In foreclosure soon

[mamiecarter]

Consult a lawyer then do what's best for you.

The banks, wall street, the lenders, the developers all do what is best for them. You need to do the same and protect your own interests.

 

[Icarus]

The banks, wall street, the lenders, the developers all do what is best for them. You need to do the same and protect your own interests.

Yeah, just like Enron did.

Do you know who the lenders are? The lenders are us, through our IRAs, 401ks, pension plans, savings and bonds, and soon as taxpayers.

I guess this is the new American dream. When your investments don't work out, look for a bailout and for other people to take the loss for the risks that you assumed.

Imagine what would happen if everybody with an upside down mortgage simply walked away from their homes and investment properties. I read an article that 1/5 of the nations mortgages are now upside down, and it's expected to go to 1/4.

Frankly, I don't see why the bank should renegotiate their loan with the OP. OP isn't going to be put out on the street like others who have real problems making their mortgage payments on their own homes after they got layed off or hit the adjustment period with their adjustable mortgages. OP simply took on some risk that OP shouldn't have and made a bad investment decision. And now OP is looking to bail out because OP isn't willing to wait it out until the property goes back up in value. From what OP said, the property had negative cash flow from day 1, so OP must have known that it would have negative cash flow from day 1. So why did OP buy it in the first place if OP couldn't afford the risk? And why should OP be able to just walk away?

OP might be able to get away with it, but IMHO, that doesn't make it morally or ethically correct. Frankly I don't know if the OP can get away with it or not. I'm sure a promissory note was signed with the mortgage, and the rules for investment properties are certainly different than they are for homeowners.

-David

 

[PigsDad]

The investment we made IMHO was not speculative with 20% down and originally positive cash flow.

How can you say that with a straight face?!? Any investment is speculative in nature. Are you saying you thought you could not lose money when investing in real estate? If so, you shouldn't have been investing in real estate in the first place!

 

[vacationhopeful]

So how many low cycles in real estate did the OP forget about in their adult lives?

My memory has 1975, 1980, 1984, 1990, etc.

 

[Egret1986]

The OP states "100% invested in stocks & real estate for many years.."

So how many low cycles in real estate did the OP forget about in their adult lives?

My memory has 1975, 1980, 1984, 1990, etc.

The OP simply appears to have a strong sense of entitlement. I just looked through a couple of the OPs most recent posts to see if any struggles were mentioned. Nope...."just bought 30 restaurant.com certificates....will buy again"....."any excuse for a celebration..."....spending weeks in Hawaii.:whoopie:

And guess what, the OP is teaching the next couple of generations that "hey, it's okay to act this way; we're entitled."

Reminds me of the Mom and Dad with the mini van at the local farmer's strawberry patch with their children last year. The farmer was charging a reasonable price. You could fill one of their large buckets with picked strawberries for $8.00. This Mom and Dad had no shame. They would fill up a bucket and take it over to their mini van that had a big cooler, dump the berries and go back for more, paying for only one bucket's worth.

That old sense of entitlement. Let someone else lose money. Let someone else pay my share. What if everyone did that? Why do prices go up like they do? Because some folks think it's okay to take from others and continue on their merry way. They don't even give it a second thought.

The OP didn't start this thread for any other reason than looking for others to support their actions. It wasn't a case of the OP trying to make a decison to do it or not; just looking for some advice in support of their actions.

 

[CatLovers]

Consult a legal professional ...

Consult a legal professional and do what you need to in order to legally protect your interests. You can pretty much guarantee that all the other parties in this transaction - the banks, the lenders, the lawyers, the developers, whoever else, will do anything they need to protect their interests (and morality or ethicality will have nothing to do with it, only legality).

There are a lot of people here who don't agree with you, but quite honestly, they don't have to live with the consequences of whatever option you choose. I have observed that people are sometimes very quick to judge others on a bulletin board and to say things that they would never dream of saying to someone face-to-face, or to someone who (and whose circumstances) they know well. I have observed that it's also easier to pass judgment on others when it the ultimate outcome doesn't affect you personally. At the end of the day, do you really care what a few people you have never met (and probably never will) think about actions that you need to take to make the best decision for yourself? Besides, do you really need validation from people you don't have a relationship with? Consult expert advice, and then make the best decision for yourself within the limits of the law, and you'll be fine!

Good luck, I hope you come through this with as little heartache as possible.

 

[Icarus]

That's just as ridiculous as the OPs position.

