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My neighbor just bought a beautiful house with cash (~140K) and walked away from their not so good and high priced current house (~300K mortgage). I guess their credit will be ruined for seven years. But they no longer have a mortgage. Will you do that if you have cash and a huge upside down mortgage?
For some it's the only way out. They have too much money to get help but not enough money to continue in their not-so-valued home. The banks/government will give them NO help if they have savings. These are the very people who the gov't/banks should be helping as they can afford a mortgage if it were re-worked; instead they are helping people who cannot afford their homes stay in their homes a while longer until eventually they come up for foreclosure again.
Can't say as I blame anyone anymore..the rules are broken. Every man for himself and get what you can while the going is good.
Location: Halfway between Number 4 Privet Drive and Forks, WA
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I don't see why your neighbors didn't put the $140k into a refinance on their $300K mortgage. As I'm assuming the $300k house is an upgrade over the $140k house ???
If not, they've made their bed for the next seven years. Karma will take a bite of their ass along the way...
So the mortgage holder of the 300K house can't put a lien on the 140K-cash house? Or maybe they put it in someone else's name?
No because most mortgage deeds are written as non-recourse loans, meaning that the ONLY collateral the lender has is the one house itself. Nothing else.
My neighbor just bought a beautiful house with cash (~140K) and walked away from their not so good and high priced current house (~300K mortgage). I guess their credit will be ruined for seven years. But they no longer have a mortgage. Will you do that if you have cash and a huge upside down mortgage?
I would never get myself into such a stupid situation in the first place. So, no I wouldn't.
For some it's the only way out. They have too much money to get help but not enough money to continue in their not-so-valued home. The banks/government will give them NO help if they have savings. These are the very people who the gov't/banks should be helping as they can afford a mortgage if it were re-worked; instead they are helping people who cannot afford their homes stay in their homes a while longer until eventually they come up for foreclosure again.
Can't say as I blame anyone anymore..the rules are broken. Every man for himself and get what you can while the going is good.
I am troubled by this on so many levels.
The only way out? Out of what? Out of a home that was inconvenient to own and into a nicer home?
With $140K in cash, these people were not in financial distress. Why would a lender, let alone Government, bail them out?
This is disturbing. What ever happened to personal responsibility? I think the "buy and bail" is despicable - especially if they have $140K in cash handy. What about the neighbors in their former neighborhood - how might they suffer with having an abandoned house on their block. What they did seems very selfish to me and is indicative of what helped create this housing mess in the first place - people only looking out for themselves. I'm disgusted...
The only way out? Out of what? Out of a home that was inconvenient to own and into a nicer home?
With $140K in cash, these people were not in financial distress. Why would a lender, let alone Government, bail them out?
And unfortunately, this is legal, for now.
MAM..yes that is true. But, and I'm playing devil's advocate here, if the government is going to bail out people, why not let anyone apply to be bailed out or have their mortgage renegotiated ? If people have no equity then what do they have to lose ? They get another place and they know it's only a few years until that foreclosure comes off their record.
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Or maybe they put it in someone else's name?
