Hindsight

NEW -> Contingent Buyer Assistance Program
Do what's legally best to you and your family. It's a business decision, for goodness sake.





I don't think taking the high moral ground will help to provide a better future for you or your family. Sometimes you just have to take your lumps, but if I had a choice between being hit on the head with a tire iron, a 2x4 or a rubber mallet...they'd all hurt but I'd choose the rubber mallet. Sure, taking the tire iron and surviving may be macho, but I'm not into macho!
 
i lost the link, but there was a convincing blog arguing that the whole short sale biz was just a ploy by the banks to keep people who were ultimately going into foreclosure to pay out their last cent to the banks.





he argued that you were better off just stopping paying rent and waiting for the bank to eat you and kick you out, saving all the money you would have paid to use as an emergency fund/deposit for your next rental.





maybe someone else remembers where this advice originated from?
 
freedomCM



Not sure what your doing on a blog like this, trying to take the moral high ground with a false sense of entitlement and always looking to get the last word in.



Whatever, if you were my kid and I had a paddle your butt would be so sore you wouldn't be able to sit down for a year. You deserve a public flogging.



You signed a contract to buy something, the bank gave you money, now you don't want to go thru with your part of the bargain. Simple as that. Look you little turd. I bought in 91, my property dropped in value, I just sucked it up and made my payments, never occured to me that I was entitled to give my property back to the bank. Still doesn't. In 2000 I was sucked into the tech bubble and lost a wad of cash. Gee, the FEDs didn't bail me out. Took some more money and started a business which hasn't panned out yet, but again, I made the decision and I took the loss.



Pay the bank back in full, if it takes you 20 years so what, you signed the deal. If you can't just have the decency to go thru a proper BK. Trying to get out of your contract without a BK to me is just plain wrong and this is what's wrong with the state of Kalifornia and what's wrong with our Country.



Enough said....
 
Alan - you sound bitter because you took the moral high ground, maybe you should have shafted the bank and you wouldnt feel so bitter. I think recovering homeowner put it best, no need to pick the tire iron if you dont have to. Too bad they werent doing bailouts to help out responsible folks like you back in the day. Next time you should act irresponsible and youll get whats coming to you.
 
I hope IR's book has a chapter on the shenanigans of the purchasers and/or equity extractors (such as those posted on the blog) that are just walking away from their financial obligations. I want him to inflame public ire towards these people and the banking industry so that John Q. Responsible Taxpayer bucks the harness with which the politicians will attempt to saddle him in the coming year(s).
 
Alan,





Who put the big telephone pole up your rear end and made you the determiner of what was moral and right?





When did you stop abusing your children? And did that make you feel the need to insult and threaten people on the internet talking about real estate?





I've only been reading this blog for six months, so I'm sure you are much better informed about these things, so I'll expect that you will inform the rest of us (or at least ignorant me) how to lead our lives.





Thanks in advance for any more bile you regurgitate in my direction :-)
 
Hey like I said a dozen times already....if the fed gov't waives the forgiveness tax, you have nothing to lose. Guess what? They did eliminate the forgiveness tax, thereby paving the way for you to walk away. Don't lose sleep over it.



Alan, your response is just not realistic. If the Federal gov't is encouraging this type of behavior, then do it. You don't get away with a clean credit record. Defaulting on a loan is not the same as breaking a promise.
 
Oh I'm so sorry, I hurt someone's feelings, bad me.....



When I was in college in the 70's we still had an honor code and it wasn't OK to just flaunt the law. If your baseball broke the neighbors window you had to go over, apologize and pay to fix it. Now you gents think you should just walk away and deny and ignore and everything will be fine with the world.



I guess I grew up in a different era.



Now we can break contracts, break the law and come to an Internet discussion board and look for support and absolution. I say a pox on all short sales. If you want to break a contract, there is a perfectly legal way of doing it, it's call bankruptcy. Next you'll be saying I don't like being in my marriage anymore, I'll just skip divorce and short sell my wife too. Contracts are the backbone of our society, once contracts become unenforceable, our whole society goes down.
 
Oh, and for those of you who can afford your home but are just walking away thinking you can get away with it, see calculated risk... Fannie Mae has some news for you... It'll be at least 5 years before you can establish good enough credit to buy again.



http://calculatedrisk.blogspot.com/2008/04/fannie-mae-tightens-guidelines-again.html



"If you can actually afford to pay your mortgage payment, you made no attempt to work with your servicer or accept any kind of repayment plan, and your basic reason for walking away from the property was that you just didn't want to be upside down, you will be unable to meet the "documented extenuating circumstances" requirements. Plus, if you are "dragging out" the FC in order to live rent-free as long as possible, you are only extending the time period in which you are not eligible for a Fannie Mae loan again, since this is measured from "completion" of the FC process. In other words, this is aimed at "walk aways.""
 
