Stop paying morgage?

[Miner]

This came across my desk last week.

A property that was purchased on Jan. 20th 2006.
The seller sold the property on Jan 20 2006. the seller then went and took out a mortgage on Feb 17th 2006. We just listed the property to sell and found this out. We get a call from a holding company wanting to know why we are selling a property that they hold a note on, a bad note which they bought after the borrower made just the first few payments. what the seller did was use the tiny window between selling the property and having the title work settle. It takes 20-45 days in NY for title work to settle so after he sold the property.... on paper it looked liked he still owned the property free and clear because the loan was paid off through the sale. So he collected the full sale price at the closing and then closed a loan for the full value as well. Premeditate fraud. thanks a lot asshole now the title for the house is all f--ed up and the house can't be sold until it's straight!

The holding company told me they have STACKS of these cases in their system. I bet they do if they have not even been to the property to see we have been renting the apartments making mortgage and tax payments since 2006. They would have been another year or more before they even visited the property because they are so backed up. People make me sick sometimes. I hope the POS goes to jail.

SteveNY,

I'm thinking of a way to make money.:biggrin:
At the risk of sounding naive, isn't this what title insurance is for (outside the fraud issue)? Shenanigans like this makes me wonder about the Real Estate industry.

Miner

 

[vancouver]

So like every one else I am upside down on my house. I was talking to some guy I meet this weekend about it and he told me he stoped paying his morgage and equaty loan he had on his house. He told me he has been lke this for 1 year. I have noticed that alot of people are doing this. What happens when you do this? well besides that your cedit goes to hell do they have to pay this at one point or do they just have bad credit for a long time. Any one know about this or is doing this? need more info.
Thanks.

Don't do it. Keep paying your mortgage if at all possible!

 

[jond]

The op seems to have had to relocate due to job issues.

I just caught that. That changes things IMO.
1. Houses will never in our lifetimes get back to the highs. When interest rates go back up to normal houses could fall more I would think.
2. How many years does it take to save up $150,000?
3. The banks stole a lot of money from us, our children, and our grandchildren. I think I would default on it and take my $150,000 home.

 

[Hothonda]

Live for today and pray for tomorrow mentality.....sheesh!

 

[Danny]

1. Houses will never in our lifetimes get back to the highs. Wrong! Unless you're planning on dying in the next 10yrs or so. So how much did it cost to buy a house 30-40yrs ago? We are in a severe economic downturn but it will NOT last forever. Things will get better, people will make money in the markets and other asset classes, jobs will be created and things WILL improve. It doesn't happen over night but it will happen in my lifetime. We should sticky this thread and revisit in 10yrs [/B]


2. How many years does it take to save up $150,000? That depends on your income level and your current assets. If you have 1.5MM in securities and used Covered Calls, you can make 150k in 1 month[/B]

3. The banks stole a lot of money from us, our children, and our grandchildren. I think I would default on it and take my $150,000 home.The banks didn't steal it, they didn't force any of us to buy our homes. When prices were escalating out of control any of us could have said "I'm not paying and I'll just rent". We can sit here and point fingers but it wasn't just the banks. It's funny, when prices were escalating I didn't see everyone posting on here bitching about the fact they just made a bundle flipping their properties - and those people weren't "the banks". [/B][/B]

If you're going to encourage people to stop paying or shaft the bank then don't bitch about housing prices continuing to go down or the fact the economy is slow to recover....people with this attitude are just contributing to the problem and not surprisingly they'll be the ones that feel lasting effects.

 

[steveny]

SteveNY,

I'm thinking of a way to make money.:biggrin:
At the risk of sounding naive, isn't this what title insurance is for (outside the fraud issue)? Shenanigans like this makes me wonder about the Real Estate industry.

Miner

Title insurance covers the title at closing. I am not sure at this time if they cover what happens after the closing.

