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sometimesmommy
Always in my heart.....
Member since 11/06 6686 total posts
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What would you do if your home value fell to the extreme?
With all that is going on with the housing market what would you do if the home you paid 650K for fell to 440K? Would you hold out and suck up the payments when your neighbor just bought the same house for 450K? Your lender isnt willing to modify the loan b/c you make the payments ontime and your income is unchaged. Can you truely blame people for walking away?
DH has friends in Westbury in tihs situation now and I know there are many more families in the same boat.
All of me wants to say they are bad for even considering giving back their keys but there is a part of me that understands why people would.
ETA: I passed them on the info of someone in the mortgage industry--there may be help avaialble to them after all. Hopefully they call the info I passed on.
ETA: I guess this post hit a nerve for many on this board and while I can still understand why people may consider walking way including my friends who are highly educated individuals---Granted they may not follow through but the option was discussed prompted by whatever personal reasons only they know---
But it led me online on my quest for knowledge that surely others have the same thoughts they did and something truely did surprise me
--did you know there are websites that help people walk away? Not just for people having income issues but lack of equity, etc? And they sopposedly have thousands of customers....
WALK AWAY
http://www.cnbc.com/id/24187419
Message edited 1/7/2009 8:42:05 PM.
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Posted 1/3/09 5:17 PM  |
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lovemy2boys
LIF Adult
Member since 10/07 3915 total posts
Name:
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Re: What would you do if your home value fell to the extreme?
Personally I don't THINK I would do that, but I am not in the situation. If my hosue was selling for 200,000 LESS than what I bought for, and I was struggling to pay for it,I might feel differently. I may threaten my lender, but when it came down to it, not sure what I would do. tough situation to be in
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| Posted 1/3/09 5:35 PM |
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sunnyplus3
:)
Member since 11/05 8749 total posts
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Re: What would you do if your home value fell to the extreme?
I don't get why the people you are talking about are complaining, they CAN afford the house right?
My neighbor bought an LCD tv last year for $2100, I bought the EXACT same TV a few weeks ago for $429....I don't think my neighbor would stop paying their best buy credit card & drop the TV back off at the store.
Getting a bad deal on Real Estate because you bought during a bubble IS NOT a valid reason to walk IMO.
Forget what the neighbor paid, your friends need to accept it for what it is. the people that bought my house 4 years before me paid $129,000...but that was a different market. Plenty of things in life & especially in business hinge on timing.
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| Posted 1/3/09 5:47 PM |
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MegZee
My bunny
Member since 5/06 8777 total posts
Name:
Meaghan
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Re: What would you do if your home value fell to the extreme?
i would pay the loan I agreed to pay.
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| Posted 1/3/09 5:47 PM |
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csorisi
My 2 LOVES
Member since 11/05 1984 total posts
Name:
Corinne
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Re: What would you do if your home value fell to the extreme?
Its a bad situation to be in but if you don't have to sell your house then there is no reason to worry about what the house down the block is selling for. Maybe the house cost the seller alot less when they purchased it and needed to get out and were willing to take a big hit on it, doesn't mean the house is worth 200k less. I agree it is frustrating that lenders won't lower rates without charging you all this money to refinance when there are people out there because they made a bad decision and can't afford their payments get to modify their loan. I would like to save money on my loan to but can't convince the banks to modify it that doesn't mean I am going to walk away from my home. I think it is just irresponsible and one of the reasons our country is in the position it is in right now becasue peopel aren't taking responsibity for the decisions they made 1, 2 or even 3 years ago.
I know what its like to pay too much for a house that wasn't worth it but that is the price I paid for buying when I did and putting everything into making this home updated. My DH and I feel that even if we take a loss on teh house when we decide to sell, if we decide to sell that the money we put into it we enjoyed while we are here.
To me I am not looking to sell my house within the next year or 2 or maybe even 5 so the fact that a house is selling for less down the block doesn't effect me right now.