<em>"If you want to break a contract, there is a perfectly legal way of doing it, it's call bankruptcy."





"It'll be at least 5 years before you can establish good enough credit to buy again."</em>





Short sales are little different than a bankruptcy as far as a credit hit is concerned.





Like many of the strange situations we have observed during the bubble, the crash in home prices has created a situation where it is financially prudent to commit what is arguably an immoral act. We have had lengthy discussions about the morality of this on other threads. The bottom line is that people are going to walk away from their properties, and the consequences of that action are going to be less than the consequences they would have faced if they had stayed put.
 
qwerty...



I think your on to something "recovering homeowner" a new term. Are you defining this as someone who was addicted to living in a home they couldn't possibly afford and are now going thru personal and financial withdrawls. Just like a drug addict. And look, they have magical thinking too, and exhibit anger and frustration. It's a true medical diagnosis. I'll have to write this up and send it to the New England Journal of Medicine. How long do you suppose this condition lasts, probably 1-2 years I would guess. Treatment -- large doses of reality.



Wonderfull...
 
Irvine Renter wrote: Short sales are little different than a bankruptcy as far as a credit hit is concerned.



No, they're not. The "seasoning" period for a subsequent mortgage loan is exactly the same for (1) foreclosure; (2) short sale; (3) deed-in-lieu; and (4) bankruptcy = 5 years (new Fannie guideline).



The hit to one's FICO score is also exactly the same = Score Factor Code #22: "serious delinquency, derogatory public record or collection."



The only way one can get out reasonably unscathed is to (1) pay all other obligations on time; and (2) dispute the derogs and hope they fall off (but not likely).



As alan said, "take it like a man," but, alan, the INABILITY to repay a loan isn't the same as the UNWILLINGNESS to repay a loan. That's why we have bankruptcy court and not debtor's prison in this country.
 
socalgal..



I agree with you, but some posters here are showing UNWILLINGNESS to repay their loan and are looking for some sort of acceptance instead of INABLITITY. I'm all for BK if the situation warrents but if people can afford to pay some or all their loan they should.
 
IrvineRenter, I believe I just learned from this thread the original lender can offer to refinance the original loan and this new loan now becomes a recourse loan.





I consider myself a reasonably intelligent person and am shocked to discover this. True, I've never bought a home before, but it makes me wonder how many people (who fell into the trap of buying a home they could not afford) would also fall into the trap of refinancing the original loan and forfeit the special status of the original loan.





As you consider future plans for the Irvine Housing Blog, might I suggest there could be interest in a "TGHB Survivor's Handbook".





Subprimer, my prayers are with you. As you can tell, there are a few different perspectives around here and some are not so friendly. Fortunately, others are.
 
<p>I got insomina again and discovered the true gold on CNBC is at 3:30 am when Jim Cramer guest hosted and they had NJ Governor Jon Corzine on as a guest.</p>

<p>Corzine gave Jim some heat for encouraging 'folks to walk away'. Cramer corrected him by explaining that he was just repeating what they tought him in school - namely, if you put $30K down on a $300K property, and it went to $270, you should walk away because it was a lead pipe cinch that the price was going to $260. Jim was rather smug in his answer, but he wasn't wrong.</p>

<p>At some price you have to decide where you can part with ethics. Moral hazard or not, I think I could stand the socal stigma of losing a home vs $125K in negative equity, which is exactly what you would be looking at if you were the folks on the corner who bought thier home last September down the street from my home in Orange. They paid $510 and FMV today is somewhere in the high 300's. Not bad for eight months of ownership.</p>
 
For those of you who is giving the "walk" advice..... have any of you gone though this process? how tough is it? how long before you will have to wait to buy another house? new laws are coming out everyday now making things harder and harder for people who walk.





maybe hanging in there might be a better option.... who knows what the government bail out will be in 12 months. i say if you can hang in there then you should. it is a home after all. if it reset in 24 months then continue to live as normal for 24 more months and wait and see.....
 
jbatzmaru, the seasoning period for foreclosure, deed-in-lieu and short sale--that is, how long you must wait to qualify for another institutional loan--is now five years (used to be four).
 
<em>" maybe hanging in there might be a better option.... who knows what the government bail out will be in 12 months."</em>





That is certainly what the government and lenders wants everyone to think. If everyone who is underwater now did what is in their best interest financially (walking away,) our financial system might collapse.
 
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