Somebody above stated that my friend should just sell. I think he would if he could. The problem is that all 8 properties are to various degrees under water (between 30k-100k/property). If you multiply that by 8 properties you have a negative net worth of around $400k.
I personally believe he is keeping the $150K to feed the monster and the CCs to live off.
I seriously think that he is more than your average FB.
Even a BK won’t wipe his slate clean due to the new law changes. Also, most of his properties had been refied more than once. Doesn’t that mean that these loans became full recourse loans? They now can come after him for everything he owns.
He was talking about short selling one or two of his properties, but the bank told him that he needed to be behind on his payments first. Well guess what: the minute you get behind on your house payments the CC companies will raise their interest rates to the maximum under CA law. I think it is around 22-24%. There goes the theory of living of the CCs for a while.
I think no matter which way you spin his situation it doesn’t look good.
Maybe time to seriously looking into living in Costa Rica for the foreseeable future.