Message edited 1/3/2009 6:10:22 PM.
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| Posted 1/3/09 6:08 PM |
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sometimesmommy
Always in my heart.....
Member since 11/06 6686 total posts
Name:
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Re: What would you do if your home value fell to the extreme?
Posted by csorisi
Its a bad situation to be in but if you don't have to sell your house then there is no reason to worry about what the house down the block is selling for. Maybe the house cost the seller alot less when they purchased it and needed to get out and were willing to take a big hit on it, doesn't mean the house is worth 200k less. I agree it is frustrating that lenders won't lower rates without charging you all this money to refinance when there are people out there because they made a bad decision and can't afford their payments get to modify their loan. I would like to save money on my loan to but can't convince the banks to modify it that doesn't mean I am going to walk away from my home. I think it is just irresponsible and one of the reasons our country is in the position it is in right now becasue peopel aren't taking responsibity for the decisions they made 1, 2 or even 3 years ago.
I know what its like to pay too much for a house that wasn't worth it but that is the price I paid for buying when I did and putting everything into making this home updated. My DH and I feel that even if we take a loss on teh house when we decide to sell, if we decide to sell that the money we put into it we enjoyed while we are here.
To me I am not looking to sell my house within the next year or 2 or maybe even 5 so the fact that a house is selling for less down the block doesn't effect me right now.
No the comps in the area are down by about that amount for homes sold. Even I was surprised at the big drop.
They were hoping to tap into equity for other endeavors so its affecting other areas of their life plan.
I am not saying I agree with them just can understand why people do it. Most people work hard and especially when you have kids you hope that you are utilizing your $$ to its full potential. They feel its a bad investment and want out.
We are not in the same situation yet but have a different game plan. I rather us take a loss by selling and then buy another one since I would qualify for as as first time buyer. But our plan is different than most, We will be retiring to the caribbean so I look at this house as a piggy bank so I will ride this housing pony wether up or down. I doubt if we will ever pay it off since I want early retirement
ETA: I agree about people taking responsibility--but remember banks are getting a bailout while many buyers are still stuck with bad terms---
Message edited 1/3/2009 6:32:58 PM.
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| Posted 1/3/09 6:28 PM |
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browneyedgirl
family is all that matters
Member since 6/06 6513 total posts
Name:
browneyes
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Re: What would you do if your home value fell to the extreme?
Posted by KellyFG
I don't get why the people you are talking about are complaining, they CAN afford the house right?
My neighbor bought an LCD tv last year for $2100, I bought the EXACT same TV a few weeks ago for $429....I don't think my neighbor would stop paying their best buy credit card & drop the TV back off at the store.
Getting a bad deal on Real Estate because you bought during a bubble IS NOT a valid reason to walk IMO.
Forget what the neighbor paid, your friends need to accept it for what it is. the people that bought my house 4 years before me paid $129,000...but that was a different market. Plenty of things in life & especially in business hinge on timing.
i agree 100%
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| Posted 1/3/09 6:42 PM |
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Erica
LIF Adult
Member since 5/05 11767 total posts
Name:
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Re: What would you do if your home value fell to the extreme?
if they can afford it - stick it out.
that's a 30% decrease, but one of our stock accounts went down 67%! should I tell my broker that she has to make up the difference?
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| Posted 1/3/09 6:47 PM |
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SpiceGirl
Dream big
Member since 1/06 2486 total posts
Name:
j
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Re: What would you do if your home value fell to the extreme?
Posted by sometimesmommy
With all that is going on with the housing market what would you do if the home you paid 650K for fell to 440K? Would you hold out and suck up the payments when your neighbor just bought the same house for 450K? Your lender isnt willing to modify the loan b/c you make the payments ontime and your income is unchaged. Can you truely blame people for walking away?
DH has friends in Westbury in tihs situation now and I know there are many more families in the same boat.
All of me wants to say they are bad for even considering giving back their keys but there is a part of me that understands why people would.
