If you are considering a short sale

[DaCounselor]

Good thread SDR. Most of my recent posts and almost the entirety of my discussions with my 2 best lending industry contacts have related to section f. of your original post. I will be merciful and won’t rehash those posts here but simply state that the handling of the piggybacks is going to be an issue of ever-increasing visibility moving forward. The threshold question for those attempting short sales because they can’t service the debt is whether wiping out the 2nd will allow them to stay in the home.

Cavalier – no, the 2nd is not automatically recourse. If it was taken out to purchase the property or to refi a purchase money loan (with no cash out) it is non-recourse. Even if it is recourse, it has not been the custom for lenders to pursue the borrower directly. I suspect this may change moving forward due to the volume and level of losses, but you are talking about a lawsuit that will cost the lenders money and may lead to minimal if any ultimate recovery for a variety of reasons. A pennies-on-the-dollar settlement is far more likely.

[Deal Hunter]

No Such Thing as Free Enterprise. There hasn’t been a free market in the U.S. since 1917 (The birth of the Federal Reserve). True capitalism includes the checks and balaces, booms and busts of a free market. However, when things like money supply are manipulated by an outside force, the booms and busts are about as real as Spongebob Squarepants.

Moral hazard is moot. The basic truth remains that the economy is driven by consumption. Without some sort of debt relief (be it from the banks taking losses or taxpayers funding GSE mortgage insurance organizations or stimulus packages), people will not consume to the level needed for the economy to pick up speed. Money – wherever it comes from – needs to go into spending, not repayment of debt. Yet, because FICO is so important (or so we have been convinced by Suze Orman) Americans will save and pay down debt rather than continue to consume.

There can only be 2 results:
1 – The economy will flatline as Americans save up, stop spending and work to live debt free. They may even do something as nightmarish as teach their children to be debt free!

2 – FICO will go away. The next boom will flower as collateral becomes everything and as long as you can fog a mirror, you can get a loan. If credit-worthiness is putting a chokehold on consumption, the key to breaking the chokehold is in to lend on collateral-worthiness instead. If you own anything that has liquid cash value in the world, you can get a cash advance on 50% of its value. Want proof? Just look at your neighborhood pawn shop or talk to a hard money lender.

Regarding the short-term recession beast… it will get fed and get fed good. The near term solution to the “slump” will come from the new fever or cooperation between the Fed and Congress. The meal will consist of permanent tax cuts to businesses and massive tax reform for the tax base. Perhaps even a well disguised mass amnesty to increase the tax base and BUUURRRP! Recession beast is satiated and the next boom (in real estate) ensues.

[Deal Hunter]

No Such Thing as Free Enterprise. There hasn’t been a free market in the U.S. since 1917 (The birth of the Federal Reserve). True capitalism includes the checks and balaces, booms and busts of a free market. However, when things like money supply are manipulated by an outside force, the booms and busts are about as real as Spongebob Squarepants.

Moral hazard is moot. The basic truth remains that the economy is driven by consumption. Without some sort of debt relief (be it from the banks taking losses or taxpayers funding GSE mortgage insurance organizations or stimulus packages), people will not consume to the level needed for the economy to pick up speed. Money – wherever it comes from – needs to go into spending, not repayment of debt. Yet, because FICO is so important (or so we have been convinced by Suze Orman) Americans will save and pay down debt rather than continue to consume.

There can only be 2 results:
1 – The economy will flatline as Americans save up, stop spending and work to live debt free. They may even do something as nightmarish as teach their children to be debt free!

2 – FICO will go away. The next boom will flower as collateral becomes everything and as long as you can fog a mirror, you can get a loan. If credit-worthiness is putting a chokehold on consumption, the key to breaking the chokehold is in to lend on collateral-worthiness instead. If you own anything that has liquid cash value in the world, you can get a cash advance on 50% of its value. Want proof? Just look at your neighborhood pawn shop or talk to a hard money lender.

Regarding the short-term recession beast… it will get fed and get fed good. The near term solution to the “slump” will come from the new fever or cooperation between the Fed and Congress. The meal will consist of permanent tax cuts to businesses and massive tax reform for the tax base. Perhaps even a well disguised mass amnesty to increase the tax base and BUUURRRP! Recession beast is satiated and the next boom (in real estate) ensues.

[Deal Hunter]

No Such Thing as Free Enterprise. There hasn’t been a free market in the U.S. since 1917 (The birth of the Federal Reserve). True capitalism includes the checks and balaces, booms and busts of a free market. However, when things like money supply are manipulated by an outside force, the booms and busts are about as real as Spongebob Squarepants.