It's not the home they are living in. It's an investment they made. The investment had risks. No investment is guaranteed to make money. And OP said they weren't at risk of bankruptcy, just that it would have some affect on their lifestyle.

-David

 

[Fern Modena]

I wonder if the OP realizes (or even cares) that his insurance company probably runs his credit and takes that into account when they set his premium. Something about people with lower credit scores filing more claims...

Fern

 

[JEFF H]

I’m with the personal responsibility crowd but have to admit like it or not that Lawlar is giving practical advice for the world we live in.
The Fact is the banking cartel and our government do not act morally, ethically or responsibly. They Control the game and set the rules to play by.
I may just be old-fashioned but I don’t believe that makes it right for us as individuals to do the same.
I have lived my life being responsible and always trying to do the right thing.
I have lost out at times by not taking advantage of the situation to better my own position.
I have often questioned my actions for not being the smart thing to do.
Its hard to do the right thing when you see so many around you doing whatever is best for themselves throwing morals and ethics out the window.
In the end all I have is my belief that I need to act responsibly and do the right thing no matter what others do around me. That’s what gives me personal peace of Mind.
I won’t pass judgment on the choices the OP and others make in these situations as only they and God can do that.

 

[vacationhopeful]

There are a lot of people here who don't agree with you, but quite honestly, they don't have to live with the consequences of whatever option you choose. I have observed that people are sometimes very quick to judge others on a bulletin board and to say things that they would never dream of saying to someone face-to-face, or to someone who (and whose circumstances) they know well. I have observed that it's also easier to pass judgment on others when it the ultimate outcome doesn't affect you personally

It does affect me .... and everyone else. And yes, I would say it to your face. Pay your bills or sell NOW for a lost. It was an investment (RISK) that you took - not me, other businesses or the US government. Less grief ??? - foreclosure notices are published in the local newspapers here (just like obituries) and people read them.

And anyone who has worked for me over the 20+ years I have been in business knows that even in BAD/POOR/ROTTEN/HORRIBLE years of cashflow, I have always PAID my bills. And those contractors, other business owners, and selfemployed have always been there to help me out because I do the right thing. I go on vacation because I pay for it after my bills are paid.

I have little heartache in my life - because I don't have to look over my shoulder or am waiting for the ax to fall.

JMHO,

 

[dioxide45]

I wonder if the OP realizes (or even cares) that his insurance company probably runs his credit and takes that into account when they set his premium. Something about people with lower credit scores filing more claims...

Fern

I beleive they use this model because people with a low FICO score tend to be more likely to file a claim for a small loss while those with a high FICO score are more likely just to pay for a small loss out of pocket.

 

[theo]

Is this really the best source of input?

We are retirees of 10 years and bought several rental investment properties in Arizona. One we put down 20% is now worth about 50% of the original price we paid and $75000 less then the loan amount. The bank will not take a deed in lieu of foreclosure so we are thinking of letting them foreclose. Our credit will go way down for several years but we do not know how low. We have always been in the high 700's and are wondering if this would change our present credit card limits we have had for years.
We are not needing to ever get any more loans so for us it is better than using up our retirement funds to pay for the foreclosure. ANy other tuggers in the foreclosure situation??Pros and cons???

With all due respect, I'd recommend a consultation with an attorney.
It sounds like a serious enough (and complex enough) situation that personally, I'd want my advice to come from a source other than anonymous screen names on a timeshare bbs. But that's just me...

 

[Tia]

Friend of mine yesterday was telling about another married friend of hers back in Illinois who just got eviction notice as the landlord has not been paying the mortgage even though the renters, new parents, have been paying rent. They are suppose to be out in one month! Trouble. Anyone doubt they will get their deposit back?

 

[Kevin]

There is hope

Friend of mine yesterday was telling about another married friend of hers back in Illinois who just got eviction notice as the landlord has not been paying the mortgage even though the renters, new parents, have been paying rent. They are suppose to be out in one month! Trouble. Anyone doubt they will get their deposit back?

Hi Tia,

I am a real estate broker who happens work with a lot of foreclosure assets and renters. Tell your friend to ask for the deposit amount from the mortgage holder. They will more than likely receive it in the form of a "cash for keys" agreement. This is a case where the renter sometimes gets the shaft.

Send me a PM if the need direction.

