rocknrobn26 Posted July 17, 2008 Share Posted July 17, 2008 For the second time! Last time 20 years ago. What are the ramifications? Do you have to file papers? Declare bankruptcy? Can the bank come after you? Doesn't he still owe a differential payment? Very long story on their financial situation. I just can't believe you 'walk away' and is forgiven. I truly don't understand how this works. Splain to me like I'm a 3rd grader! Quote Link to comment Share on other sites More sharing options...
Chavez Posted July 17, 2008 Share Posted July 17, 2008 Do you have to file papers? No. Declare bankruptcy? No - fun fact here - defaulting on a mortgage is WORSE for your credit than bankruptcy. Bankruptcy means that the creditors got SOME money. Can the bank come after you?Doesn't he still owe a differential payment? I might be wrong on this, but the bank will sell the house and then the (former) owner is responsible for the difference between what was owed and what the bank received. Quote Link to comment Share on other sites More sharing options...
Skippy Posted July 17, 2008 Share Posted July 17, 2008 I might be wrong on this, but the bank will sell the house and then the (former) owner is responsible for the difference between what was owed and what the bank received. i think this is correct. I had a friend some 20 years or so ago that walked away from a mortgage. The house he walked from was a very nice house that the bank sold way cheaper than they should have. In the end my friend owed the bank close to 40K. He never paid it off and to this day I do don't know of him to work a job that issues a paycheck since. He life has been a nightmare but it seems like it is his choice. Quote Link to comment Share on other sites More sharing options...
rocknrobn26 Posted July 17, 2008 Author Share Posted July 17, 2008 No. No - fun fact here - defaulting on a mortgage is WORSE for your credit than bankruptcy. Bankruptcy means that the creditors got SOME money.  I might be wrong on this, but the bank will sell the house and then the (former) owner is responsible for the difference between what was owed and what the bank received. That's what I thought! It makes sense, but on their first one (they were justified) they paid nothing! And maybe I'm not getting the whole story! Their house was appraised @ $500K, they took out a loan to rehab another house. Lost $$$$$ there. Now they are walkin' and moving in to their daughter's house! I don't understand! Quote Link to comment Share on other sites More sharing options...
Chavez Posted July 17, 2008 Share Posted July 17, 2008 I don't understand! Â People's love lives and financial situations are generally full of inexplicable, idiotic f*cking mistakes. Quote Link to comment Share on other sites More sharing options...
yo mama Posted July 17, 2008 Share Posted July 17, 2008 Depends on whether you are personally liable for the mortgage debt. If not, you just pack up and leave. Bank repos the house, which is almost always collateral for the mortgage. Quote Link to comment Share on other sites More sharing options...
muck Posted July 17, 2008 Share Posted July 17, 2008 Sometimes it's cheaper for everyong involved to simply hand the keys to the banker, leave the house in good shape and wish them well with their collateral. Â They sell the hosue for what they can. If it's more than is owed, the former owner gets some $$s. If its less than what is owed, the bank decides whether it's worth their time and effort to try to collect on the difference. If they don't try to collect, they will just write it off. I am not sure how it would (or if it would) show up on the former owners credit report ... presumably it would have to somehow. Â In some ways, it may be better for your credit to make the last payment you know you'll be able to make, give the keys to the bank and wish them well ... than it would be to stop making payments, stay in the house like a squatter and make the bank kick you out 6-12 months later after a judge has granted the foreclosure. Quote Link to comment Share on other sites More sharing options...
Chavez Posted July 17, 2008 Share Posted July 17, 2008 My mortgage guy says banks have a new term - "jingle mail"; instead of sending checks in with mortgage payments, the homeowners are just saying f it and sending the keys. Quote Link to comment Share on other sites More sharing options...
Clubfoothead Posted July 17, 2008 Share Posted July 17, 2008 If you are broke and can't sell the house for what you owe there's probably nothing else you can do. Quote Link to comment Share on other sites More sharing options...