Moral hazard is moot. The basic truth remains that the economy is driven by consumption. Without some sort of debt relief (be it from the banks taking losses or taxpayers funding GSE mortgage insurance organizations or stimulus packages), people will not consume to the level needed for the economy to pick up speed. Money – wherever it comes from – needs to go into spending, not repayment of debt. Yet, because FICO is so important (or so we have been convinced by Suze Orman) Americans will save and pay down debt rather than continue to consume.

There can only be 2 results:
1 – The economy will flatline as Americans save up, stop spending and work to live debt free. They may even do something as nightmarish as teach their children to be debt free!

2 – FICO will go away. The next boom will flower as collateral becomes everything and as long as you can fog a mirror, you can get a loan. If credit-worthiness is putting a chokehold on consumption, the key to breaking the chokehold is in to lend on collateral-worthiness instead. If you own anything that has liquid cash value in the world, you can get a cash advance on 50% of its value. Want proof? Just look at your neighborhood pawn shop or talk to a hard money lender.

Regarding the short-term recession beast… it will get fed and get fed good. The near term solution to the “slump” will come from the new fever or cooperation between the Fed and Congress. The meal will consist of permanent tax cuts to businesses and massive tax reform for the tax base. Perhaps even a well disguised mass amnesty to increase the tax base and BUUURRRP! Recession beast is satiated and the next boom (in real estate) ensues.

[Deal Hunter]

No Such Thing as Free Enterprise. There hasn’t been a free market in the U.S. since 1917 (The birth of the Federal Reserve). True capitalism includes the checks and balaces, booms and busts of a free market. However, when things like money supply are manipulated by an outside force, the booms and busts are about as real as Spongebob Squarepants.

Moral hazard is moot. The basic truth remains that the economy is driven by consumption. Without some sort of debt relief (be it from the banks taking losses or taxpayers funding GSE mortgage insurance organizations or stimulus packages), people will not consume to the level needed for the economy to pick up speed. Money – wherever it comes from – needs to go into spending, not repayment of debt. Yet, because FICO is so important (or so we have been convinced by Suze Orman) Americans will save and pay down debt rather than continue to consume.

There can only be 2 results:
1 – The economy will flatline as Americans save up, stop spending and work to live debt free. They may even do something as nightmarish as teach their children to be debt free!

2 – FICO will go away. The next boom will flower as collateral becomes everything and as long as you can fog a mirror, you can get a loan. If credit-worthiness is putting a chokehold on consumption, the key to breaking the chokehold is in to lend on collateral-worthiness instead. If you own anything that has liquid cash value in the world, you can get a cash advance on 50% of its value. Want proof? Just look at your neighborhood pawn shop or talk to a hard money lender.

Regarding the short-term recession beast… it will get fed and get fed good. The near term solution to the “slump” will come from the new fever or cooperation between the Fed and Congress. The meal will consist of permanent tax cuts to businesses and massive tax reform for the tax base. Perhaps even a well disguised mass amnesty to increase the tax base and BUUURRRP! Recession beast is satiated and the next boom (in real estate) ensues.

[Deal Hunter]

No Such Thing as Free Enterprise. There hasn’t been a free market in the U.S. since 1917 (The birth of the Federal Reserve). True capitalism includes the checks and balaces, booms and busts of a free market. However, when things like money supply are manipulated by an outside force, the booms and busts are about as real as Spongebob Squarepants.

Moral hazard is moot. The basic truth remains that the economy is driven by consumption. Without some sort of debt relief (be it from the banks taking losses or taxpayers funding GSE mortgage insurance organizations or stimulus packages), people will not consume to the level needed for the economy to pick up speed. Money – wherever it comes from – needs to go into spending, not repayment of debt. Yet, because FICO is so important (or so we have been convinced by Suze Orman) Americans will save and pay down debt rather than continue to consume.

There can only be 2 results:
1 – The economy will flatline as Americans save up, stop spending and work to live debt free. They may even do something as nightmarish as teach their children to be debt free!

2 – FICO will go away. The next boom will flower as collateral becomes everything and as long as you can fog a mirror, you can get a loan. If credit-worthiness is putting a chokehold on consumption, the key to breaking the chokehold is in to lend on collateral-worthiness instead. If you own anything that has liquid cash value in the world, you can get a cash advance on 50% of its value. Want proof? Just look at your neighborhood pawn shop or talk to a hard money lender.

Regarding the short-term recession beast… it will get fed and get fed good. The near term solution to the “slump” will come from the new fever or cooperation between the Fed and Congress. The meal will consist of permanent tax cuts to businesses and massive tax reform for the tax base. Perhaps even a well disguised mass amnesty to increase the tax base and BUUURRRP! Recession beast is satiated and the next boom (in real estate) ensues.

[Deal Hunter]

Vegas is Different

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.

[Deal Hunter]

Vegas is Different

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.

[Deal Hunter]

Vegas is Different

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.

[Deal Hunter]

Vegas is Different

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.

[Deal Hunter]

Vegas is Different

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.

[Author]

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