Upside down in Mortgage: Defaulting on a house I can afford? (Freeper vanity)

Freeper ^ | 12/27/10 | Freeper Vanity

[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.

[Moonman62]

Why should you take the loss if the cause of the loss is mainly due to the dirty dealings of Barney Frank and other friends of Fannie and Freddie? Provided that your actions are legal, I don’t think one can conclude without a doubt that your actions are immoral or unethical in such an environment. And why should you be penalized because you have more money than most? The best possible outcome financially and ethically would probably be a a tough renegotiation with the help of sound legal advice.

[Minn]

You could sell some of that $3,000 an ounce gold you’ve been hoarding and payoff the mortgage easily. What? It’s not $3,000 an ounce? But didn’t you say...

[delapaz]

Wow, there’s a lot of bank-lovers on conservative forums I see.

First thing off, I’d check whether you live in a state that allows banks to go after the balance after you mail them the keys. If they are allowed, and you have a big net worth, it’s probably not worth it, stay and pay it off ASAP.

If the bank can’t go after you for the balance, then there are two ways you can LEGALLY meet your legal obligations:

1. Pay them on time what you owe them as per the mortgage agreement.

2. Give them their house back.

Choose the option that makes the most financial sense to you for your family. This is a business decision, not a moral one, as long as you are following the law.

[davius]

Let's see...If you were to kidnap the bank manager's children, you could demand a couple hundred thousand in ransom. If they don't respond quickly enough, kill the youngest and send along an identifiable body part to prove you're series. This is a kindness in that they didn't have as much time to get attached to the younger one. Dispose of the body by burying it on top of a freshly interred coffin. No one looks for a body in a cemetery. Dig a tunnel from a sewer to the bottom of a public trash receptacle. Install a trap door in the bottom and direct the victim to place the money in the trash can. Crawl through the sewer, release the trap door and recover the money. Once you have the cash, take the remaining children and sell them as sex slaves to the Amish. Continue to make your payments and relish the monthly hilarity as you use the manager's extorted life to pay for your dream house. Conversely; if she's up for it, you could get your wife to turn tricks down in the rec room for $5.00 a pop. $10.00 if she's upside down. Let me know if you need any more help. I'm here for you, man.

[KC Burke]

Lots of people in your position in California and elsewhere. They pulled big equity money from the rapidly rising “market value” of their home for other uses and now don’t like the current market value in relationship to what they are currently paying.

You are only “upside-down” in relationship today’s market value — you are right on the money against the market value at the time you bought or borrowed against the home. It is only a market value at the time you bring it to market or establish said value as a security in a colateralized loan. You want to make payments on a cheaper house but you didn’t buy a cheaper house.

If we are misunderstanding the circumstances, you must remember that about half of the foreclosures that are causing all the problems are due to people taking money out of houses as described above and home flippers. They have cause more foreclosure problems than modest income home buyers getting into mortgages supposedly “over their heads.”

[WhyisaTexasgirlinPA]

So you built a nice home, can afford what you bought yet you want to rape someone now to steal a few bucks that you admittedly “don’t need”.....grow the hell up.

[delapaz]

I don’t know, did you take out a purchase loan for the tank of gas?

If so, you could give the gas station their gas back and refuse any further payments.

Apples and Oranges.

[jrolfedrev]

There are basically three options for relief:
1) Short-sale
2) Loan modification : www.naca.com
I have BofA former CW toxic loan. I went thru NACA and the are able to modify the loan for 2% fixed for the life of the loan. You have to own only one house to qualify for help. NACA is a HUD.You have to be patient ‘coz it can take between 4-6 mos. Go to loansafe.org for homeowner’s forum and gain insights how to fight back. PM me if you need more info.
3) Foreclosure

[Colvin]

I would consider this a business deal, much like the bank will. If a Bank finds it prudent to get out of a contract they will do so. Hence the need for a Bail out.
Do what is best for you in the long run.

[Minn]

A 15 year mortgage will always have a higher rate than a 30 year

Actually, just the opposite. 15 year mortgages have significantly lower rates.

Loan Type Today
15 yr fixed - 4.08
30 yr fixed - 4.79

Rates may contain points

[truth_seeker]

Recourse or non-recourse loan?

What type of institution owns the mortgage? Original lender?

[WhyisaTexasgirlinPA]

Nicely done.

[delapaz]

Oh it’s probably also worth it to check if they’ve screwed with your title and/or securitized it improperly anyway. If so, nail them to the wall. That kind of stuff has to stop.

[MsLady]

Good thing to know. We’ve been making an extra payment yearly plus adding extra every month. Hopefully we can be payed off in 20.

[WhyisaTexasgirlinPA]

Seriously? You think the bank is the evil bad guy? The bank loaned this guy the money to begin with, carries the note, and you want them to now take a hit on the amount they loaned him? Maybe your employer could work that same kind of deal with you.

[PGR88]

How screwed up a country we have become.

As soon as people’s houses become worth less than what they paid, we search for a way to put the burden on someone else - and indeed, the Gov’t encourages them to do so.

Please tell me who guaranteed the American public that their house prices would rise forever????

[Red_Devil 232]

If your house were a Home you would not care if it was upsidedown or not. If you can afford the payments, as you say, why are you concerned if you are upsidedown? Make your house into a Home and enjoy what you have.

[databoss]

You know I just re-read your post and have this to say:

Full of crap and all over the map!

[Jacktown]

I gotta ax, are you fa real ?

If your situation, meaning payment history and good credit were true, your bank should have called you about a re fi.

Our bank called us. Three years in the house. Got a new fixed rate and paying it off sooner.

Are you saying you want to walk away but want money to do it ?

LMAO !!!! Seriously, are you for real ?

[Vermont Lt]

We can discuss the moral implications later, but can I pay you to fornicate with your daughter?

Oh, that would be wrong?

Sorry.

More seriously, you might just want to call your bank and see if you can renegotiate your loan. Besides that, premeditated fraud is a bad thing.