10 Million Homeowners Have Incentives to Walk

[temeculaguy]

peter, hopefully your plan was tounge and cheek, that is not a path that a piggy would take. We can all do that, we can also all rob a bank, we can swindle old ladies, but we don’t. We are proud economic geeks who enjoy playing and winning the game in a way that we can look at ourselves in the mirror or our children in the eyes and be proud. We consoled each other while we rented or stayed in small homes, refusing the toxic mortgages, knowing affordability would return and in the end, our pride in our home will be greater than the neg am zero down borrower, because anything good requires sacrifice to enjoy.

O.K. I’m off my soapbox

I did hear today from a lender that fannie/freddie/fha and others are onto the scam of buying a new home at todays prices under the premise that you rent out the current upside down house and then after moving, letting the upside down house go, with a low and protected interest rate on the new house and no need for a good credt score anymore. Supposedly they are denying the loans en masse when it involves renting out the current home unless there is equity in it.

Also, there is no way to get the wife “at arms length” even if the house and loan is only in one spouse’s name, community property and community credit. You could divorce her on paper then go into default as an individual but my guess is that few women will agree to a paper divorce to preserve credit because they will suspect you are just looking for an easy divorce with no court battle or alimony. Since alimony can never be renegotiated after the ink is dry (child support can but not alimony or asset division) I imagine there will be a few news stories of one spouse duping the other and you won’t see this happen very much after that. Come to think of it, it is kinda ingenious.

[peterb]

My comments are very much meant to be a joke. But, when the crap really hits the fan for people, they need to protect their families. Full stop.
This is going to get very ugly and creativity will be the only solution for many people. But they need to take action or at least start considering all their options. This is the worst economic disaster to hit the planet in 70 years and I hardly hear anyone talking about a strategy to protect themselves from fall-out. It’s mostly about justifying how to buy a house. I guess this is how people have to learn….by experience.

[peterb]

My comments are very much meant to be a joke. But, when the crap really hits the fan for people, they need to protect their families. Full stop.
This is going to get very ugly and creativity will be the only solution for many people. But they need to take action or at least start considering all their options. This is the worst economic disaster to hit the planet in 70 years and I hardly hear anyone talking about a strategy to protect themselves from fall-out. It’s mostly about justifying how to buy a house. I guess this is how people have to learn….by experience.

[peterb]

My comments are very much meant to be a joke. But, when the crap really hits the fan for people, they need to protect their families. Full stop.
This is going to get very ugly and creativity will be the only solution for many people. But they need to take action or at least start considering all their options. This is the worst economic disaster to hit the planet in 70 years and I hardly hear anyone talking about a strategy to protect themselves from fall-out. It’s mostly about justifying how to buy a house. I guess this is how people have to learn….by experience.

[peterb]

My comments are very much meant to be a joke. But, when the crap really hits the fan for people, they need to protect their families. Full stop.
This is going to get very ugly and creativity will be the only solution for many people. But they need to take action or at least start considering all their options. This is the worst economic disaster to hit the planet in 70 years and I hardly hear anyone talking about a strategy to protect themselves from fall-out. It’s mostly about justifying how to buy a house. I guess this is how people have to learn….by experience.

[peterb]

My comments are very much meant to be a joke. But, when the crap really hits the fan for people, they need to protect their families. Full stop.
This is going to get very ugly and creativity will be the only solution for many people. But they need to take action or at least start considering all their options. This is the worst economic disaster to hit the planet in 70 years and I hardly hear anyone talking about a strategy to protect themselves from fall-out. It’s mostly about justifying how to buy a house. I guess this is how people have to learn….by experience.

[patientlywaiting]

[quote=temeculaguy]
Also, there is no way to get the wife “at arms length” even if the house and loan is only in one spouse’s name, community property and community credit. You could divorce her on paper then go into default as an individual but my guess is that few women will agree to a paper divorce to preserve credit because they will suspect you are just looking for an easy divorce with no court battle or alimony. Since alimony can never be renegotiated after the ink is dry (child support can but not alimony or asset division) I imagine there will be a few news stories of one spouse duping the other and you won’t see this happen very much after that. Come to think of it, it is kinda ingenious. [/quote]

Come to think of it, that might be good advice for that divorcing couple of the other thread 😉

I agree with Peter, it’s not what people do at the individual level, it’s what upside-down homeowners will do on the aggregate will count. They will create their own bailouts.

[patientlywaiting]

[quote=temeculaguy]
Also, there is no way to get the wife “at arms length” even if the house and loan is only in one spouse’s name, community property and community credit. You could divorce her on paper then go into default as an individual but my guess is that few women will agree to a paper divorce to preserve credit because they will suspect you are just looking for an easy divorce with no court battle or alimony. Since alimony can never be renegotiated after the ink is dry (child support can but not alimony or asset division) I imagine there will be a few news stories of one spouse duping the other and you won’t see this happen very much after that. Come to think of it, it is kinda ingenious. [/quote]

Come to think of it, that might be good advice for that divorcing couple of the other thread 😉

I agree with Peter, it’s not what people do at the individual level, it’s what upside-down homeowners will do on the aggregate will count. They will create their own bailouts.

