A Undeserved Silver Lining

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Submitted by Raybyrnes on November 6, 2008 - 8:10pm

A situation that I have been giving some thought to as to how people who have taken ridiculous amounts of risk could make out like bandits and NOT have to walk away.

Say I bought 2 houses. 1 as a primary residence and 1 which I speculated on and am now renting out cash flow negative and a couple of hundred thousand underwater.

A person in this situation could stop making payments and continue collecting rent on the rental property or both properties for that matter. Foreclosure will come but with the bailout in place the bank may have government backing to now modify this home loan. With the modification the person now turns a cashflow negative home into a cash flow positive home while at the same time pocketing rent while he was not making the payments.

If the government comes back and says no dice becasue it is a rental they could now elect to swap homes with their renters technically making it their primary residence.

Worst case scenario is they avoid forclosure share in the long term profits on the home with the bank and have a cash flow producing property.

Am i missing something?

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Sounds just about right!!
Submitted by socrattt on November 6, 2008 - 8:46pm.

Sounds just about right!! America is moving in the right direction. Welfare to those deserving!

Never in my right mind did I think that I would pay the ultimate price for being responsible. I lost 70% of my 401K which was a decent amount. My company had a number of investments in different stocks as well which plummeted and I refrained from taking any risk in the housing market!! I have lost hundreds of thousands and those who had nothing are probably sitting in a better position. It's quite obvious that playing by the rules doesn't work anymore. America is in trouble and this Country's future is very bleak.

That sucks socratt, I'd be
Submitted by nostradamus on November 6, 2008 - 11:53pm.

That sucks socratt, I'd be pissed.

This seems like a good thread to again post my questions:

Has anyone heard of any bailouts or loan modifications for investment/rental homes? Does anyone have a reliable number of how many homes are rentals?

Yes - you are missing
Submitted by sdduuuude on November 7, 2008 - 8:37am.

Yes - you are missing something.

It was the bank that took on the massive risk, not the home buyer.

I'm pretty sure the bailouts
Submitted by cr on November 7, 2008 - 11:21am.

I'm pretty sure the bailouts only cover primary residences.

So build an apt. above the garage of your $5 million estate and live in that.