I think when anyone buys a house...they need to know that the market fluctuates over the years. Did your friend think the market was just going to keep on going up, up, up?? Here's another way to look at it...when your friends purchased their home at the peak of the market...I'm sure there were many people on their block who had bought homes 5-10 years earlier for a 1/4 of the price...right? It didn't bother them then...so, why should it bother them now.
People need to stop looking at their homes as big ATM machines. Maybe they had planned to pull money out of their equity to fund certain endeavors...well, they'll just have to put off those plans until the market shifts again.
If people just start walking away from their homes because the value goes down a little (or a lot), then we're ALL in trouble.
I bought my house a year ago...and I'm sure if I were to buy it today, I could probably get it for at least 20K less...does it s*ck...yes. But you can't just walk away from your responsibility because things didn't go your way.
Are your friends having trouble paying their mortgage? Or do they just pi$$ed that they could buy the same house now for $200K less? If they can afford to pay their bills...they should keep paying them. Listen, in 10 years...who knows, maybe their house will be worth double what they paid for it. I'm sure they wouldn't have any trouble with that scenario 
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| Posted 1/3/09 6:50 PM |
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hazeleyes33
LIF Adult
Member since 5/05 13060 total posts
Name:
Ginger
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Re: What would you do if your home value fell to the extreme?
Posted by browneyedgirl
Posted by KellyFG
I don't get why the people you are talking about are complaining, they CAN afford the house right?
My neighbor bought an LCD tv last year for $2100, I bought the EXACT same TV a few weeks ago for $429....I don't think my neighbor would stop paying their best buy credit card & drop the TV back off at the store.
Getting a bad deal on Real Estate because you bought during a bubble IS NOT a valid reason to walk IMO.
Forget what the neighbor paid, your friends need to accept it for what it is. the people that bought my house 4 years before me paid $129,000...but that was a different market. Plenty of things in life & especially in business hinge on timing.
i agree 100%
ITA with you.
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| Posted 1/3/09 7:07 PM |
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sometimesmommy
Always in my heart.....
Member since 11/06 6686 total posts
Name:
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Re: What would you do if your home value fell to the extreme?
I dont know thier finances only what they volunteer but they seem to be doing well.
They were just an example and my thought process was that if they are thinking it--imagine how many others are probably thinking the same thing. So I think when house prices fall a whole new bunch of problems are goign to pop up from other buyers.
Message edited 1/3/2009 7:09:10 PM.
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| Posted 1/3/09 7:08 PM |
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nov04libride
big brother <3
Member since 5/05 14672 total posts
Name:
Me
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Re: What would you do if your home value fell to the extreme?
Posted by hazeleyes33
Posted by browneyedgirl
Posted by KellyFG
I don't get why the people you are talking about are complaining, they CAN afford the house right?
My neighbor bought an LCD tv last year for $2100, I bought the EXACT same TV a few weeks ago for $429....I don't think my neighbor would stop paying their best buy credit card & drop the TV back off at the store.
Getting a bad deal on Real Estate because you bought during a bubble IS NOT a valid reason to walk IMO.
Forget what the neighbor paid, your friends need to accept it for what it is. the people that bought my house 4 years before me paid $129,000...but that was a different market. Plenty of things in life & especially in business hinge on timing.
i agree 100%
ITA with you.
ITA too.
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| Posted 1/3/09 7:11 PM |
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itsbabytime
LIF Adult
Member since 11/05 9644 total posts
Name:
Me
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Re: What would you do if your home value fell to the extreme?
I'm not sure I understand this post. The people you are talking about agreed to buy a house at a certain price because they presumably could afford it. They got a loan to pay it off and now that the value of their home is going down and not up they just want to walk away and say so sorry we changed our mind b/c our house isn't going up in value?