 

[steveny]

If you're going to encourage people to stop paying or shaft the bank then don't bitch about housing prices continuing to go down or the fact the economy is slow to recover....people with this attitude are just contributing to the problem and not surprisingly they'll be the ones that feel lasting effects.

Life is tough and you have to work hard, most people don't want to.

Can't sell your house? Rent it, it's work to do so and most people would rather avoid work at all costs then go cry piss and moan why they don't have anything. No one deserves anything for free you HAVE TO EARN IT!!!

 

[jond]

Wrong! Unless you're planning on dying in the next 10yrs or so. So how much did it cost to buy a house 30-40yrs ago?

I don't know, look at historical inflation adjusted home prices. Homes go up with inflation, and that is it. Once they fall back down to where they should be(they're not there yet), they will only go up 3% or so a year.
If the historical home price adjusted for inflation doesn't do it for you, look at the historical home price relative to salary. And then look at the historical average interest rates. I hate to say it, but 100 years from now, adjusted for inflation, homes will NOT be at 2006/2007 levels. It simply won't happen.

2. How many years does it take to save up $150,000? That depends on your income level and your current assets. If you have 1.5MM in securities and used Covered Calls, you can make 150k in 1 month

True. If the OP could simply pay off his house, or save up for for 3-4 weeks and pay it off then that's what he should do.
If it takes him 20 years to save up $150,000, then....

3. The banks didn't steal it, they didn't force any of us to buy our homes. When prices were escalating out of control any of us could have said "I'm not paying and I'll just rent". We can sit here and point fingers but it wasn't just the banks. It's funny, when prices were escalating I didn't see everyone posting on here bitching about the fact they just made a bundle flipping their properties - and those people weren't "the banks".

I hear you. I'm one of the few responsible ones. I bought a house that I could afford and paid it off. But I look at the value of the dollar as our country borrows and prints and gives the money to the banks. Every dollar you have in your 401k, checking, savings, etc is worth less now. Against the AUD it's worth about 30% less than last year. That, IMO, is stealing. Meanwhile all these banks are making record profits off that money. While I agree the blame needs to be passed around, I have 0 sympathy for the mega banks. They're the ones who lied about AAA ratings, who didn't require paperwork, who allowed 0% down loans. Who mailed out home equity loan offers weekly. And at the same time blame is at the feet of Greenspan for his low interest rates, and at the feet of Clinton for forcing banks to make loans to bad risks. And obviously blame is at the end users feet as well.

IMO, the true value of the average 2 story home in America should be under $100,000. If interest rates spike up like they did in the 80s, we could see it. And I think it still could bring on a second great depression.

 

[steveny]

I don't know, look at historical inflation adjusted home prices. Homes go up with inflation, and that is it. Once they fall back down to where they should be(they're not there yet), they will only go up 3% or so a year.
If the historical home price adjusted for inflation doesn't do it for you, look at the historical home price relative to salary. And then look at the historical average interest rates. I hate to say it, but 100 years from now, adjusted for inflation, homes will NOT be at 2006/2007 levels. It simply won't happen.

Hmmm. go back and look at my posts in 2006 and you will see the same basic statements. It is just mind boggling that people in 2006 thought housing would continue to rise and that people continued to drink the kool-aid. Everyone was happy to buy when they could sell and make money OR borrow against the house but as soon as the music stopped they want to stick the bank with the hot patato. Not acceptable IMO. That is why they call it RISK! If someone took a risk larger than they should have who's fault is that?

 

[docjohn]

Steve, I feel the same way.Short of a bad credit rating,there really should be a state/federal wage debit structure or dept reconfiguration schema in place to specificly handle credit obligations by borrowers who took a risk and understood the consequences of failure.But this whole universe of lending and borrowing has been distorted/reconfigured in the new era of the bailout/stimulus.

 

[BATMANs]

I spoke to a few NSX and other car owners that have car values near that of a down payment for a house.

