry with a deficiency. I'm sure daddym3 could also give a list of mortgage insurers as I know I'm just touching the tip of the iceberg here. A look at who is litigating these for these insurers is also interesting. do a search with mortgage and plaintiff using corp and you'll see over 100 entries and also several diff entities then cross reference clark county recorder and you'll see the similarities with filing nd the 6 month timeline for recourse for the firsts as far a the seconds who knows since the statute of limitations is 6 years. countrywide wont come up as they are servicer for most loans as the investor for my first is bank of new york and the second investor is wells fargo. Unraveling the mystery is difficult.

[parkway01]

is this true if you can purchase another property with in the guide lines of equity once the new home is purchased you can short sale your townhome. I have been trying to sell for over two years know or rent no takers. With my medicial history i can no longer stay in fl, and the medicial has put us over the edge. My credit has been perfect for years it hurts to even think of this but they leave me know choice, the reason i purchased another home in another state is that it is cheaper to buy then to rent.

[007 license to sell]

Originally Posted by RedRockAAAA

I have no plans of doing this, but reports of it happening has me totally confused.

How can people walk away from their current house (mortgage) and go down the street and buy a similar house for half the price?

I have seen this reported several times on TV. They never go into the details. Seems to me it would, or at least should, be impossible.

As far as buying a home and then walking away, it is called buying and bailing. Lenders have gotten wise to the buy-and-bail strategy, Unless someone can show they have enough income to make payments on both homes, the bank isn't likely to make the loan on the new home.

In an article from the RJ 8/31/2009 regarding buying and bailing. The Greater Las Vegas Association of Realtors has a policy on buying and bailing,at that time the trade group's president, Sue Naumann, said transactions such as buying and bailing ("violate our association's strict code of ethics and are not tolerated.")

[SIZE=4]Negotiators for some banks who will be approving a short sale will be pulling a seller’s credit information to verify that the seller also stopped paying other creditors. [/SIZE]
[SIZE=4]If a bank determines that the seller has continued payments to everyone else they will likely request a promissary note or cash contribution before approving the short-sale . BofA is already doing this according to some of my fellow realtors.[/SIZE]
[SIZE=4][/SIZE]
[SIZE=4][/SIZE]

[eventusstultorummagister]

What ever happened to Brooke Boemio?

Unflattering Time magazine story puts agent in hot water - Wednesday, Aug. 26, 2009 | 2 a.m. - Las Vegas Sun

Apparently her license was never suspended or revoked.

Greater Las Vegas Association of REALTOR&#174

Amazing...