If I am understanding this situation correctly I think it is a little ridiculous. They didn't have to buy - they could have rented. When we lived in nyc we chose to rent instead of buy b/c we thought the prices were inflated and would go down in the short period of time we planned to live there. Well, so sad for us - they went up like crazy so we lost out big time by renting. Well when we moved to LI we decided to do the same thing and this time we made the right decision...you win some you lose some. I feel like the people you are talking about made a bad financial decision for themselves (in hindsight) and now they are looking to get out of responsibility for it? Unfortunately all of our decisions in life don't come with money back guarantees.
ETA: I'm not sure "blame" is the right word - I don't "blame" them but, I'm not sure I understand this mentality and I certainly don't feel its the right thing to do.
Message edited 1/3/2009 7:29:09 PM.
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| Posted 1/3/09 7:19 PM |
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sometimesmommy
Always in my heart.....
Member since 11/06 6686 total posts
Name:
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Re: What would you do if your home value fell to the extreme?
I dont think its that its not going up in value but rather the significant dollar amount and the time it will take to rebuild the equity versus what they had tied into the home and future goals.
We will see a loss if the market continues this way but I doubt we will see a hit as severe as thiers so I truely dont know what anyone would do if they were not in the exact situation. Just know alot of it is happening and will continue.
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| Posted 1/3/09 7:36 PM |
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Kara
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Member since 3/07 13217 total posts
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They call me "Tater Salad"
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Re: What would you do if your home value fell to the extreme?
Posted by sometimesmommy
I dont think its that its not going up in value but rather the significant dollar amount and the time it will take to rebuild the equity versus what they had tied into the home and future goals.
We will see a loss if the market continues this way but I doubt we will see a hit as severe as thiers so I truely dont know what anyone would do if they were not in the exact situation. Just know alot of it is happening and will continue.
I know I wouldn't ruin my credit with a foreclosure over a house I could afford. Sorry, but I don't need to be in the exact same situation to know I would NOT walk away from a loan I could afford just b/c my home declined in value.
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| Posted 1/3/09 7:40 PM |
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sometimesmommy
Always in my heart.....
Member since 11/06 6686 total posts
Name:
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Re: What would you do if your home value fell to the extreme?
Posted by Kara
Posted by sometimesmommy
I dont think its that its not going up in value but rather the significant dollar amount and the time it will take to rebuild the equity versus what they had tied into the home and future goals.
We will see a loss if the market continues this way but I doubt we will see a hit as severe as thiers so I truely dont know what anyone would do if they were not in the exact situation. Just know alot of it is happening and will continue.
I know I wouldn't ruin my credit with a foreclosure over a house I could afford. Sorry, but I don't need to be in the exact same situation to know I would NOT walk away from a loan I could afford just b/c my home declined in value.
For their specific stuation yes because they have the means but would it be worth it if they were making the payments and only had a small amount of $$ left over each month each month while someone buying the same house would be paying say 700.00 less and getting a lower rate...In this economy....
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| Posted 1/3/09 7:47 PM |
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sunnyplus3
:)
Member since 11/05 8749 total posts
Name:
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Re: What would you do if your home value fell to the extreme?
Posted by sometimesmommy
I dont think its that its not going up in value but rather the significant dollar amount and the time it will take to rebuild the equity versus what they had tied into the home and future goals.
We will see a loss if the market continues this way but I doubt we will see a hit as severe as thiers so I truely dont know what anyone would do if they were not in the exact situation. Just know alot of it is happening and will continue.
you mentioned earlier in the thread that these people are banking on equity to accomplish life goals. Do you know how our parents & Grandparents got equity? THEY PAID THEIR MORTGAGE according to its terms.
There have only been a few windows of time in the history of this country that national home values increased at the pace they did between 2002-2006...most of the time an increase in equity is something that happens over the long haul. Do you ever remember older generations in your family tapping their equity? that's because they didn't, its something that you saved for a rainy day or a dire emergency.