2 comments I get:

1. I should have used that $$$ for a down payment on a house in the mid to late 90's

2. Good thing I got the car instead of the house in 2007~.


Anyone one of these 2?

 

[steveny]

I spoke to a few NSX and other car owners that have car values near that of a down payment for a house.

2 comments I get:

1. I should have used that $$$ for a down payment on a house in the mid to late 90's

2. Good thing I got the car instead of the house in 2007~.


Anyone one of these 2?

 

[White92]

There are 22 houses on my street. 9 of the houses have gone through short sales/banked owned status. 3 of the houses have gone through it twice.

They have all had their various reasons for doing this, from losing their jobs, to milking the system. Most of them are just milking the system. They have good jobs, but have refinanced their homes so many times, it's not even funny. They always bought new cars, boats, motorcycles, etc... with the cash. They used the homes as banks.

Another neighbor just walked away last week. He will get to keep all of his toys and I'm sure that by the time he's ready to buy another home, Obama will have a plan to help him again.

Of course I'm pissed about this. I've never refinanced my home and never lived beyond my means. These people have destroyed the value of my home for doing what they did. Plus, investors usually come in and buy the homes on the cheap and now they are all rentals or sitting empty.

 

[sahtt]

There are 22 houses on my street. 9 of the houses have gone through short sales/banked owned status. 3 of the houses have gone through it twice.

They have all had their various reasons for doing this, from losing their jobs, to milking the system. Most of them are just milking the system. They have good jobs, but have refinanced their homes so many times, it's not even funny. They always bought new cars, boats, motorcycles, etc... with the cash. They used the homes as banks.

Another neighbor just walked away last week. He will get to keep all of his toys and I'm sure that by the time he's ready to buy another home, Obama will have a plan to help him again.

Of course I'm pissed about this. I've never refinanced my home and never lived beyond my means. These people have destroyed the value of my home for doing what they did. Plus, investors usually come in and buy the homes on the cheap and now they are all rentals or sitting empty.

The incentive structure is a very fragile system. Its distortion has crushed more economies than any other cause. I know for a fact the greatest economists in the world would openly admit they have very little understanding of the long term effects of government action globally in response to this economic fall out. Yet the politicians with their shiny law degrees seemed to have the confidence those who have dedicated their lives to the subject at hand lack.

 

[steveny]

Plus, investors usually come in and buy the homes on the cheap and now they are all rentals or sitting empty.

:biggrin:

 

[pvmike]

I don't know, look at historical inflation adjusted home prices. Homes go up with inflation, and that is it. Once they fall back down to where they should be(they're not there yet), they will only go up 3% or so a year.
If the historical home price adjusted for inflation doesn't do it for you, look at the historical home price relative to salary. And then look at the historical average interest rates. I hate to say it, but 100 years from now, adjusted for inflation, homes will NOT be at 2006/2007 levels. It simply won't happen.

Why would you adjust for inflation? If the home's value increases to the original purchase price within the next decade due to inflation, wouldn't that be sufficient reason for the OP to hold on to the home and continue making fixed payments? Unless he can minimize his credit hit by going through a short sale, thereby allowing him to purchase another home within a few years, I'd rather save my credit and pay my mortgage rather than destroy it for a decade and pay rent. It doesn't matter if the increase in value is from inflation, as long as it brings him out of negative territory.

Also, I think your claim that home values will not ever reach 06/07 levels will only hold true for areas with shrinking populations. Regional markets differ greatly, and population growth is exponential.

 

[SilverStone05]

Disgraceful.

Just plain disgraceful. :frown:

 

[White92]

:biggrin:

The funny thing is that even if I sold my home right now for what they are short selling theirs for, I'd still make money. I wouldn't make as much as I'd want to, but I'd still come out ahead. It paid not to play the refinance game.