Kevin

 

[PigsDad]

I’m with the personal responsibility crowd but have to admit like it or not that Lawlar is giving practical advice for the world we live in.
The Fact is the banking cartel and our government do not act morally, ethically or responsibly. They Control the game and set the rules to play by.
I may just be old-fashioned but I don’t believe that makes it right for us as individuals to do the same.
I have lived my life being responsible and always trying to do the right thing.
I have lost out at times by not taking advantage of the situation to better my own position.
I have often questioned my actions for not being the smart thing to do.
Its hard to do the right thing when you see so many around you doing whatever is best for themselves throwing morals and ethics out the window.
In the end all I have is my belief that I need to act responsibly and do the right thing no matter what others do around me. That’s what gives me personal peace of Mind.
I won’t pass judgment on the choices the OP and others make in these situations as only they and God can do that.

In the OP's case, how exactly do you think the "banking cartel" did not act "morally, ethically or responsibly"??? They made the loan in good faith, and now the OP wants to stick the bank with their poor choice of investments, and go on vacationing in Hawaii on yours and my bailout money.

The only one I see not acting "morally, ethically or responsibly" is the OP in this case. And yes, I would say it to their face.

Kurt

 

[Ken555]

This entire thread is indicative of the society we live in, and its influence on our lives. Not only does the next generation have to worry about being ethically and morally bankrupt, but the older generations among us are leading the way down this path. Your actions speak louder than your words.

While I am disheartened by the current financial mess and the apparent reasons for it, personal stories like the OPs simply exacerbate our feelings on the topic. Legality aside, it is obviously wrong to escape responsibility for an investment property which the OP can afford to be rid of in a "normal" process (ie. take a loss and move on, or keep it and wait for values to increase).

It's sad that many people are suffering due to the economy (we're all affected in some way). Bankruptcy options and legal options exist for many situations to reduce your responsibility and burden others from your poor decisions. I agree with others that if you were having problems meeting your obligations for your primary home this would be a different situation - but an investment property? Ridiculous.

Live up to your word. Pay your bills. Act responsible. Be an example of what you wish others would do in similar situations.

PS. Go Vote!

 

[Jaybee]

Fern, I definitely agree with you, Steve, David, and all the other "capitalists" who believe in personal responsibility. What ever happened to that, anyway? We now have a generation who worships instant gratification, and thinks it's some kind of "right".
It's gratifying to see so many of us here are still clinging to the values that made this country what it is supposed to be. We all have the right to succeed, but on the other hand, we also have the right to fail. Life generally comes down to a matter of the choices we make, and we should be responsible for making them, win or lose.
Off my soapbox. My nurse says it's time to go back to my room. (LOL) Jean

I wonder if the OP realizes (or even cares) that his insurance company probably runs his credit and takes that into account when they set his premium. Something about people with lower credit scores filing more claims...

Fern

 

[IngridN]

Fern, I definitely agree with you, Steve, David, and all the other "capitalists" who believe in personal responsibility. What ever happened to that, anyway? We now have a generation who worships instant gratification, and thinks it's some kind of "right".
It's gratifying to see so many of us here are still clinging to the values that made this country what it is supposed to be. We all have the right to succeed, but on the other hand, we also have the right to fail. Life generally comes down to a matter of the choices we make, and we should be responsible for making them, win or lose.
Off my soapbox. My nurse says it's time to go back to my room. (LOL) Jean

Well said

Ingrid

 

[Tia]

Thanks for the info Kevin, will pass it along.

Hi Tia,

I am a real estate broker who happens work with a lot of foreclosure assets and renters. Tell your friend to ask for the deposit amount from the mortgage holder. They will more than likely receive it in the form of a "cash for keys" agreement. This is a case where the renter sometimes gets the shaft.

Send me a PM if the need direction.

Kevin

 

[mterra]

I have been reading through this thread from the beginning. I have a house in TX that I have been trying to sell for 4 1/2 years now. It is a beautiful house. Had 2 different renters in it. Both times they were going to buy, obviously they didn't. It has been sitting empty more than occupied. It is incredibly discouraging. I am almost down to the price I paid for it 10 years ago. I have been in Alaska for 4 years now and have relied on 3 different realtors who seem to do nothing, in my opinion. Especially when they do not return phone calls or emails, sorry off the subject. Anyway, I could not imagine foreclosing. I never say never. I continue to hope for some kind of miracle. I have worked so hard and have always had good credit. I don't think I can give in. It is not easy, that is for sure. I am a single mom with 4 kids and have a house up here too. Not sure how I do it month to month but since I am still managing I cannot give up. I realize everyone needs to do what they feel is best for their situation, but think long and hard about the consequences of your actions. Do you really want to make a drastic change in what you have worked your whole life for?