SteelBunz Posted July 17, 2008 Share Posted July 17, 2008 I've noticed around here that the banks usually try to work with a realtor to sell "walkaway" homes for about 6-8 weeks. If they don't sell in that time, they generally go to the Sheriff's auctions where an opening bid has to be at least 2/3rds of the 'appraised value'. I've been checking the sheriff's sales for about 2 years now.....in case any homes come up that I'd previously seen listed and was interested in. Â The biggest problem with Sheriff's sales (to me) is they are sold "AS IS". I don't have a problem with that per se, being the house is already discounted 1/3.....it's just that the "AS IS" statement restricts perspective bidders from touring the house or having an inspector in to look at it. Â Usually the homes are fairly appraised. But I have seen intentional damage done to homes where the owners were mad enough to destroy the property just for spite. In the long run....this CAN'T help them out.....right? Especially if the bank comes after them for the difference. Â Quote Link to comment Share on other sites More sharing options...
montster Posted July 17, 2008 Share Posted July 17, 2008 it's sad, but, in our area, we're actually banking on this. we looked at one house where the owners are doing a short sale. the house itself was in fine condition (except for dead grass and a dirt backyard), but every room was crammed with stuff, and the garage was filled with extra couches and furniture. it was as if the owners had friends or family living there paying rent in hopes of maintaining the mortgage. as far as i can tell, they bought it a few years ago for $850k and are selling it for $700k. Quote Link to comment Share on other sites More sharing options...
TimC Posted July 17, 2008 Share Posted July 17, 2008 (edited) If you are broke and can't sell the house for what you owe there's probably nothing else you can do. Â Sure it is....it's like being upside-down in a car loan. Tell them to show some personal responsibility and take out a personal loan to make up the difference. Sure it sucks...but it's better than stealing. Walking away from a house that you owe more than it's worth is, in the least, stupidity on the borrower's part and at worst, outright theft*. They should be charged with a crime IMO. But they won't. Â I hope it is enough money that they ruin their lives until they finally are forced to meet their contractual obligations. These are the lowest of the low in our society. Â Â Â Â Â Â Â Â Â *Boy, did I mess up some comma usage there. Oh well. Edited July 17, 2008 by TimC Quote Link to comment Share on other sites More sharing options...
AtomicCEO Posted July 17, 2008 Share Posted July 17, 2008 Sure it is....it's like being upside-down in a car loan. Tell them to show some personal responsibility and take out a personal loan to make up the difference. Â Who gives personal loans to people who are behind in their mortgage? You know... besides Vinny "The Claw" Boombatz? Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted July 17, 2008 Share Posted July 17, 2008 Sure it is....it's like being upside-down in a car loan. Tell them to show some personal responsibility and take out a personal loan to make up the difference. Sure it sucks...but it's better than stealing. Walking away from a house that you owe more than it's worth is, in the least, stupidity on the borrower's part and at worst, outright theft*. They should be charged with a crime IMO. But they won't. I hope it is enough money that they ruin their lives until they finally are forced to meet their contractual obligations. These are the lowest of the low in our society.          *Boy, did I mess up some comma usage there. Oh well. That's all fine and dandy and in large measure I see your point but in this credit squeeze climate and already unable to pay the mortgage, how do you:  a. Get a personal loan in the first place? b. Make the repayments on that on top of the mortgage? Quote Link to comment Share on other sites More sharing options...
alexgaddis Posted July 17, 2008 Share Posted July 17, 2008 That's all fine and dandy and in large measure I see your point but in this credit squeeze climate and already unable to pay the mortgage, how do you:Â a. Get a personal loan in the first place? b. Make the repayments on that on top of the mortgage? well you could always just sell off one of the vettes... Quote Link to comment Share on other sites More sharing options...
TimC Posted July 17, 2008 Share Posted July 17, 2008 Who gives personal loans to people who are behind in their mortgage? You know... besides Vinny "The Claw" Boombatz? Â Sorry, I can't answer that. Poor, irresponsible people should simply be put down. How about not getting behind on your mortgage in the first place? Oh wait, that's more of that personal responsibility getting in the way of looking good and overspending. Quote Link to comment Share on other sites More sharing options...
rocknrobn26 Posted July 17, 2008 Author Share Posted July 17, 2008 If you are broke and can't sell the house for what you owe there's probably nothing else you can do. Â That's pretty much it. They bought a fixer upper 3 years ago, did a beautiful job on it, but the market tanked and they had to sell that one for a loss. I feel that I'd be betraying a confidence if I said more. Thanks for the answers. Quote Link to comment Share on other sites More sharing options...
