HumDoHamaraDo said:BobM73 said:If you have a fixed rate mortgage, there's no provision for increasing your interest rate....that's why it's called "fixed". Dont' confuse credit cards and mortgages.

I agree with the poster that said to find out why the TH next door is only asking $290.

Responsibility exists on both sides of the contract. The bank also has some responsibility to adequately investigate the viability of a loan.

If I give a bum $500 because he promised to pay me back in a day and I never see him again, it's as much my fault as the bum's.
Looks likes the OP can afford to pay, he may not want to, but he can afford to pay. The Bank did their due diligence and should not be punished for a weak Real-Estate market.

In that case, the Seller did his due dillegance and should not be punished by a weak Real Estate market.

Whether he can afford to pay or not is irrelevant to THIS thread. The question is: What is he legally bound to do by the contract that WAS DRAFTED by the bank.

THEY wrote the terms, they left the loophole. We're just trying to figure out how to exploit it to the OP's benefit.

I fail to see how this is any different than an AOR. It's a financial strategy that will cost the bank money and was not anticipated when the offer was made.

Can we please drop the ethical arguments, they belong in another thread. This thread should focus on the financial and legal ramifications of such a move.

The key one as I see it are "deficiency judgements", wherein the borrower is liable for the difference between selling price and amount owed (or fair market value) depending on state. The applicability of this (or even existance) is widely variable from state to state. Has anyone found a good summary of the laws on this type of judgement?

michal1980 said:Ahhh Just like when I ran up my c.c. back in the day, then lost my job and the choice was pay the C.c. company or eat. I should have had them forgive my debt because my market conditions changed. My c.c. score still begs to differ. And If I would have posted that here back then, I'd be beat down as a deadbeat.-

I get it though. Walk away from Big 'losses' = Smart Financial Planning. Walk away from bills you just don’t have money to pay for = Deadbeat.

Just admit the hypocrisy and move on, everything else is just rationalizing.I'm also more on your side of this side-argument regarding debt ethics, but I think the apparent hypocrisy of the FW crowd is a bit more complex than you are considering.

FWf values frugality, investment, and savings. Inability to separate needs from wants of consumer goods is frowned upon. Financial irresponsibility to insure a successful date is scorned -- and in a stepwise fashion, spending patterns that "ass-u-me" future unearned income is criticized.

And yet, I bet many people here have no problem with businesses taking tax deductions for losses.

So, is walking away from a home mortgage closer to a business debt, or closer to a teenager running up a credit card ?

You can't be sure that house nextdoor is the same until you do a walkthrough. For all you know it looks great on the outside, then you go inside and notice 100 cats lived here without human care and everything destroyed and smells beyond belief, or the dummies let their tub leak for months ruining all sorts of things, or... the list goes on.

But for fun, let's entertain the idea YOUR house is only worth $290K. So what? It's like anything else you buy. The problem is with homes everyone has had it ingrained into their head that a HOME is an APPRECIATING asset. Of course, that's what my financial advisor told me of the great list of 5-star mutual funds I'm in that's down 30% in the past 6 months. They have their time.. it's down now, but will be up later.

The most important thing is that I'm not sure I read.. do you want to live here a long time? If so, who cares what the value is today just like any long-term investment. Ride it out! If it was worth what you paid for it a few years ago it will someday again too. Just be glad it's not like some things you can purchase like a specialty interest customized vehicle that depriciates 50% with no chance of recovery after using it, or a stock that is at it's peak and it loses bigtime to never recover, or.. the list goes on.

Point is, it's YOUR house, don't worry about the market. Just live there and enjoy it. As for your problem on the financing, well, you chose to sign up for the ARM and took the initial lower interest rate based on the risks. From the beginning, you had a minimal amount of equity in your home and used multiple loans to avoid the PMI so you couldn't have afforded it then. It's great you can afford it now, and I suggest you keep avoiding it. Don't pay down anything yet, keep the money in savings earning interest (it's not difficult to earn more than 8%/yr in savings beating your interest, plus those loans interest are tax writeoff's for you so you don't even need to make 8% to cover it).

When it's close to resetting, see how the market is and decide four months early if it will be necessary to refi. That will give you enough time to pay something off, have it reflect on your credit reports, and get the ball rolling on a new loan if needed. A lot can happen in that time frame. As long as you keep building your nest egg then you can do with the money as you need to at that time.

All-in-all, I'd say what you owe is what you agreed to pay and that's not negotiable. Just keep up the payments, don't overpay the mortgage, and build a strong nest egg!

golfer79 said:I am in a very similar situation except with less money (paid 160K in 2003 and value is now $125K probably lower). I had a 3 year ARM when I bought back then. I was about to refinance a few months ago with Huntington and they were able to use the original value of my home. I paid 2k in refi fees and that was it. I would suggest trying this as it may work, but you are sill going to be under. My loan is now at 142k so I am under at least 20. Even if I rent it out we would still be losing about $150 a month from the current rental market. We have been trying to move for the past year and half but obviously can’t because of the market conditions in Michigan. We are giving a child soon and we will not be able to fit in our condo anymore.

The idea of walking away sparks a little interest as the condo is only in my name and not my wife’s. We have about 55k in liquid savings right now (emigrant e-trade etc) She has good credit it is intriguing to think our new house could then be under her name. I wont need my credit for much of anything any time soon, as both of my cards are paid for already.

Quoted for future.

now my comments.

Simple brilliant, you have the money to sell the house. Or pay it down to where the loan is less then its value.

