You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
What to do with negative equity?
- Thread starter NanoTick
- Start date
Quote from NanoTick:
Suppose you have a $400K mortgage debt on a $300K house (-100K equity) and you walk. Can the bank go after your bank account and other assets like 401k, cars, boats, etc.?
I would walk if I couldn't afford it. Home loans are non recourse. Just leave the keys on the counter and walk.
Remember whenâ¦..
Just because you had the right to do something didnât make it right to do!
Donât you need a roof over your head anyway?
Iâm sure there are circumstances in which one would have no choice but to foreclose.
But to do it just because you got a bad asset on the balance sheetâ¦â¦ donât go morally bankrupt.
Arenât we supposed to buy low and sell high? Why do the masses panic and sell low and buy high?
I think everyone on this website has a house that is worth at least a 25% less than it was in 2006.
Hang tough things will turn around....
Can you imagine bailing on your house and then 6 months later you missed out on your Obama bail outâ¦.
Just because you had the right to do something didnât make it right to do!
Donât you need a roof over your head anyway?
Iâm sure there are circumstances in which one would have no choice but to foreclose.
But to do it just because you got a bad asset on the balance sheetâ¦â¦ donât go morally bankrupt.
Arenât we supposed to buy low and sell high? Why do the masses panic and sell low and buy high?
I think everyone on this website has a house that is worth at least a 25% less than it was in 2006.
Hang tough things will turn around....
Can you imagine bailing on your house and then 6 months later you missed out on your Obama bail outâ¦.
Quote from fortunatti:
Can someone in very simple terms explain a short sale on real estate?
Unlike a stock market "short" sale, a real estate short sale is exactly as it sounds.
A sale for an amount "short" of what is owed.
The homeowner NEVER receives funds in a short sale. More important, the lender MUST agree to a short sale, and will likely set a limit price, a time frame, require an MLS listing and a real estate agent; no for sale by owner.
As for credit rating/FICO score, both foreclosure and short sale will create havoc, and will remain on credit reports, generally for 7-10 years; same as a full ch.7 bankruptcy. The one difference is a short sale MAY allow new mortgage/credit to be established sooner than foreclosure. Foreclosure is usually shunned for at least 4-5 years, whereas a short sale MAY be shunned for (only)2-4 years.
Dont worry, Uncle Obama will help you. Your two Uncles, Obama and Sam will make sure you Ok. They will help you refi, they will
forgive your "Negitive Equity" if you walk away. Oh sure, you will get letters from the Mortgage Lender. But your two Uncles will protect you and it will be no big deal.
The same two Uncles that will protect you, punish those who have not run like lemmings to purchase a home in the last 5 years. Those who have saved up 20% plus to put down, those who have waited till the "Histera" of home buying leveled off. Those who did their research and walk away from over valued property during the Lemming run. These individuals will now have to jump throw flaming hoops of red tape to try and obtain a mortgage. They will be forced to put down 20% to 30%, supply all documentaion of income, assets and future earnings. They may get locked in a low rates they may have to pay a point or more as "Insurance".
So, what do you do when your negitive equity? YOU F*((&( SUCK IT UP and continue to honor the contract that you signed and take responsability for you actions, the actions that you used when buying the house at the Highs.
Or you can walk away, run from your responsabilities. Of course this will be the Motto for the Obama Nation. Besides, don't worry be ahappy, the "RICH" will be taxed more so you can make the same mistake again, in the next housing bubble.
PS: the Short Sale is worthless. It's something that the NRA and a few other "Mortgage Idiots' came up with. This will keep the comission coming. Read up on short sales.
PSS: That is right, do you wana miss out on OBAMA's BAILOUT? Welcome to the mentality of the "Looser Generation" in America.
forgive your "Negitive Equity" if you walk away. Oh sure, you will get letters from the Mortgage Lender. But your two Uncles will protect you and it will be no big deal.
The same two Uncles that will protect you, punish those who have not run like lemmings to purchase a home in the last 5 years. Those who have saved up 20% plus to put down, those who have waited till the "Histera" of home buying leveled off. Those who did their research and walk away from over valued property during the Lemming run. These individuals will now have to jump throw flaming hoops of red tape to try and obtain a mortgage. They will be forced to put down 20% to 30%, supply all documentaion of income, assets and future earnings. They may get locked in a low rates they may have to pay a point or more as "Insurance".
