Home › Forums › Financial Markets/Economics › Famed Columnist gives rotten mortgage advice
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patb.
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June 28, 2009 at 12:32 AM #15949June 28, 2009 at 12:44 AM #421154
temeculaguy
ParticipantI don’t get it, what do you mean by “dumping the heloc?” At this point he can’t roll it into a single loan at the lower rate, that is evident by what he wrote and the advice. The advice to pay down the heloc faster, seems good advice to me, since rolling it is out of the question.
Do you mean for him to not pay the heloc? You said they wont foreclose, the hell they wont. Helocs can and will foreclose, even if the primary loan is current. That’s the deal with helocs, it’s collateral is the house. If they choose to not foreclose because it will wipe them out after the first is paid, then they can and will rack fees and interest and credit hits while you dont pay them. This guy was looking to maximize his situation, get a good rate, not take was isn’t his, there’s no mention of “I can’t afford to pay.”
June 28, 2009 at 12:44 AM #421384ParticipantI don’t get it, what do you mean by “dumping the heloc?” At this point he can’t roll it into a single loan at the lower rate, that is evident by what he wrote and the advice. The advice to pay down the heloc faster, seems good advice to me, since rolling it is out of the question.
Do you mean for him to not pay the heloc? You said they wont foreclose, the hell they wont. Helocs can and will foreclose, even if the primary loan is current. That’s the deal with helocs, it’s collateral is the house. If they choose to not foreclose because it will wipe them out after the first is paid, then they can and will rack fees and interest and credit hits while you dont pay them. This guy was looking to maximize his situation, get a good rate, not take was isn’t his, there’s no mention of “I can’t afford to pay.”
June 28, 2009 at 12:44 AM #421656ParticipantI don’t get it, what do you mean by “dumping the heloc?” At this point he can’t roll it into a single loan at the lower rate, that is evident by what he wrote and the advice. The advice to pay down the heloc faster, seems good advice to me, since rolling it is out of the question.
Do you mean for him to not pay the heloc? You said they wont foreclose, the hell they wont. Helocs can and will foreclose, even if the primary loan is current. That’s the deal with helocs, it’s collateral is the house. If they choose to not foreclose because it will wipe them out after the first is paid, then they can and will rack fees and interest and credit hits while you dont pay them. This guy was looking to maximize his situation, get a good rate, not take was isn’t his, there’s no mention of “I can’t afford to pay.”
June 28, 2009 at 12:44 AM #421724ParticipantI don’t get it, what do you mean by “dumping the heloc?” At this point he can’t roll it into a single loan at the lower rate, that is evident by what he wrote and the advice. The advice to pay down the heloc faster, seems good advice to me, since rolling it is out of the question.
Do you mean for him to not pay the heloc? You said they wont foreclose, the hell they wont. Helocs can and will foreclose, even if the primary loan is current. That’s the deal with helocs, it’s collateral is the house. If they choose to not foreclose because it will wipe them out after the first is paid, then they can and will rack fees and interest and credit hits while you dont pay them. This guy was looking to maximize his situation, get a good rate, not take was isn’t his, there’s no mention of “I can’t afford to pay.”
June 28, 2009 at 12:44 AM #421885ParticipantI don’t get it, what do you mean by “dumping the heloc?” At this point he can’t roll it into a single loan at the lower rate, that is evident by what he wrote and the advice. The advice to pay down the heloc faster, seems good advice to me, since rolling it is out of the question.
Do you mean for him to not pay the heloc? You said they wont foreclose, the hell they wont. Helocs can and will foreclose, even if the primary loan is current. That’s the deal with helocs, it’s collateral is the house. If they choose to not foreclose because it will wipe them out after the first is paid, then they can and will rack fees and interest and credit hits while you dont pay them. This guy was looking to maximize his situation, get a good rate, not take was isn’t his, there’s no mention of “I can’t afford to pay.”
June 28, 2009 at 1:05 AM #421164Eugene
ParticipantBoth answers are incorrect.
The correct answer is, refinance the first while it’s still beneficial to do that (or don’t – 5% 30-year fixed is quite good to begin with). Miss a payment on HELOC, then call them, inform them that you’re upside down, inform them that they’ll be wiped in the event of a foreclosure, and offer to settle for $5,000 cash.
Of course, this answer is not suitable to be printed in a real estate tips section of The Washington Post.
June 28, 2009 at 1:05 AM #421394ParticipantBoth answers are incorrect.
The correct answer is, refinance the first while it’s still beneficial to do that (or don’t – 5% 30-year fixed is quite good to begin with). Miss a payment on HELOC, then call them, inform them that you’re upside down, inform them that they’ll be wiped in the event of a foreclosure, and offer to settle for $5,000 cash.
Of course, this answer is not suitable to be printed in a real estate tips section of The Washington Post.
June 28, 2009 at 1:05 AM #421666ParticipantBoth answers are incorrect.
The correct answer is, refinance the first while it’s still beneficial to do that (or don’t – 5% 30-year fixed is quite good to begin with). Miss a payment on HELOC, then call them, inform them that you’re upside down, inform them that they’ll be wiped in the event of a foreclosure, and offer to settle for $5,000 cash.
