Houses still used as ATM

[HLS]

[quote=Blogstar][quote=HLS]I’m well aware of what goes on[/quote]

If you are responding to me [/quote]

Nothing to do with your post Blog. Read the OP.

I am licensed for both real estate & mortgage and well aware of what some others do OR try to do.

[HLS]

[quote=ltsdd]It’s conceivable for someone to buy a house, say in 2002 for $500K with 0% down. House value goes up to $1m in 2007. Refi with 125% cash out. Stash the roughly $700K that they cashed out somewhere. Filed for bankruptcy. Heck, they don’t even have to wait for the bk record to go away. That’s plenty of cash to perhaps scoop up a similar house during the downturn. Now, 7 years later, bk record went away – continue to step two (refi cash out)….[/quote]

Uh-Huh….and how many people do you personally know who did this ?

[NotCranky]

[quote=HLS][quote=Blogstar][quote=HLS]I’m well aware of what goes on[/quote]

If you are responding to me [/quote]

Nothing to do with your post Blog. Read the OP.

I am licensed for both real estate & mortgage and well aware of what some others do OR try to do.[/quote]

Can you give some stories and examples of what people did and tried to do? What worked , how often, what didn’t?

[ltsddd]

[quote=HLS][quote=ltsdd]It’s conceivable for someone to buy a house, say in 2002 for $500K with 0% down. House value goes up to $1m in 2007. Refi with 125% cash out. Stash the roughly $700K that they cashed out somewhere. Filed for bankruptcy. Heck, they don’t even have to wait for the bk record to go away. That’s plenty of cash to perhaps scoop up a similar house during the downturn. Now, 7 years later, bk record went away – continue to step two (refi cash out)….[/quote]

Uh-Huh….and how many people do you personally know who did this ?[/quote]

Would you think it would be possible if it’s “the last 7 or 8 or 9 years” instead of “the last 6 years”? Would you care to share why you think such a scenario is not possible?

[enron_by_the_sea]

[quote=scaredyclassic]

you will die of asphyxiation.

http://www.cnn.com/2014/06/19/opinion/waldman-cheney-iraq/index.html?hpt=hp_t2

exhibit 1. dick cheney blaming the fucked up situation in iraq on obama. look i ahve been dutifully praying the the dark Lord Satan every night for dick cheney to die some miserable horrible death, quickly, swiftly, adn to rot in hell for all eternity, but what does he gt? an oped page in the ny times …hilarious! the key is to be utterly shameless, utterly nonconservative, just completely batshit crazy, and the system will reward you. anyone else must be punished.

die dick cheney. please satan, have him suffer a stroke and be trapped consciously for years in his body.[/quote]

I think Dick Cheney’s opinions on Iraq are very useful!

We should listen to what he says and recommends … then do exactly opposite of that!

[HLS]

[quote=ltsdd]

Would you think it would be possible if it’s “the last 7 or 8 or 9 years” instead of “the last 6 years”? Would you care to share why you think such a scenario is not possible?[/quote]

Because I deal with loans, lenders, guidelines, regulations & underwriters on a daily basis and don’t just make up scenarios based on what I think I know.

It makes for creative writing and the possibility of developing a movie ‘based on a true story’ though….

Nobody was getting a new loan for a few years after a bankruptcy, foreclosure or short sale.
Certain programs have loosened up a bit if hardship in the past can be well documented.
Credit scores were affected and are a factor in getting a new loan.

Although not impossible, there were some creative things happening on both sides of the fence…
BUT to assume that this was widespread because of stories in the media and internet is silly.

Based on the OP, it was not implied that ‘these people’ ever had any cash as you suggest, but all done with borrowed money.

[ltsddd]

[quote=HLS][quote=ltsdd]

Would you think it would be possible if it’s “the last 7 or 8 or 9 years” instead of “the last 6 years”? Would you care to share why you think such a scenario is not possible?[/quote]

Because I deal with loans, lenders, guidelines, regulations & underwriters on a daily basis and don’t just make up scenarios based on what I think I know.
[/quote]

I am tracking you. I think it’s you who wrote

“but I don’t see how it’s possible for anyone who had “a bankruptcy AND foreclosure” in the last 6 years to have bought another house since then AND have enough equity to do a cash out refi recently”

I don’t think the OP said anything about how long it’s been since the “4” filed for bk & was foreclosed for. You and you alone came up with the bk & foreclosure in the last 6 years scenario.

[quote=HLS]
It makes for creative writing and the possibility of developing a movie ‘based on a true story’ though….
[/quote]

Nah…it makes for a lame strawman argument.

[quote=HLS]
Nobody was getting a new loan for a few years after a bankruptcy, foreclosure or short sale.
[/quote]

That’s a pretty broad statement there. But I trust that that’s your experience so it must be true.

But what is a few years? 1, 2, 5,7, 20? It must be something more than two right?

Here’s an anecdote – I know of 1 person, who is a veteran, that went through a short sale in 2010. After 2+ years he jumped back into the housing market. After going through some form of “counseling” he got the (VA) loan approved. I I guess you’ve never heard about VA loans.

[quote=HLS]BUT to assume that this was widespread because of stories in the media and internet is silly.[/quote]

hmm..you might want to read the thread again. I don’t remember seeing anyone making a claim that this is something that is widespread. You are just making up stuff and arguing against them and try to attribute that to other posters.

[Jazzman]

[quote=SDowner]
No one seems to have learnt any lesson and using their homes as ATM. I feel I am just being punished for being prudent. Saving instead of spending and getting very little in return. Am I the only one?[/quote]

No, you are not the only one, just a part of a mostly silent minority.

[HLS]

LTS.
The OP stated “they all declared bankruptcy and foreclosed on their homes during the bubble aftermath”
My mistake for assuming that was within the last 6 years.