IMO anyone that *thinks* they know enough about RE & business to buy a property at what was CLEARLY the peak of of a bubble, should know better then to think every property is a hand over fist money maker.
To me this case is clear cut ( LOL like its the People's court) They need to live with the consequence of their mistakes & this is why WE CANNOT allow the lenders to forgive all of these loans.
Some people just want out because they are dumbazzes, not because they are suffering a hardship.
Case closed.
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| Posted 1/3/09 7:47 PM |
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Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: What would you do if your home value fell to the extreme?
Posted by Kara
.
I know I wouldn't ruin my credit with a foreclosure over a house I could afford. Sorry, but I don't need to be in the exact same situation to know I would NOT walk away from a loan I could afford just b/c my home declined in value.
I agree 100%
real estate is a long term investment
the equity in your house is not meant to fund other things (IMHO I would never pull equity for anything that wasn't going to increase the value of my home)
using you house as an ATM is one of the causes of this current mess
your friend needs to just ride this out and be thankful that he bought a house that he could afford - and that he doesn't have a hardship that would quaify him for a modification
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| Posted 1/3/09 7:49 PM |
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Kara
Now Zagat Rated!
Member since 3/07 13217 total posts
Name:
They call me "Tater Salad"
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Re: What would you do if your home value fell to the extreme?
Posted by sometimesmommy
Posted by Kara
Posted by sometimesmommy
I dont think its that its not going up in value but rather the significant dollar amount and the time it will take to rebuild the equity versus what they had tied into the home and future goals.
We will see a loss if the market continues this way but I doubt we will see a hit as severe as thiers so I truely dont know what anyone would do if they were not in the exact situation. Just know alot of it is happening and will continue.
I know I wouldn't ruin my credit with a foreclosure over a house I could afford. Sorry, but I don't need to be in the exact same situation to know I would NOT walk away from a loan I could afford just b/c my home declined in value.
For their specific stuation yes because they have the means but would it be worth it if they were making the payments and only had a small amount of $$ left over each month each month while someone buying the same house would be paying say 700.00 less and getting a lower rate...In this economy....
No, if I could make the payments and pay all my bills, why on earth would I ruin my credit by walking away? Where exactly would I go to live with a foreclosure on my AND my husband's credit?
ETA -- And regardless, I don't take walking away from serious commitments lightly. It's not anyone's fault but my own if my neighbor lives in a comparable house for less money... so do the people who bought a comparable house 20 years ago. Life's not fair. Real estate, as any investment, comes with some risk. Walking away b/c someone else got it cheaper now isn't the right or responsible thing to do. Honestly, foreclosure would be an ABSOLUTE last resort for me. I'd fight to never have to do that. I SURE wouldn't choose foreclosure on a house I could afford.
Message edited 1/3/2009 7:59:55 PM.
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| Posted 1/3/09 7:57 PM |
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Kara
Now Zagat Rated!
Member since 3/07 13217 total posts
Name:
They call me "Tater Salad"
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Re: What would you do if your home value fell to the extreme?
Posted by KellyFG
To me this case is clear cut ( LOL like its the People's court) They need to live with the consequence of their mistakes & this is why WE CANNOT allow the lenders to forgive all of these loans.
Some people just want out because they are dumbazzes, not because they are suffering a hardship.
Case closed.
Exactly! 
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| Posted 1/3/09 8:00 PM |
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sometimesmommy
Always in my heart.....
Member since 11/06 6686 total posts
Name:
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Re: What would you do if your home value fell to the extreme?
Posted by Kara
Posted by KellyFG
To me this case is clear cut ( LOL like its the People's court) They need to live with the consequence of their mistakes & this is why WE CANNOT allow the lenders to forgive all of these loans.
Some people just want out because they are dumbazzes, not because they are suffering a hardship.
Case closed.
Exactly!
