Full explanation here … this just in today from First Tuesday … it appears the prospective “strategic short-sellers” with 1st-TD loans backed by Frannie aren’t going to get too much sympathy from FICO … even after declaring a “hardship”

http://firsttuesdayjournal.com/no-sugar-from-fico-for-frannies-non-delinquent-short-sellers/

Only the prospective “strategic short-sellers” who don’t care about their FICO scores or the fact that they may not be able to get their short-paid lender(s) to report them to the credit repositories as “paid as agreed” after a successful short sale will avail themselves of this new “strategic-defaulter” criteria.

I see a few straggling baby boomers (who got caught up in payng too much in recent years) successfully take advantage of this new plan. After all, their “soon-to-be-legally-accessed-w/o-penalty” retirement accounts “won’t count” towards the “20% of assets” used to “make good” the deficiency in exchange for a “paid as agreed” mark on their credit report(s) :=]

These individuals can just turn around and pay cash for their next property so why should they care?

This new plan will enable them shed debt-overhang at the age of 60 and come out smelling like a rose :=D

[quote=UCGal]BG-
Interesting theory about folks tapping their retirement funds so credit scores be darned.

However – the reality is that the vast majority of boomers don’t have enough saved to fund their retirements, let alone have enough extra to pay cash for a house on top of providing an income stream.

Your scenario would only apply to a small number… and that number is made up of people who were aggressive savers… so likely to be more financially savvy, financially responsible… and therefore less likely to be in the short sale scenario in the first place.

Just my 2 cents.[/quote]

I think you’re probably right about it being a small number, UCGal. I’m acquainted with a couple of persons in this age category who were spurred by (younger) family members into buying during the “boom years,” against their better judgment. They’re now finding themselves underwater just as they prepare to retire.

Otherwise, in my experience, I have noticed that most boomers have done the best they can in saving for retirement and a large percentage have defined benefit plans and/or military retirement pay for life.

Unfortunately, I don’t foresee the same scenario for Gen X and Gen Y but must admit that their (overall) working conditions, pay and quality-of-life benefits far surpass anything ever offered to the boomer generation of workers, who were much more regimented and micro-managed during the business day. Most of those boomers still in the workforce voluntarily micro-manage themselves if there is no one there anymore to do it for them :=0

sdduuuude, would it be worth it to add on to your present (Clairemont) home to get the space you need? In other words, do your area values support the expense of an addition?

Or would your lot be too small to do this without adding a second story?

It just seems like this is a better idea than attempting to pay 3-4 times as much for a home (w/poss HOA/MR) than you already did years ago. Especially if you still have young kids to support. JMHO.