Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Location: Halfway between Number 4 Privet Drive and Forks, WA
1,516 posts, read 4,579,729 times
Reputation: 677
Advertisements
Quote:
Originally Posted by chuck22b
Yea, in a sense it can be a question to buyers as well. When we bought, we already knew something was up with the market and we were willing to lose 20% or all of our down payment and wait it out. We negotiated heavily to get a 15% off list price so we figured, 35% is more than RE has Ever fallen. Case in point, RE has fallen over 40% in our area. It feels great being the sucker.
But, at some point... Really? it comes to a point where it ain't worth it. The lenders were "immoral" for conduting the kinds of lending they did. Why should responsible buyers that stay take ALL the hit? RE is most likely never going to go up to what it once was anytime soon. If the lenders have Any moral grounding, they would negotiate hard with buyers that put in a down payment and have been current. But of course that's not going to happen.
It's always easy to blame others; i.e., the government, the bankers, the real estate agents, etc. The fact of the matter is, you signed on the bottom line. You gave your word you were going to pay. No one put a gun to your head and forced you. You made a bad decision so it's someone else's fault and that makes it okay for you to walk away. It's how you justify it. I get that. It's a crock. But I understand it. Absent a reason that you CANNOT pay, you should pay.
Then can we reverse that? Can we have the corporations have more morals and integrity? How can those with integrity survive in a world where there isn't any? The lenders and banks need to have accountability as well.
Are you underwater? Are you 40+% down on your home? If you aren't... then you have no clue what people out here are feeling.
I currently own four properties. Yes, on one of them I bought it for 210,000 and it's worth about 60,000. I continue to lose money every month on it. The rent does not cover what my payments are. I continue to pay it every month b/c I took a gamble and lost on that one. Of the other three, two have equity in them. My primary residence remains to be seen. I'm on the market right now. The market will decide if I win or lose. I have options for that. I put enough down that if I rent it, I will be flat. If I decide I really want to sell it and take a loss, I'll buy something at hopefully a percentage below what I would've a year ago also and it will be a wash. I understand perfectly how people feel. I would love to be able to save that money every year on that loser condo, but it is what it is. I made the decision to buy it, not to sell when I should've and I gambled and lost. No one should pay for that but me.
It's always easy to blame others; i.e., the government, the bankers, the real estate agents, etc. The fact of the matter is, you signed on the bottom line. You gave your word you were going to pay. No one put a gun to your head and forced you. You made a bad decision so it's someone else's fault and that makes it okay for you to walk away. It's how you justify it. I get that. It's a crock. But I understand it. Absent a reason that you CANNOT pay, you should pay.
Yes, it Is a contract. And contracts Can be negotiated, voided, or re-worked. If I feel so obliged, I'm sure I can work a contract with the lender that says I pay 50% more on my property and they'll take it.
Likewise, the recourse for breaking the "contract" is that they take the home. That's how the law here works. So, those who walk are following the contract to the T. So, no, there is not moral hazard. If the banks didn't think homes were going to appreciate, then they wouldn't have given out the loans.
The only moral hazard is to your neighbors. And I really like my neighbors and this community. Sadly though... a lot of them are... dissappearing
Location: Halfway between Number 4 Privet Drive and Forks, WA
1,516 posts, read 4,579,729 times
Reputation: 677
You think it's too naive to believe your some of your value *might* return one day?
You've got to live somewhere, you know and rent isn't free. And it's not like you'd get to buy again right away...
I currently own four properties. Yes, on one of them I bought it for 210,000 and it's worth about 60,000. I continue to lose money every month on it. The rent does not cover what my payments are. I continue to pay it every month b/c I took a gamble and lost on that one. Of the other three, two have equity in them. My primary residence remains to be seen. I'm on the market right now. The market will decide if I win or lose. I have options for that. I put enough down that if I rent it, I will be flat. If I decide I really want to sell it and take a loss, I'll buy something at hopefully a percentage below what I would've a year ago also and it will be a wash. I understand perfectly how people feel. I would love to be able to save that money every year on that loser condo, but it is what it is. I made the decision to buy it, not to sell when I should've and I gambled and lost. No one should pay for that but me.
I actually wouldn't mind keeping my home... renting it out, and getting another home to lower my net payments. Using that method, (similar to what your doing... using the income from the other properties to make up for the loss in the lost one)... but, they changed the rules of the game. Rental properties aren't considered income anymore and you can't buy another property because your underwater.
So, basically, the rules change in favor of the lenders. I wish I can change rules.
But you can rent out your property and rent another property to lower your payments until the market comes back.
Let's say your payment on your mortgage, all in, is $1,000/mo. You can rent it for $600/mo. You get to write off the other $400/mo plus any expenses in fixing it (that you can't when it's your primary residence). So now you've got to find something to rent (maybe a one bedroom apt or a studio, depending if you have kids) that is cheaper than $600/mo.
I know the numbers are just out of a hat, but you know what I mean? Actually, the people who are renting my "retirement" home are doing that. Their house payment was 3,500/mo. They rented it for close to that (it's on the water). They're renting mine for $2,600/mo. So they're saving a lot of money till the market turns around and then they're going to sell it.
You think it's too naive to believe your some of your value *might* return one day?
You've got to live somewhere, you know and rent isn't free. And it's not like you'd get to buy again right away...
40% is alot. What price range did you buy in?
We bought late 2007, and negotiated a price that would of been comparable to end of 2007. But we all know home prices really collapsed early 2008 and on. We bought in a area cheaper than our incomes so we can afford it on one income. Like what people say we should do. Unfortunately, our pay have significantly cut since. Fun.
Sadly, most of my down payment is probably going to be lost indefinitely (probably all the way to the term of the loan). And I don't really care. The bad thing though about leveraging is, is that your actually losing more than just your down payment... if you continue to pay to term your actually paying the down compouned over the life of the loan so actually losing more than double your down payment.
So, more than likely we won't keep the place to term.
I believe the area has promise though... and I feel that in the long term it'll grow into a nice place. People are still moving in here, buying new homes, and moving into foreclosures. I would love to buy another place and rent our current place out until the market stabilizes and sell at a loss but gain from buying the second place at a lower cost. But, we can't do that.. because of the new rules supposively preventing buy and bail.
BTW, if some one is willing to buy and bail.... they will be willing to walk away anyways.... so what's the point of preventing buy and bail? When buy and bail results in a new sale? while preventing it, will result in a foreclosure anyways. Meanwhile it closes the door on legitimate people who just want to mitigate net outlays. Seems kind of defeats the purpose to me and actually will increase foreclosures.
Location: Halfway between Number 4 Privet Drive and Forks, WA
1,516 posts, read 4,579,729 times
Reputation: 677
Quote:
Originally Posted by MsFancyPants
It's always easy to blame others; i.e., the government, the bankers, the real estate agents, etc. The fact of the matter is, you signed on the bottom line. You gave your word you were going to pay. No one put a gun to your head and forced you. You made a bad decision so it's someone else's fault and that makes it okay for you to walk away. It's how you justify it. I get that. It's a crock. But I understand it. Absent a reason that you CANNOT pay, you should pay.
This is how I view it, too.
I find it ironic that everything in real estate has a herd mentality. Keeping up with the Joneses. Or following them to their demise...
Everyone bought a house, so everyone bought a house.
Everyone walks away, so everyone walks away.
I hope everyone don't jump off a cliff...
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.