Patient renter – I just want to clarify the cases in Las Vegas I posted about. These 3 homeowners were all in the real estate industry. 2 were mortgage lenders that got the boot when their company went bust and one was an employee of a new home builder that also got laid off.
These people had legitimate hardship cases. It just so happened that we executed the short sales before their cash savings ran out from trying to keep up with payments that had adjusted in conjunction with upside down loans.
On the flip side of the short sale, a new homeowner was able to get into a property at 20-30% off the market today and almost 50% off the market from the same time last year. I don’t see any bail out in these three situations, unless the banks that approved the short sale are going to get a rebate from taxes on the debt they ate. In addition, the property went back into play in the economy as it now anchors a new loan with a new borrower.
I think this is a rare situation because of Las Vegas’ booming economy. We have population growth and continued stimulus from tourism (up nowadays from bargain seeking international visitors taking advantage of the dead U.S. Dollar).
I don’t endorse “faking” a hardship just to get out from under an upside down loan. However, I also don’t feel I’ve the right to scold people for walking away from a situation where the upside down mortgage is sinking them and their family.