For a new loan:
Conventional guidelines are currently 7 years after foreclosure AND a decent credit score.
FHA is 3 years with a possible exception.
VA is generally 2 yrs.

There certainly may be other programs available,
It’s just not the norm to have this happen and I’m not sure what ‘stuff’ you think I’m making up.
Your insight is apparently better than mine.

[FlyerInHi]

[quote=enron_by_the_sea][quote=scaredyclassic]

you will die of asphyxiation.

http://www.cnn.com/2014/06/19/opinion/waldman-cheney-iraq/index.html?hpt=hp_t2

exhibit 1. dick cheney blaming the fucked up situation in iraq on obama. look i ahve been dutifully praying the the dark Lord Satan every night for dick cheney to die some miserable horrible death, quickly, swiftly, adn to rot in hell for all eternity, but what does he gt? an oped page in the ny times …hilarious! the key is to be utterly shameless, utterly nonconservative, just completely batshit crazy, and the system will reward you. anyone else must be punished.

die dick cheney. please satan, have him suffer a stroke and be trapped consciously for years in his body.[/quote]

I think Dick Cheney’s opinions on Iraq are very useful!

We should listen to what he says and recommends … then do exactly opposite of that![/quote]

Cheney can live.

I just thank God that McCain Palin are not in power. We’d have 1 million men in Iraq now.

If God made that compromise, then I’m OK with it.

[FlyerInHi]

Actually, savers should be happy there is debt fueled consumption. The pie is larger for everyone so it’s easier to earn money.

Just don’t keep your savings in cash.

[bearishgurl]

[quote=ltsdd][quote=HLS][quote=ltsdd]It’s conceivable for someone to buy a house, say in 2002 for $500K with 0% down. House value goes up to $1m in 2007. Refi with 125% cash out. Stash the roughly $700K that they cashed out somewhere. Filed for bankruptcy. Heck, they don’t even have to wait for the bk record to go away. That’s plenty of cash to perhaps scoop up a similar house during the downturn. Now, 7 years later, bk record went away – continue to step two (refi cash out)….[/quote]

Uh-Huh….and how many people do you personally know who did this ?[/quote]

Would you think it would be possible if it’s “the last 7 or 8 or 9 years” instead of “the last 6 years”? Would you care to share why you think such a scenario is not possible?[/quote]

ltsdd, I’ll share with you why I think your scenario wasn’t possible. In the 2001-2002 era, the only “zero down” mortgages available were VA loans. And at that time, the VA had a $359,650 loan limit for 1-4 units. That $700K “mattress money” you’re talking about here was likely borrowed at an exorbitant interest rate, since it was a 125% LTV loan in an era of rampant “fog-a-mirror,” get-a-loan” financing. Do you actually believe a loan for $1.2M taken out in 2007 is still sustainable (irrespective of the borrowers actual monthly incomes)? What would you surmise has happened to this loan by now? Do you actually think these borrowers were ever able to refinance this loan beginning in 2007 (within months of taking it out)? How about in 2009? How about when it invariably got “recast” and its monthly payments “adjusted” in 2012 to capture all that missing principal and interest for 5 years (assuming those borrowers hadn’t lost the property to FC by then)? Assuming arguendo that they did indeed mattress the money instead of blow all or most of it (doubtful) and spent it on lower-cost properties, they would have had to pay all cash for those properties since they were supposedly “bankrupt” and grossly “overmortgaged” as well. So that cash is tied up in these “lesser” propertie(s) and perhaps they held back some of the $700K to keep making payments on their (formerly $1.2M) albatross.

What do you suggest these borrowers tell their BK trustee as to what they did with $700K that they just borrowed when they refied “cash out” at 125% LTV on their home? How are they going to get their BK case discharged if they have the cash to pay their bills? Moreover, how are they going to get a BK judge to let them keep their “automatic stay” from foreclosure on this $1.2M home that they are underwater on that they want to “reaffirm.” If they are keeping up exorbitant payments on this home when it is underwater with all or part of the $700K they took out of it, do you think a BK court will let them keep the luxury home whilst stiffing the rest of their creditors when they own lesser properties to move into? Did it occur to you that as BK Chapter 7 filers, they could be forced to sell one or more of their free and clear properties to pay creditors?

I’ve seen this kind of stuff before, including 4 Chapter 7 filings one after another in 28 years (the 29th year being 2004 where same debtors began borrowing on their house (purch ~1982) for a total of 4 times (until early 2007) instead of filing another Chapter 7. Said borrowers are in their late 60’s today. Why don’t you take a stab at what their current “net worth” is?

My (educated) guess is that your scenario as described was a monopoly game that very quickly went south and these people have absolutely nothing to show for it today, except perhaps 1-2 steady jobs if neither one got sick, got too old or otherwise lost their job in the ensuing years.

[FlyerInHi]

[quote=spdrun]
Crunchy hippie girls who wear comfortable shoes for the win. She’d want a Prius and a bungalow in North-Park. I think you could live with such an arrangement, no?

Or just look in mid-40s. Past child bearing age, not quite at the Maude stage.[/quote]

I like modern sophisticate with earthy crunchy values. hard to find.

I just can’t deal with any india/Nepal type hippie influence. The clothing, the food… not for me.

[SDowner]

Yes, all the 4 households were VA loans that foreclosed. Their repurchase was VA too, they are refinancing it. I do not qualify for VA or FHA loans, bought my primary property with > 33% down on a jumbo loan at a low interest rate and having to listen to these VA loan folks discuss a down payment of $1500.

Now tell me that I shouldn’t be envious/frustrated/pissed off royally

[FlyerInHi]

Our heroes have earned their VA benefits.

[Author]

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