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Before I'd suggest bankruptcy, I'd suggest just walking away, mailing the keys in. Lets face it, the banks also hold some liability on loaning out more then a property is worth and while you also hold liability, the banks were aware of your ability to walk away at any moment. Yeah, it'll hurt your credit score, but so will bankruptcy.
Who says the bank loaned more than what it was worth? Prices have dropped all over the country. If we start blaming the banks for not predicting the market and we expect them to share the burden when we lose money then, in all fairness, we need to split the profits with them in good times when we sell for more than we bought it for.
When I refinanced I believe I lost the abilty to just walk away and mail the keys in. Both of my loans are now recourse loans.
You never lose the ability to walk away. While banks do have the ability to sheriff sale your property, and come after you for the "loss", rarely if ever do they ever do that because it costs money to do that. If and only if do they come after you for the balance would I suggest bankruptcy. Its always a last resort.
The only time I would suggest you filing bankruptcy before walking away is if you really want the property. Lets not forget that a bankruptcy court has the ability to re-negotiate the loan terms if you file Chapter 13, but if you dont want the property, bankruptcy is the last resort. Faced with the choice of bankruptcy or walking away, you lose the property either way. One should take the choice that has less affect upon their credit report which is walking away. The bankruptcy hurts your credit score more and for a longer period of time (10 years, vs 7 years on walking away)
I didn't see anywhere that she said the bank loaned out more than the property was worth. At the time of the loans, it apparently was worth what they took out against it. It's only now, with the falling market and some poor decisions on the part of the owner that she is upside down. The bank didn't force her to sign a contract. The bank didn't force her to take an ARM that wasn't a good idea for her. But now you're advising her to just walk away and put the burden on the taxpayer, many of us who are not upside down in our property today because we weren't naive (or in some cases greedy) enough to take a decidedly risky loan in an obviously overinflated market.
Personal responsibility. Learn it, practice it.
And she also didnt force the bank to loan her money.. Responsibility goes two ways and anyone who is financial savy, knows you dont keep throwing good money after bad.
Furthermore I didnt tell her to walk away, which is what your stating I did, I told her that I'd walk away before filing bankruptcy. HUGE difference. Stop assuming that people stated something they didnt.
In addition, walking away puts NO burden on the taxpayers, it puts 100% of the burden upon the stock holders and investors in the investment company thats holding her note, the very same ones that loaned her the money. Taxpayers have absolutely nothing to do with it.
in all fairness, we need to split the profits with them in good times when we sell for more than we bought it for.
we do share profits with the bank, its called interest rates, points, application fees etc. Banks take the risk knowing that they make money over the spread of loaning money to 1,000 people. Because the spread the risk out, they do get a profit from those that make their payments. Unless you know where to get an interest free loan.
In addition, walking away puts NO burden on the taxpayers, it puts 100% of the burden upon the stock holders and investors in the investment company thats holding her note, the very same ones that loaned her the money. Taxpayers have absolutely nothing to do with it.
That's not true at all. There have already been talk of "taxpayer bailouts" as in the savings and loan bailouts of the late 80's. I'm the first one that will agree bankers are scumbags. But we (taxpayers, normal working people that DO chose to pay there bills) are left holding the bag.
Investment companies as a whole make up there profits one way or another - one way is to raise lending costs or interest rates - again to the people that do pay their bills on time.
As far as saying "you never lose the ability to walk away". Hey if you consider that, then you can consider the option of burning your house, the option of robbing a bank, the option of becoming a prostitue to pay off the mortagage...etc. Their is a fine ethical and moral line that we are dealing with.
There was a saying in the 80's "I got mine, so scr*w you"...it wasn't good then, but now it's even worse - "I didn't get mine, so scr*w you".
That's not true at all. There have already been talk of "taxpayer bailouts" as in the savings and loan bailouts of the late 80's. I'm the first one that will agree bankers are scumbags. But we (taxpayers, normal working people that DO chose to pay there bills) are left holding the bag.
Investment companies as a whole make up there profits one way or another - one way is to raise lending costs or interest rates - again to the people that do pay their bills on time.
