How common is "buy-and-bail"?

NEW -> Contingent Buyer Assistance Program
SoCal78_IHB

SoCal78_IHB

New member
I just read this over on Lansner's blog... (posted by 'get real' under "OC house shoppers face smallest supply in 18 months")



"...Ask Steve Thomas how many of the 'sales' (that actually close) are 'buy and bailers.'



I personally know of many. Look around, who else would be buying in this environment unless it was someone desperate to ditch their higher/resetting payments? My neighbors (who cashed out their equity line just in time), just put it all down on another house. They told me they are going to 'rent out' one, but who are we kidding?? Over the weekend they had a garage sale to clear out some stuff and I heard them bragging about the buy and bail to some of our other neighbors.



Some of these neighbors went home with 'a look' (inspiration?) on their faces - I bet there will be alot more garage sales and moving out in my neighborhood before this is over. The irresponsibility of some people just sickens me. And no, we are not talking about the areas of OC that the bulls always slam. I live in a coastal town..."
 
[quote author="SoCal78" date=1223422301]I just read this over on Lansner's blog... (posted by 'get real' under "OC house shoppers face smallest supply in 18 months")



"...Ask Steve Thomas how many of the 'sales' (that actually close) are 'buy and bailers.'



I personally know of many. Look around, who else would be buying in this environment unless it was someone desperate to ditch their higher/resetting payments? My neighbors (who cashed out their equity line just in time), just put it all down on another house. They told me they are going to 'rent out' one, but who are we kidding?? Over the weekend they had a garage sale to clear out some stuff and I heard them bragging about the buy and bail to some of our other neighbors.



Some of these neighbors went home with 'a look' (inspiration?) on their faces - I bet there will be alot more garage sales and moving out in my neighborhood before this is over. The irresponsibility of some people just sickens me. And no, we are not talking about the areas of OC that the bulls always slam. I live in a coastal town..."</blockquote>


The lenders are wising up to this practice. The are now requiring people to have significant equity and prove they can make both payments. They are ignoring any rental income unless it has been rented for more than 1 year.
 
Someone posted in another thread about this becoming a requirement now.



When we were actually looking to buy a few months back, the lender didn't seem to factor in our rental income for our existing home towards our ratios. Unlike over a year ago where we easily qualified for the same loan amount and we were making about 15% less income.



From personal experience... the credit crunch is very real... just a bit late.
 
I think IR2's data shows that this wasn't happening too much in Irvine right? Most people had substantial downpayments. But I could see this being a big issue in major foreclosure cities like Ladera and Santa Ana









I found it interesting that i googled "buy and bail" and Irvinehousingblog.com was the 4th link down.
 
[quote author="24inIrvine" date=1223429423]I think IR2's data shows that this wasn't happening too much in Irvine right? Most people had substantial downpayments...</blockquote>


Couldn't the large downs be indicative of previously-extracted HELOC dollars? ... Could they still not be buying, then bailing?



I am surprised this could still be taking place at all in this day and age.
 
Not sure how relevant this is today, but back in April we had to provide a copy of the lease and the bank only counted 75% of the rent towards our income. They looked not only at what the mortgage on the rental was, but also the taxes and insurance.
 
You must log in or register to reply here.
Back
Top