[patientlywaiting]

[quote=temeculaguy]
Also, there is no way to get the wife “at arms length” even if the house and loan is only in one spouse’s name, community property and community credit. You could divorce her on paper then go into default as an individual but my guess is that few women will agree to a paper divorce to preserve credit because they will suspect you are just looking for an easy divorce with no court battle or alimony. Since alimony can never be renegotiated after the ink is dry (child support can but not alimony or asset division) I imagine there will be a few news stories of one spouse duping the other and you won’t see this happen very much after that. Come to think of it, it is kinda ingenious. [/quote]

Come to think of it, that might be good advice for that divorcing couple of the other thread 😉

I agree with Peter, it’s not what people do at the individual level, it’s what upside-down homeowners will do on the aggregate will count. They will create their own bailouts.

[patientlywaiting]

[quote=temeculaguy]
Also, there is no way to get the wife “at arms length” even if the house and loan is only in one spouse’s name, community property and community credit. You could divorce her on paper then go into default as an individual but my guess is that few women will agree to a paper divorce to preserve credit because they will suspect you are just looking for an easy divorce with no court battle or alimony. Since alimony can never be renegotiated after the ink is dry (child support can but not alimony or asset division) I imagine there will be a few news stories of one spouse duping the other and you won’t see this happen very much after that. Come to think of it, it is kinda ingenious. [/quote]

Come to think of it, that might be good advice for that divorcing couple of the other thread 😉

I agree with Peter, it’s not what people do at the individual level, it’s what upside-down homeowners will do on the aggregate will count. They will create their own bailouts.

[patientlywaiting]

[quote=temeculaguy]
Also, there is no way to get the wife “at arms length” even if the house and loan is only in one spouse’s name, community property and community credit. You could divorce her on paper then go into default as an individual but my guess is that few women will agree to a paper divorce to preserve credit because they will suspect you are just looking for an easy divorce with no court battle or alimony. Since alimony can never be renegotiated after the ink is dry (child support can but not alimony or asset division) I imagine there will be a few news stories of one spouse duping the other and you won’t see this happen very much after that. Come to think of it, it is kinda ingenious. [/quote]

Come to think of it, that might be good advice for that divorcing couple of the other thread 😉

I agree with Peter, it’s not what people do at the individual level, it’s what upside-down homeowners will do on the aggregate will count. They will create their own bailouts.

[gn]

Temecula guy wrote:

I did hear today from a lender that fannie/freddie/fha and others are onto the scam of buying a new home at todays prices under the premise that you rent out the current upside down house and then after moving, letting the upside down house go, with a low and protected interest rate on the new house and no need for a good credt score anymore. Supposedly they are denying the loans en masse when it involves renting out the current home unless there is equity in it.

TG, what about the following scenario: A person has a primary residence (that has negative equity), he then tries to buy another house as an investment property. He is willing to put down 30% & pay the higher interest rate that comes with investment properties. How do lenders treat these cases ?

[gn]

Temecula guy wrote:

I did hear today from a lender that fannie/freddie/fha and others are onto the scam of buying a new home at todays prices under the premise that you rent out the current upside down house and then after moving, letting the upside down house go, with a low and protected interest rate on the new house and no need for a good credt score anymore. Supposedly they are denying the loans en masse when it involves renting out the current home unless there is equity in it.

TG, what about the following scenario: A person has a primary residence (that has negative equity), he then tries to buy another house as an investment property. He is willing to put down 30% & pay the higher interest rate that comes with investment properties. How do lenders treat these cases ?

[gn]

Temecula guy wrote:

I did hear today from a lender that fannie/freddie/fha and others are onto the scam of buying a new home at todays prices under the premise that you rent out the current upside down house and then after moving, letting the upside down house go, with a low and protected interest rate on the new house and no need for a good credt score anymore. Supposedly they are denying the loans en masse when it involves renting out the current home unless there is equity in it.

TG, what about the following scenario: A person has a primary residence (that has negative equity), he then tries to buy another house as an investment property. He is willing to put down 30% & pay the higher interest rate that comes with investment properties. How do lenders treat these cases ?

[gn]

Temecula guy wrote:

I did hear today from a lender that fannie/freddie/fha and others are onto the scam of buying a new home at todays prices under the premise that you rent out the current upside down house and then after moving, letting the upside down house go, with a low and protected interest rate on the new house and no need for a good credt score anymore. Supposedly they are denying the loans en masse when it involves renting out the current home unless there is equity in it.

TG, what about the following scenario: A person has a primary residence (that has negative equity), he then tries to buy another house as an investment property. He is willing to put down 30% & pay the higher interest rate that comes with investment properties. How do lenders treat these cases ?

[Author]

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