Yet you want to steal 20k+. Oh wait I forgot, thats buisness planning. wheres that socialized thread again...

ilikebtmoney said:michal1980 said:golfer79 said:I am in a very similar situation except with less money (paid 160K in 2003 and value is now $125K probably lower). I had a 3 year ARM when I bought back then. I was about to refinance a few months ago with Huntington and they were able to use the original value of my home. I paid 2k in refi fees and that was it. I would suggest trying this as it may work, but you are sill going to be under. My loan is now at 142k so I am under at least 20. Even if I rent it out we would still be losing about $150 a month from the current rental market. We have been trying to move for the past year and half but obviously can’t because of the market conditions in Michigan. We are giving a child soon and we will not be able to fit in our condo anymore.

The idea of walking away sparks a little interest as the condo is only in my name and not my wife’s. We have about 55k in liquid savings right now (emigrant e-trade etc) She has good credit it is intriguing to think our new house could then be under her name. I wont need my credit for much of anything any time soon, as both of my cards are paid for already.

Quoted for future.


now my comments.

Simple brilliant, you have the money to sell the house. Or pay it down to where the loan is less then its value.

Yet you want to steal 20k+. Oh wait I forgot, thats buisness planning. wheres that socialized thread again...

Yeah no kidding.. people keep trying to "avoid" the ethics, morality, etc of this practice but why do you think our government needed to agree to give $200B to the banks?? Yes I admit some of that was due to banks not properly screening loans, but this kind of attitude playing the "neener neener neener! you big bad bank can't touch me!" bullcrap is what's destroying our economy, and making our country look like a bunch of pansies. Toughen up, you bought it, and agreed to pay that price, now pay for it. Very easy for someone to say who is not in the same situation.

golfer79 said:ilikebtmoney said:michal1980 said:golfer79 said:I am in a very similar situation except with less money (paid 160K in 2003 and value is now $125K probably lower). I had a 3 year ARM when I bought back then. I was about to refinance a few months ago with Huntington and they were able to use the original value of my home. I paid 2k in refi fees and that was it. I would suggest trying this as it may work, but you are sill going to be under. My loan is now at 142k so I am under at least 20. Even if I rent it out we would still be losing about $150 a month from the current rental market. We have been trying to move for the past year and half but obviously can’t because of the market conditions in Michigan. We are giving a child soon and we will not be able to fit in our condo anymore.

The idea of walking away sparks a little interest as the condo is only in my name and not my wife’s. We have about 55k in liquid savings right now (emigrant e-trade etc) She has good credit it is intriguing to think our new house could then be under her name. I wont need my credit for much of anything any time soon, as both of my cards are paid for already.

Quoted for future.


now my comments.

Simple brilliant, you have the money to sell the house. Or pay it down to where the loan is less then its value.

Yet you want to steal 20k+. Oh wait I forgot, thats buisness planning. wheres that socialized thread again...

Yeah no kidding.. people keep trying to "avoid" the ethics, morality, etc of this practice but why do you think our government needed to agree to give $200B to the banks?? Yes I admit some of that was due to banks not properly screening loans, but this kind of attitude playing the "neener neener neener! you big bad bank can't touch me!" bullcrap is what's destroying our economy, and making our country look like a bunch of pansies. Toughen up, you bought it, and agreed to pay that price, now pay for it. Very easy for someone to say who is not in the same situation.

You don't think I made stupid financial decisions in my lifetime? I've made plenty! I have no problem admitting that. I learned from them by toughing it out. My parents didn't bail me out, nor my banks, nor friends, nor a court. Did you buy your house to live in.. or as an investment? Either way, you're doing fine and you should be thankful the banks helped you out when they didn't have to do that (probably anyways, in my state it's 2 years for using the last sale price as the value). You're in a good position and you're still considering ripping them off based on a CURRENT value. You don't NEED to sell. Don't let greed take control of this so you can turn into another statistic and contribute further to the decline of our economy.

You don't think I made stupid financial decisions in my lifetime? I've made plenty! I have no problem admitting that. I learned from them by toughing it out. My parents didn't bail me out, nor my banks, nor friends, nor a court.


Agreed but should I lose 50k?

Did you buy your house to live in.. or as an investment?
To live in

You're in a good position and you're still considering ripping them off based on a CURRENT value.

Based on reading this thread it crossed my mind, yes. The current value is 125k based on my tax assesment. However there are 3 other in forclusure right now selling for 115K

You don't NEED to sell

Correct, we can afford it we are not moving out of state, but we can not fit in this condo with a newborn. There is also a yappy POS little dog that constantly barks above us.

Don't let greed take control of this so you can turn into another statistic and contribute further to the decline of our economy.[/

I agree with this, but as mentioned there are already 3 other forclosures in our sub. These are condo's they are all bascially the same. This is not a greed factor this would be a financial decision and bring peace of mind. By me continuing to pay our mortgage and living in our condo for another 2 years what do I gain out of.

Golfer,

You only lose $50K if you sell today. Tough it out a few years and there's very little chance it'll still be that low.

How small is this condo? My cousin is married and has three kids in an apartment the size of my great room, no joke. So just because it's not overly convenient doesn't mean it's not doable.

If you ever refinanced then it became a recourse loan and they can come after any of your assets.

HumDoHamaraDo said:If you ever refinanced then it became a recourse loan and they can come after any of your assets.

I thought that was only if there was equity taken out or a second taken after the purchase.