I wish them luck. NOt what I would do either but.....Its only on his credit so they will start over unlike so many. We had the same broker and I suspect he knew the bubble would break soon and he pushed them to finance under one spouse so they could buy another home later and qualify for 1st time home buyer programs. I think this may be the reason they can walk away so easily. Whatever the situation--they are not taking it lightly trust me..they keep going back and forth.
Message edited 1/3/2009 8:19:21 PM.
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| Posted 1/3/09 8:18 PM |
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sunnyplus3
:)
Member since 11/05 8749 total posts
Name:
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Re: What would you do if your home value fell to the extreme?
Posted by sometimesmommy
Posted by Kara
Posted by KellyFG
To me this case is clear cut ( LOL like its the People's court) They need to live with the consequence of their mistakes & this is why WE CANNOT allow the lenders to forgive all of these loans.
Some people just want out because they are dumbazzes, not because they are suffering a hardship.
Case closed.
Exactly!
I wish them luck. NOt what I would do either but.....Its only on his credit so they will start over unlike so many. We had the same broker and I suspect he knew the bubble would break soon and he pushed them to finance under one spouse so they could buy another home later and qualify for 1st time home buyer programs. I think this may be the reason they can walk away so easily.
Good for them if they can sleep at night....personally I find doing that a crime. Its like stealing. The good news is the karma bus doesn't even tap the brakes when it plows down a-holes like them 
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| Posted 1/3/09 8:21 PM |
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Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: What would you do if your home value fell to the extreme?
Posted by sometimesmommy
[I would do either but.....Its only on his credit so they will start over unlike so many. We had the same broker and I suspect he knew the bubble would break soon and he pushed them to finance under one spouse so they could buy another home later and qualify for 1st time home buyer programs. I think this may be the reason they can walk away so easily. Whatever the situation--they are not taking it lightly trust me..they keep going back and forth.
honestly- those days are long over
with the new requirments it would be hard to buy a home on LI with 1 income
stated income loans are illegal in NY now
you need to go full doc - and your SO foreclosure will need to be disclosed to the bank
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| Posted 1/3/09 8:30 PM |
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BaroqueMama
Chase is one!
Member since 5/05 27530 total posts
Name:
me
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Re: What would you do if your home value fell to the extreme?
Posted by browneyedgirl
Posted by KellyFG
I don't get why the people you are talking about are complaining, they CAN afford the house right?
My neighbor bought an LCD tv last year for $2100, I bought the EXACT same TV a few weeks ago for $429....I don't think my neighbor would stop paying their best buy credit card & drop the TV back off at the store.
Getting a bad deal on Real Estate because you bought during a bubble IS NOT a valid reason to walk IMO.
Forget what the neighbor paid, your friends need to accept it for what it is. the people that bought my house 4 years before me paid $129,000...but that was a different market. Plenty of things in life & especially in business hinge on timing.
i agree 100%
Thank you! I agree 100%!
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| Posted 1/3/09 8:30 PM |
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sometimesmommy
Always in my heart.....
Member since 11/06 6686 total posts
Name:
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Re: What would you do if your home value fell to the extreme?
Posted by KellyFG
Posted by sometimesmommy
Posted by Kara
Posted by KellyFG
To me this case is clear cut ( LOL like its the People's court) They need to live with the consequence of their mistakes & this is why WE CANNOT allow the lenders to forgive all of these loans.
Some people just want out because they are dumbazzes, not because they are suffering a hardship.
Case closed.
Exactly!
I wish them luck. NOt what I would do either but.....Its only on his credit so they will start over unlike so many. We had the same broker and I suspect he knew the bubble would break soon and he pushed them to finance under one spouse so they could buy another home later and qualify for 1st time home buyer programs. I think this may be the reason they can walk away so easily.
Good for them if they can sleep at night....personally I find doing that a crime. Its like stealing. The good news is the karma bus doesn't even tap the brakes when it plows down a-holes like them
-that wasnt needed..you can state how you feel without going there. Thats really immature.
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| Posted 1/3/09 8:41 PM |
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