 

[jond]

Why would you adjust for inflation? If the home's value increases to the original purchase price within the next decade due to inflation, wouldn't that be sufficient reason for the OP to hold on to the home and continue making fixed payments? Unless he can minimize his credit hit by going through a short sale, thereby allowing him to purchase another home within a few years, I'd rather save my credit and pay my mortgage rather than destroy it for a decade and pay rent. It doesn't matter if the increase in value is from inflation, as long as it brings him out of negative territory.

I think you raise a good point realitive to the OP. I think it depends 100% on if you live in the house or not. If you live in the house, you HAVE to have some form of monthly rent or mortgage. If you default, you're going to have to either rent somewhere or take a higher interest loan. Either case you're not going to win I don't think. In the OPs case, since it's a secondary home, he could "extract" $150,000+6% interest(or whatever his loan is). While not necessarly moral, it's a lot of money.

My main point with inflation is that homes do not acutally go up in value, what is PERCEIVED as increased value is actually just the devaluation of your dollar. We have booms every so often. We had one that was 100x smaller in the 80s. I think it took 15 years for inflation to make the homes back to the same price.
As an example, in 1997 a new NSX was a hair under $100,000. An average 2 story house was about the same. In 2009, an Audi R8 is around $120,000. That's what I would guess an average home should be around. 3% compounded over 12 years would put $100,000 closer to $140,000, but you get the idea... I think the current average is $200,000 which is still too high.

 

[VampNSXX]

EXCEPT for all of the folks that jump on the default bandwagon ARE fxcking up the economy. And for the folks that jump on the bandwagon you can expect MORE taxes to continue to offset this problem. And although my response stated I think it's wrong I think I also answered your question of "what happens if you do this"....you keep the crappy economic cycle going.

Again I want to know what happens to the person not the economy or the world. If i ask what would happen if I stop puting gas in my NSX would you ansure ansure that The economy would get fucked up because I am not buying gas? No you would ansure or I hope you would ansure somthing like your car would stop runing cause there is no gas in it.


But for the rest of you who helping me ansure this question thanks at least you do understand what I am trying to ask and not run of on some other stuff.

 

[queenlives]

Disgraceful.

Just plain disgraceful. :frown:

i'm curious - specifically, to what are you referring?

 

[steveny]

My main point with inflation is that homes do not acutally go up in value, what is PERCEIVED as increased value is actually just the devaluation of your dollar.....

....and if you are stacking cash in the bank right now you are not going to be happy a few years from now. Much better to have a house which will double in value with inflation opposed to cash in the bank which will be worth 1/2 what it was, even if the doubling of the house still only gets you back to even.

 

[Danny]

Ok....sorry to go off topic but you did post a pretty controversal topic on a public forum. And to answer your question, your credit will be screwed for atleast 7 years. Most credit card companies will cancel your cards and I can't fathom living only on cash/debit cards - that alone would stop me from screwing my credit. (Years back I worked as a Collection Agent, so I am very versed on how this all works) Even if you do get credit in the next few years, the terms are alway going to suck. High interest rates, large down payments on any loans, low credit limits on credit cards. Also, many employers check credit reports, so it can even stretch into your career. Hopefully that was the "answer" you were looking for?

Again I want to know what happens to the person not the economy or the world. If i ask what would happen if I stop puting gas in my NSX would you ansure ansure that The economy would get fucked up because I am not buying gas? No you would ansure or I hope you would ansure somthing like your car would stop runing cause there is no gas in it.


But for the rest of you who helping me ansure this question thanks at least you do understand what I am trying to ask and not run of on some other stuff.

 

[Tony Montoya]

You can't have a mortgage without the mort. Who knows the best course of action. Five years ago we advised a newcomer to buy the house first and then the NSX. I admit that owning an NSX without a garage is a pain in the rear.

 

[Tony Montoya]

Don't do it. Keep paying your mortgage if at all possible!

I think I would walk if I had a non recourse loan. It''s just business. Banks should have asked for a bigger down payment.