Posted on 02/23/2010 4:03:22 PM PST by rumrunner
So, after waiting for more than five years to finally buy a house that I thought was fairly priced in socal, and having paid out about $150,000 in rent over that time period, I'm about to close on a short sale.
The banks/investors (BofA, Citi) are going to "lose" about $400,000 on the house. The guy that's selling the house never lived in it. He never put a dime of his own money it. He will still have his own house in a different part of the county. He will keep that house. He is out nothing.
I did a little digging about short sales and came upon this gem this month:
Guy buys a house in Florida. $290k mortgage. Takes out a Heloc of $140,000. Uses it for his S corp business. He asks that his loan be modified. Citi says "sure". He settles the entire Heloc for $15,000 and the Heloc is now extinguished. Yes, 10% on the dollar. He still has his business and other assets.
This was his reply in that forum:
"WOOOOOHOOOOOOOOOOOOOOO!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!! I just got my letter!!!!! $15,000.00 or 10% whichever is greater!!! I just settled 140K for 15K!!!!
THANK YOU xxxx You guys are the best!!!! I'm sooo happy right now!!!!!!!!!!!!!!!!
I was never behind on my 1st or 2nd. My credit is still good, the only remark will show paid in full but less than agreed on my credit file."
Oh, i forgot where I was going with that.
If you find that the arears owed is simply... too much... Then leave. Wait to be kicked out. Save up your money for a nice apartment or something. Prepare. There is no reason to live under a bridge. If you’re a year behind, there is no hope of catching up.
The problem with my house is that it’s significantly de-valued (I expected this.. markets DO rise and fall). The bank would take a $140k hit if they tossed me out. i would go chapter 7, and everyone loses.
On a HELOC it can be. If the first mortgage is in default, the HELOC is worthless. They’ll settle it for anything. Though, I don’t know why the guy would be crowing about his great credit if the first loan was in default.
Use the term 'second mortgage' when referring to irresponsible people who couldn't live within their means or those who are forced into it by one time emergency situations.
Use the term 'HELOC' when referring to informed consumers who use their home's equity to work for them to consolidate debt, allow them to make home improvements, buy a new car, and enjoy that once-in-a-lifetime vacation they've been putting off.
/sarc
No surprise that you’re a looter.
I own two homes and the property they sit on, and I didn’t have to rob anyone to get them. I don’t care what others are doing. It’s a blessing not to owe anyone.
Nice guys finish last. It is a fact.
Wait until the tax bill comes, isn't that treated as income for tax purposes?
You're kidding us, right? I would never think of doing that, agreements are agreements........
Yea and talk to the people who took advantage of the bailout
The Feds monitor their bank account and if it gets too high or too low they yank their loan and take their property.
That is what this administration is after - they want ot confiscate private property.
Then their friends like Soros and Buffet, buy up loans that they know people can’t pay but give to them anyway usually a five year with a balloon, the people make payments for five years and then the balloon comes along and they can’t refi - so Soros and Buffet forclose and sell it to another sucker who does the same thing. They also get to take all kinds of expenses for having to forclose etc etc.
No, they changed the laws so that this is now forgiven. You don’t owe any tax on it.
A man’s word means diddly squat these days.
And the cycle of rape and pillage and economic destruction goes on.
Guys I may have just been duped by Citi Mortgage, I sent in the 15K as the letter states, now I'm getting calls from collections asking where is our 125K? Now that I'm readin this letter it states they are accepting a short payoff of 15K OR the net proceeds from settlement, whichever is greater. WHat the hell does "net proceeds from settlement" mean? Could I have been swindled here? The letter also goes on to say the money I send in is theirs to keep. If they try to say they never agreed on 15K I guess they can right?
The guy got the release from Citi already. It’s a done deal.
That forum has legions of people saying they have no intention of paying, but we’ll drag it out and live rent free for 12 months, 18 months.
With respect to taxes, even if they issue a 1099, big deal. He’ll only pay taxes on income which he did not earn. Most won’t have to pay taxes because your government passed a law saying purchase money mortgages (which includes 80/20) if settled short, do not give rise to taxable income.
“Could I have been swindled here?”
Could HE have been swindled here?
He got the release of the mortgage.
Only if you belive your short time on earth is all there is.
woohoo!! Its final!!! I got the release of mortgage in the mail today from the state!! Done and over with.
MNWIND. I don’t know what the BPO came in at, I wasn’t too underwater. I bought my home for I owed 440K, it went up to 700K - 720K att he peak, now its probably worth 1/2 of that. I owe 309K now, so I have some equity.
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