Just my thoughts and my own experience.

Mary

 

[grupp]

OK - Now I'm really unpopular with the conservatives on TUG (hopefully not too unpopular). But I believe any attorney would give this same advice and you are going to see a lot of people in AZ, CA, NV & FL doing just what I am suggesting. But hey, the CEOs of our now failed financial institutions are enjoying their golden parachutes while Uncle Sam pays the bills.
.

Sorry, but there is no Uncle Sam. The bills are being paid by the TAX PAYERS and we all have to pick up the check for all those who don't pay their debts.

In my mind there is a difference if someone falls on hard times (losses their job or unexpected medical problems) and can't make their house payments and someone who decides to stop making payments because the value of their property declined. I think we do need to do something to help the first group, but absolutely nothing should be done for the second group.

Gary

 

[Brett]

This morning's Wall St. Journal had a personal finance article on what to expect if you have real estate in foreclosure.
http://online.wsj.com/article/SB122583941535198573.html

Here is one short excerpt -


"In most cases, walking away from a mortgage can knock a top credit score down to the cellar, says Ethan Dornhelm, a senior scientist at Fair Isaac Corp., which sells credit-scoring formulas to credit bureaus.
A person with a stellar credit score from the high 700s to the top score of 850 would see it drop more than 200 points. A person whose credit score is lower may see it fall by fewer points, but still end up with a score in the mid 500s. At that level, reasonably priced new debt, from credit cards to car loans, will be out of reach. In addition, a default could lead landlords and utilities to require more cash up front and even affect your job prospects.
If the borrower continues to pay other debts on time, the score will climb gradually, though it may take three to five years to return to "good" scores, from the mid-600s and up. Scores of 790 or more -- which are rewarded with the lowest interest rates -- won't be attainable for at least seven years, when the default blemish finally disappears, Mr. Dornhelm says.
What's more, lenders in most states can go after homeowners for an unpaid balance on a mortgage. That's a real risk, especially if you have other assets."

 

[Fitzriley]

Save my 401k

And as I'm sure you know, they are working on a plan to renegotiate $500B worth of mortgages, with the government taking half the risk and the lenders taking half the risk. The expected cost to taxpayers is $50B and that's included in the $700B bailout cost.

I have a lot of sympathy for people that are in danger of loosing their homes because of the current situation. Mortgage lenders should not be permitted to underwrite mortgages just at the initial teaser rates. That's exactly how we got here. Everybody involved played that game, and it worked for a while.

I have very little sympathy for investors that knowingly took a risk by buying investment property with OPM simply based on the "fact" that real estate always goes up in value. That's basically just greed to expect to be able to walk away when the investment goes bad, but stick around when the investment works.

Are you really saying that both of those cases are the same?

Can I go back to when my 401k account peaked in value and say that I didn't want it to lose the value it has lost and have somebody pay me back what I've lost?

-David

I love this! Where do I sign up for the save my 401k deal? Maybe the investors who walk away form their mortgages could take some of the extra money they are NOT spending on their debt and shore up my investments???

 

[gorevs9]

Where's the line to get my share of the wealth

[Political comments deleted.-DeniseM Moderator.]

 

[jlr10]

This is off topic, but only slightly.

I worked where someone took a chance with a lot of money. Many many peoples security was put in jeopardy on the chance that the economny would pick up. It didn't and the house of cards came tumbling down and some people may be finacially ruined, as they are left holding the bag for someone else's choices. I am the lucky one, I got laid off with no final check, no insurance, no severance, and a resume that includes a tainted business. But at least I don't have to stick around to clean up the mess and try to explain what happened. But my life will forever be effected by someone else's choice to take a risk, and then lose.

Yes, the bank may take the loss here if the OP walks away. But remember that bank is full of hardworking employees who are going to take the immediate hit for people who chose to walk away from their obligations. So before anyone walks away they should look at the young people around them who are barely getting by financially. How will they feel when the others join the ranks of the unemployed just because someone else could walk away from their debt and let the burden fall on someone else. Yes, some people have to walk away because they can no longer afford to maitain their homes, but to walk away because it might change their lifestyle?...

Maybe I am a little to close to this one, but I am appalled at the lack of social conscience that people are displaying.

Now you will have to excuse me I have to go find a job.