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I am in a situation where my house is not worth what we paid for it , we want to relocate back home near our family.
This stands out to me. Do you HAVE to go now? or do you WANT to go now? Can you wait it out? Even just a couple of years from now you may find the situation is a lot better.
Suzie is right...preserve your cash...anyway you can ! During hard times , those with the cash win , in the end. History repetes itself , take the advice thats based on fact not fiction....As long as there are lenders , Bankers , and mortagage brokers ( fewer than there was ) , cash will be king , everyone want it...your included. Don't be fooled by all the hype , the ads , the ways to make money on your misfortune...its just common sense to stay as liquid as possiable always. When things get really bad , its only your ability to buy food and clothing from your savings thats important , no one else cares , or will lend you a hand...they are all too busy fending for themselves....and for some , tring to seperate you from your money as well.
Well said Darstar....
We are in a middle of a down cycle which we are soon to go up.
Looking back at history - every time we have a new president, we always go into a recession. The 2nd and 3rd year of the presidency, the country is booming....
We are in a middle of a down cycle which we are soon to go up.
Looking back at history - every time we have a new president, we always go into a recession. The 2nd and 3rd year of the presidency, the country is booming....
I so hope you are right !... Most of my thinking goes back to the thirties , and the words so embedded in my mind...from my ancestors. They lived thru it, and , saw the very rich amass a fortune....because they were liquid, when the average Joe had nothing. The disparage between rich and poor grew very wide....those are the times when , if you have it , you can clean up, on the backs of others. Sad , but true.
If I am in a (now) $200,000 house; that is $100,000 underwater -- at 5% appreciation per year (too optimistic?) it will take 8+ years to re-coup. Ug! It means I'd be making higher than rent payments that whole time (plus tax, insurance, etc) -- and then netting ZERO? I'm not sure that sounds like a good financial 'investment'.
If I had stocks, sure they may go up and down, but I don't have to keep putting money into it.
I don't know - it's definitely NOT an easy decision (because it involves where we live, and moving, and stress, and many other financial consequences, etc) - but when I 'do the math' - reality at least gets a little clearer.
Short sale/ walk away - don't matter. You are not walking away from anything. They will find you and you will pay- you either pay now or pay later, with interest. Personally, I would do everything I can to keep the house, but that is under principle and to retain credit rating. Now you have a financial incentive to keep the house even if you are underwater. Don't let anyone tell you it's easier to walk away, it's easier in the short term yeah, but bill collectors have long memories and in a couple years the harrasing calls will start, then the court orders, then the forced payroll deductions....
Read the link below - yeah that's right boys and girls who thought their financial problems were over when they walked - Deficiency Judgements:
What about the moral responsiblilty to make good on the debt? Each person that walks away from a mortgage, hurts all other homeowners in that area.
Between walking away and short sale, short sale would be the best option.
There are few moral dilemmas in business.
This isn't one of them.
Terminating your business contract and giving the "purchased" commodity back to its original "owner" isn't immoral. It's business. Essentially, when you do that, you've tossed any money you put in the place down the toilet and the bank may now regard that money as rent and re-sell the commodity.
Why is it that you feel badly for the bank? What did it lose? Far less than it has gained from many others.
Sometimes business contracts go accordingly and sometimes they don't.
Don't attempt to make citizens feel badly and tell them they're immoral for something that isn't a moral issue.
And the original article:
Mortgage lenders pursue homeowners even after foreclosure - Yahoo! Finance (http://finance.yahoo.com/news/Mortgage-lenders-pursue-cnnm-3107909798.html?x=0 - broken link)
I like this quote:
"Once they have a judgment, they can pursue you anywhere," said Richard Zaretsky, a board-certified real estate attorney in West Palm Beach, Fla. "They can ask for financial records, have your wages garnished and, if you fail to respond, a judge can put you in jail."
To the OP, people that are recommending you to walk away have probably done exactly that themselves. There time is coming, they don't even know it yet. No judgement, moral call here - it's strictly business. And bill collecters are ruthless in their chosen business.
Terminating your business contract and giving the "purchased" commodity back to its original "owner" isn't immoral. It's business. Essentially, when you do that, you've tossed any money you put in the place down the toilet and the bank may now regard that money as rent and re-sell the commodity.
Why is it that you feel badly for the bank? What did it lose? Far less than it has gained from many others.
Sometimes business contracts go accordingly and sometimes they don't.
Don't attempt to make citizens feel badly and tell them they're immoral for something that isn't a moral issue.
besides...home improvement costs are common with most owners. Just go to a Lowes's on the week-end and see....I would do a UCC before I gave up my home , in any case.Many people put more into their homes , using credit cards , in improvements...then , when it comes time to put a value on the house , no ones home !...Do not just lay down and let the intimidators roll over you.
Terminating your business contract and giving the "purchased" commodity back to its original "owner" isn't immoral. It's business. Essentially, when you do that, you've tossed any money you put in the place down the toilet and the bank may now regard that money as rent and re-sell the commodity.
Why is it that you feel badly for the bank? What did it lose? Far less than it has gained from many others.
Sometimes business contracts go accordingly and sometimes they don't.
Don't attempt to make citizens feel badly and tell them they're immoral for something that isn't a moral issue.
No one is feeling bad for "the Banks", AND in many cases "the Banks" are not the bad guys here. There is a lot of responsibility to be spread around here and while a Financial Institution may be the entity that holds your deed, nobody twisted your arm to make the purchase. So let's dump the populist rhetoric for a minute shall we?
There are some cases where Foreclosure is prudent, I will not dispute that. But Foreclosure isn't an option, it's what happens when all options fail.
Let's talk about another myth while we're at it. While Foreclosure may seem like a very personal choice and decision, it's effect is far more extensive than just the borders of your property line. Just ask those Homeowners in places like Phoenix, Orlando, San Diego, AND the OP's home town of Las Vegas. It only takes a couple Short's and Forclosures to begin to drag down everyone else. That includes your neighbors, friends, and relatives.
As the OP stated in his opening statement, his home is not putting him in a bad spot, so bravo for buying responsibly. But if we're ever going to get out of this we all (from the bottom to the top) need to behave responsibly as well.
I have read that on short sale if you were legally forgiven by bank part of your mortgage that you will be liable to IRS,this is considered a gift.
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Doing the math.....
