Posted on 12/27/2010 12:56:17 PM PST by Atlas Sneezed
I know there are moral issues, and I don't mind if some wish to debate the moral question of whether the bank took the risk of a downturn, or the buyer did. Or if my taxes are bailing out banks that are giving benefits to other borrowers.
The real question is a cold financial or legal one.
We are maybe $500k upside down, but love our house (custom built for us), don't want to risk losing it, and can easily afford the payments, and have never been late (and have stellar credit).
Is there a sensible strategy for getting some financial benefit in terms of renegotiating the amount?
One person told me just to count my blessings, and don't add stress to our lives over losing a house that we have no risk of losing. But I wonder if there is a solid scenario that can put a couple hundred thousand dollars in our pockets.
Incidentally, a hit on our credit would not have a real effect, because we don't need to borrow any money.
Fraud? And what were the Bank Bailouts? The AIG Bailout? His bank is probably too big to fail.
This is the LOL thread of the morning! Thanks for the ping!
Your entire post was hilarious!
A house loan is a simple contract, not a convoluted business deal. Set amounts, not ambiguous in the least.
Are you seriously blaming the banks for the rise in housing costs? Oh no, a big conspiracy - banks secretly led lives of land owners, widows, farmers, and then also as city officials who caused more growth inside of city limits so the land was more valuable...Are you sure you and the other cheaters are on the right forum?
Uh, you can't have bubble pricing (in a large asset class) without easy credit. Easy credit starts at the Federal Reserve Bank and filters on down.
No different than the tech stock bubble.
And no one makes anyone take out a loan they can’t afford or buy something that is overpriced - and this poster claims he can afford to repay it, just doesn’t want to.
Let me help enlighten you... If you look at the Canadian real-estate market, there was no boom or bust. The reason, the credit policy was never loosened and the banks all required 20% down for a purchase. If US banks had done the same, the housing bubble would never have been created as there would not be enough demand.
The reason for the housing bubble was the ease with which people could get loans. There were banks doing no money down on investment properties with no doc loans!!! The loose lending policy is absolutely at the heart of the real-estate bubble.
True. But run the scam long enough and people will think it's the new normal, and they did
- and this poster claims he can afford to repay it, just doesn’t want to.
I'm not endorsing, per se, that action but at the same time I'm not going to defend the banks, from the Fed on down, for one second. They create bubbles, then crash them, then pick up the pieces for pennies on the dollar. They should be sent to Gitmo.
You are half right; a mortgage is not a simple contract but you are correct that it is not ambiguous. There is a section called 'Remedy' in your mortgage, this covers non-payment. Do you understand that the terms of non-payment are essential and well defined in a mortgage contract?
Did they package your loan into a MBS?
If so they probably do not have a wet ink signature copy of the note. If not, they can’t legally foreclose. Of course you should check with an attorney before deciding on any course of action do not take the word of people on the internet.
Yes, but it's not a conspiracy, just simple cause and effect. Banks (and the government) loosen credit restrictions further and further, which increases demand, which increases prices, which creates an upward bubble of prices, until HGTV is wall-to-wall "how to flip a house" shows.
Eventually it crashes and someone is left holding the bag. I would prefer the bag-holder NOT be joe six pack, who innocently decided to buy a house in 2005. Upon checking the market: "all prices are high now, buy or forever be locked out! ...And his local Mortgage broker:"Yes you can get a jumbo mortgage on your meager salary!" ... Joe purchases his overinflated, soon to collapse in price house and has doomed a significant portion of his lifetime earnings to bank interest...
You would prefer to protect the banks from their own foolishness in lending Joe sixpack $900k on a $90k/year salary, by telling Joe that he has a moral obligation to pay back what he "promised" to pay.
Now Joe must face the moral indignation of many freepers...
To each his own I guess.
Given the fact you are able to afford what you have and the loss is perceived rather than real, do nothing. At least not for a while. In the great words of Douglas Adams and the Hitchhikers Guide to the Galaxy, “Don’t Panic”
You live in Nevada where there is a definite problem that will be resolved by time and a continued migration into the state.
My belief is that the coming inflation will work to your benefit and eliminate the perceived problem in whole or at least in part. Then there is America. By keeping the house you are betting on America as you did when you bought it.
Why surrender your home, your dreams, to someone else for some money? How much are you willing to lose for the continued dissatisfaction and grief from selling out rather than being patient ? Once the loss is realized and the house is sold, there can be no recovery of peace of mind or money. At present, there might be a deficit in peace of mind and an abundance of worry, but there is no actual loss of money.
Again, someone who decides to purchase a $900K home on a $90K salary is an idiot. He knows that home is over his price range. However, that is not the case we are discussing - Beelzubub openly flaunts his ability to pay for his custom made home, he just doesn’t want to. No one tricked him into building his macmansion -
You are soundling dangerously close to the class warfare progressives on DU. Blame those evil bankers for stupid decisions made by consumers -it is always the fault of someone else, no one has to have personal responsibility
Well, you can blame the con or you can blame the mark.
The mark doesn’t get a bailout. He’s just on the hook for one for the con.
Who takes the loss? Those that created the conditions, or the guy that merely and innocently wants a house in 2005?
I'm merely pointing out that Beelzebubb may be able to legally and ethically fulfill his contract by returning the house.
For that I and others incur the wrath of all Freepers who think contracts are inviolable covenants consecrated in heaven. It's a cross I'll have to bear.
The only moral answer may be that they both share in a portion of the loss. As Bubba did agree to the loan AND the bank (banksters), either through stupidity or malfeasance, loaned too much for to little collateral
There is a problem when ordinary homeowners start manipulating the law the way that major investors do. Like many systems in our society, it only works if the number of people who can abuse it is limited.
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