TimC Posted July 17, 2008 Share Posted July 17, 2008 (edited) well you could always just sell off one of the vettes... Â People could have a couple of Vettes if they don't buy two houses to speculation. I've only ever owned one house at a time because I'm not rich enough to own two. I could see the housing bubble burst a year before it did. Doesn't anyone remember the news stories months and months before it actually burst? It was fairly obvious to anyone that the housing market was heading downwards. Â I mean, if you are wealthy enough to buy a second house and you lose money on your second house, then I have trouble feeling sorry for you. Lots of people out there without 1 house. I guess I've lost my sympathy for fairly well-off people that got bitten. And, yes, you have to be fairly well-off to buy two houses. Sheesh. Edited July 17, 2008 by TimC Quote Link to comment Share on other sites More sharing options...
AtomicCEO Posted July 17, 2008 Share Posted July 17, 2008 Sorry, I can't answer that. Poor, irresponsible people should simply be put down. How about not getting behind on your mortgage in the first place? Oh wait, that's more of that personal responsibility getting in the way of looking good and overspending. Â "Poor people should do this" "Poor people can't do that" 'Well then they shouldn't be poor!' Â Good exchange. I grew as a person. Quote Link to comment Share on other sites More sharing options...
dmarc117 Posted July 17, 2008 Share Posted July 17, 2008 the entitled states of america!!! everyone should own a house and 4 cars!!! dont worry if you cant meet your obligations!!! you are entitled!!! Quote Link to comment Share on other sites More sharing options...
TimC Posted July 17, 2008 Share Posted July 17, 2008 Good exchange. I grew as a person. Â You're welcome. Let me know what yer wifey thinks of the extra 1/4 inch. Quote Link to comment Share on other sites More sharing options...
TimC Posted July 17, 2008 Share Posted July 17, 2008 "Poor people should do this""Poor people can't do that" 'Well then they shouldn't be poor!' Â Good exchange. I grew as a person. Â But seriously...these people aren't poor. They speculated on a second house (second one in 20 years) so how about maybe borrowing against their first house to satisfy the difference. Wait, lemme guess, they have no equity in their first house either. :bangshead: Â Maybe sell their SUV. Ooops, upside-down there. Maybe a kidney? Nope, that went in the '98 recession. Â :poorpeoplesuckthen: Quote Link to comment Share on other sites More sharing options...
TimC Posted July 17, 2008 Share Posted July 17, 2008 Anyways, to finish my point. I'm voting for Obama. I wanna get in on some of these entitlements. I figure I've paid in my fair share and now it's time to suckle the teet. It'll be awesome not paying insurance on anything or my mortgage payment. Hell, I might even buy a new Vette and have a car payment for the first time in a long time. The Gubment will bail my sorry ass out. Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted July 17, 2008 Share Posted July 17, 2008 The Gubment will bail my sorry ass out. Don't bank on it. The Gubment is too busy bailing out incompetent banks. You know, the same banks that made a fortune when times were good and whose investors made out like bandits. Â Unbridled capitalism rocks when there's profit but socialism is great when the profit's gone and Joe Taxpayer gets stuck with the bill. Whining investors are happy to grab profits and look the other way when it comes to how those profits were made but run straight to Mommy Gubment when the investment goes south. Â Bah. Maybe deregulation of the mortgage industry wasn't so smart after all. Quote Link to comment Share on other sites More sharing options...
TheShiznit Posted July 17, 2008 Share Posted July 17, 2008 Sure it is....it's like being upside-down in a car loan. Tell them to show some personal responsibility and take out a personal loan to make up the difference. Sure it sucks...but it's better than stealing. Walking away from a house that you owe more than it's worth is, in the least, stupidity on the borrower's part and at worst, outright theft*. They should be charged with a crime IMO. But they won't. I hope it is enough money that they ruin their lives until they finally are forced to meet their contractual obligations. These are the lowest of the low in our society.          *Boy, did I mess up some comma usage there. Oh well.  you know what...this is about the most ignorant post I have read from you Tim. C'mon...where is the outright theft by the bank giving loans they shouldn't have. Where is the outrage of the practice banks use with appraisers to over appraise a house so they get their PMI? Where is the outrage and where is you call for their responsibility? It took two parties to create a mortgage....so the banks are equally as culpable in most of these scenarios. Quote Link to comment Share on other sites More sharing options...
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