As far as saying "you never lose the ability to walk away". Hey if you consider that, then you can consider the option of burning your house, the option of robbing a bank, the option of becoming a prostitue to pay off the mortagage...etc. Their is a fine ethical and moral line that we are dealing with.
There was a saying in the 80's "I got mine, so scr*w you"...it wasn't good then, but now it's even worse - "I didn't get mine, so scr*w you".
Oh please, stop making this a world wide crisis because the OP owes more money on a property then its worth. Yes the investment companies have to add the cost onto other borrowers but guess what, other borrowers have a choice not to do business with that investment company because their costs are to high, or the stability of that company isnt stable.
As for your "talks" of a bailout, they are just that, talks.. If they ever become reality, its because we voted for people who chose to bail out the banks. We are not talking about a huge national S & L bailout here, we're talking about one individual who asked our opinion. Do you even understand that the government blew up the S & L problem by agreeing to bailout bad investments?
Yes the OP made mistakes which included adding her credit card and car debt onto her home, but its over with, its in the past, move on and deal with todays problems. $100K is a lot of debt to be in the hole with no upside potential.
As for all the bs here about individual responsibility. She has an individual responsibilty first, to protect the financial stability of her own family, then others. If she's upside down on her mortgage such a huge vast of sum that she can not recover within several years, her responsibility is to minimize the damage to her family.
Oh please, stop making this a world wide crisis because the OP owes more money on a property then its worth.
As for your "talks" of a bailout, they are just that, talks.. If they ever become reality, its because we voted for people who chose to bail out the banks. We are not talking about a huge national S & L bailout here, we're talking about one individual who asked our opinion. Your entitled to yours, I'm entitled to mine.
As for all the bs here about individual responsibility. She has an individual responsibilty first, to protect the financial stability of her own family, then others. If she's upside down on her mortgage such a huge vast of sum that she can not recover within several years, her responsibility is to minimize the damage to her family.
You know you are so warped in your answers I don't know where to begin. You are answering this in a business forum? People here know better.
First of all, since you may have just crawled out of a cave, the foreclosure is reaching a national crises that may put the nation into a recession (as well as the amount of debt held by consumers). No matter who is to blame - greedy bankers, greedy or naive consumers. Oh HELL yes it is a crises.
Second of all, when the president comes on TV to a national audieance and says he wasnt to bail out the banks, Oh HELL yeah it's a serious proposal. One I don't agree with and will express with my vote. But I feel it is coming.
Third, I am all for the concept of individual freedoms, with the related concept of individual responsibility. I am also all for helping hands for those in need - someone unemployed, child in the hospital, etc. That doesn't include a free pass on debt so they can buy that plasma TV or SUV next year. Their is no indication that the original poster will destroy their life with this debt. Sure it will be tough for a few years. You "man-up" and pay off the debt within their means and within negotiable legal terms.
Edit note to OP: This shouldn't really be directed to you since we know nothing, really, about your situation at all. But to others that are in this common situation that may be condering the 'walk away' option.
You know you are so warped in your answers I don't know where to begin. You are answering this in a business forum? People here know better.
First of all, since you may have just crawled out of a cave, the foreclosure is reaching a national crises that may put the nation into a recession (as well as the amount of debt held by consumers). No matter who is to blame - greedy bankers, greedy or naive consumers. Oh HELL yes it is a crises.
Second of all, when the president comes on TV to a national audieance and says he wasnt to bail out the banks, Oh HELL yeah it's a serious proposal. One I don't agree with and will express with my vote. But I feel it is coming.
Third, I am all for the concept of individual freedoms, with the related concept of individual responsibility. I am also all for helping hands for those in need - someone unemployed, child in the hospital, etc. That doesn't include a free pass on debt so they can buy that plasma TV or SUV next year. Their is no indication that the original poster will destroy their life with this debt. Sure it will be tough for a few years. You "man-up" and pay off the debt within their means and within negotiable legal terms.
And tell me how ANY of this has to do with the OP?
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