Of course, this answer is not suitable to be printed in a real estate tips section of The Washington Post.
June 28, 2009 at 1:05 AM #421734ParticipantBoth answers are incorrect.
The correct answer is, refinance the first while it’s still beneficial to do that (or don’t – 5% 30-year fixed is quite good to begin with). Miss a payment on HELOC, then call them, inform them that you’re upside down, inform them that they’ll be wiped in the event of a foreclosure, and offer to settle for $5,000 cash.
Of course, this answer is not suitable to be printed in a real estate tips section of The Washington Post.
June 28, 2009 at 1:05 AM #421895ParticipantBoth answers are incorrect.
The correct answer is, refinance the first while it’s still beneficial to do that (or don’t – 5% 30-year fixed is quite good to begin with). Miss a payment on HELOC, then call them, inform them that you’re upside down, inform them that they’ll be wiped in the event of a foreclosure, and offer to settle for $5,000 cash.
Of course, this answer is not suitable to be printed in a real estate tips section of The Washington Post.
June 28, 2009 at 7:22 AM #421174patb
Participant[quote=Eugene]Both answers are incorrect.
The correct answer is, refinance the first while it’s still beneficial to do that (or don’t – 5% 30-year fixed is quite good to begin with). Miss a payment on HELOC, then call them, inform them that you’re upside down, inform them that they’ll be wiped in the event of a foreclosure, and offer to settle for $5,000 cash.
Of course, this answer is not suitable to be printed in a real estate tips section of The Washington Post.[/quote]
That’s what I was aiming at.
The HELOC is utterly underwater, screw them, they have nothing.
What are they going to spend 50K on foreclosure?
Keep paying the first and ride out the wave.
or
Stop paying both, save the money and when the first comes
to foreclose string it out, and move into an apartment.It makes no sense for someone in California who is -35% on equity
to pay into a mortgage that is never going to see the surface in
our lifetimes, unless you really expect the inflation rates to explode.if we go into 100% inflation, then sure, he has a decent asset,
but, I kind of doubt that will happen.June 28, 2009 at 7:22 AM #421404Participant[quote=Eugene]Both answers are incorrect.
The correct answer is, refinance the first while it’s still beneficial to do that (or don’t – 5% 30-year fixed is quite good to begin with). Miss a payment on HELOC, then call them, inform them that you’re upside down, inform them that they’ll be wiped in the event of a foreclosure, and offer to settle for $5,000 cash.
Of course, this answer is not suitable to be printed in a real estate tips section of The Washington Post.[/quote]
That’s what I was aiming at.
The HELOC is utterly underwater, screw them, they have nothing.
What are they going to spend 50K on foreclosure?
Keep paying the first and ride out the wave.
or
Stop paying both, save the money and when the first comes
to foreclose string it out, and move into an apartment.It makes no sense for someone in California who is -35% on equity
to pay into a mortgage that is never going to see the surface in
our lifetimes, unless you really expect the inflation rates to explode.if we go into 100% inflation, then sure, he has a decent asset,
but, I kind of doubt that will happen.June 28, 2009 at 7:22 AM #421676Participant[quote=Eugene]Both answers are incorrect.
The correct answer is, refinance the first while it’s still beneficial to do that (or don’t – 5% 30-year fixed is quite good to begin with). Miss a payment on HELOC, then call them, inform them that you’re upside down, inform them that they’ll be wiped in the event of a foreclosure, and offer to settle for $5,000 cash.
Of course, this answer is not suitable to be printed in a real estate tips section of The Washington Post.[/quote]
That’s what I was aiming at.
The HELOC is utterly underwater, screw them, they have nothing.
What are they going to spend 50K on foreclosure?
Keep paying the first and ride out the wave.
or
Stop paying both, save the money and when the first comes
to foreclose string it out, and move into an apartment.It makes no sense for someone in California who is -35% on equity
to pay into a mortgage that is never going to see the surface in
our lifetimes, unless you really expect the inflation rates to explode.if we go into 100% inflation, then sure, he has a decent asset,
but, I kind of doubt that will happen.June 28, 2009 at 7:22 AM #421744Participant[quote=Eugene]Both answers are incorrect.
The correct answer is, refinance the first while it’s still beneficial to do that (or don’t – 5% 30-year fixed is quite good to begin with). Miss a payment on HELOC, then call them, inform them that you’re upside down, inform them that they’ll be wiped in the event of a foreclosure, and offer to settle for $5,000 cash.
Of course, this answer is not suitable to be printed in a real estate tips section of The Washington Post.[/quote]
That’s what I was aiming at.
The HELOC is utterly underwater, screw them, they have nothing.
What are they going to spend 50K on foreclosure?
Keep paying the first and ride out the wave.
or
Stop paying both, save the money and when the first comes
to foreclose string it out, and move into an apartment.It makes no sense for someone in California who is -35% on equity
to pay into a mortgage that is never going to see the surface in
our lifetimes, unless you really expect the inflation rates to explode.if we go into 100% inflation, then sure, he has a decent asset,
but, I kind of doubt that will happen. -
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