So, what do you do when your negitive equity? YOU F*((&( SUCK IT UP and continue to honor the contract that you signed and take responsability for you actions, the actions that you used when buying the house at the Highs.
Or you can walk away, run from your responsabilities. Of course this will be the Motto for the Obama Nation. Besides, don't worry be ahappy, the "RICH" will be taxed more so you can make the same mistake again, in the next housing bubble.
PS: the Short Sale is worthless. It's something that the NRA and a few other "Mortgage Idiots' came up with. This will keep the comission coming. Read up on short sales.
PSS: That is right, do you wana miss out on OBAMA's BAILOUT? Welcome to the mentality of the "Looser Generation" in America.
Quote from EMRGLOBAL:
So, what do you do when your negitive equity? YOU F*((&( SUCK IT UP and continue to honor the contract that you signed and take responsability for you actions, the actions that you used when buying the house at the Highs.
BBBUUULLLLLSSSHHHIIIITTT!
By law, a mortgage contract allows (usually) the buyer to return property. For the risk of return or default, the lender charges interest and fees. There is no reason to be "guilty" for exercising buyer rights of a contract.
Who is to say prices will not continue to tumble? Or maybe they stabilize and never rebound? or or or.
Do you cut trade losses and move on, or do you hope and hold? For how long? days? months? years? decades? I've read some of your posts EMR. You do not have the "it can't/won't happen" take on things. WTF is with this altruistic suck it up with honor bullshit?!
Doing what is in your own best interests is the greater responsibility. Only you are responsible for you! The problem here is that Obama want's to appoint you, and you, and you, to be responsible for me.
Quote from galiano:
By law, a mortgage contract allows (usually) the buyer to return property.
Are you sure about this? I would think your other assets, other than retirement savings, could be attached if the lender succcessfully sued you (unless protected due to a bankrupcy).
In any case, besides ruining your credit and possibly future job prospects, the lender's loss (loan balance less net proceeds from disposing of the property) can be reported to the IRS on a 1099 form as "loan forgiveness". This is then subject to ordinary income tax. The lender's use to do this more before the foreclosure crisis but I believe it's still available to them to give you a hard time if they think you have the ability to pay but walk away.
You should of pondered this when taking out a $400,000 mortgage. Then you would know what to do.
Quote from NanoTick:
Suppose you have a $400K mortgage debt on a $300K house (-100K equity) and you walk. Can the bank go after your bank account and other assets like 401k, cars, boats, etc.?
Quote from Hurricane:
Are you sure about this? I would think your other assets, other than retirement savings, could be attached if the lender succcessfully sued you (unless protected due to a bankrupcy).
In any case, besides ruining your credit and possibly future job prospects, the lender's loss (loan balance less net proceeds from disposing of the property) can be reported to the IRS on a 1099 form as "loan forgiveness". This is then subject to ordinary income tax. The lender's use to do this more before the foreclosure crisis but I believe it's still available to them to give you a hard time if they think you have the ability to pay but walk away.
It varies by state, the legality of walking away per the mortgage contract, to some extent. More important however, the mortgage contract does not include HELOCs, seconds, or other "piggy-back" lending. In many cases, the existence of such piggy-backs triggers certain aspects of the original. For instance, the obvious pecking order clauses are in play. So indeed, each case is somewhat unique.
As for loan forgiveness, suing, and whatever: lenders have the right and responsibility of doing what is deemed best interests, just as the borrower has the right and responsibility of doing what is deemed best interests.
Quote from NanoTick:
Suppose you have a $400K mortgage debt on a $300K house (-100K equity) and you walk. Can the bank go after your bank account and other assets like 401k, cars, boats, etc.?
Why is the debt higher than morgage? Is it because only of house depreciation, or did you take home equity loan when the market went high? Or both?
If you took equity, then what did you spend it for? Can you sell things you bought to have some cash for your morgage? You have boat you say? Sell it, not important right now. Use the cash to make a payment. Talk to lender about making your payments easier for now. They want you to not default. Do not charge anything to credit cards.
Eat rice and beans! Go to library for books, Ride your bike. Only buy what you have earned. Live simple and build your life.