- This topic has 305 replies, 29 voices, and was last updated 16 years, 10 months ago by
Coronita.
-
AuthorPosts
-
February 16, 2008 at 10:05 PM #154748February 17, 2008 at 12:16 AM #154414
Deal Hunter
ParticipantReal Options, Real Consequences
DJ –
If you walk away, you’ll save money, but you’ll still be liable for the bank’s loss unless you settle it formally through a short sale or bankruptcy. If your 2nd is a credit card type of HELOC rather than a closed 2nd mortgage, they can pursue you for that debt for 20 years! If you are really lucky, the banks will discharge your obligations in the foreclosure and not go after you, but if they report their losses to the IRS for deductions, you’ll get a 1099 and your “forgiven” amount will be considered income that you will pay taxes on. Now, try and walk away from an income tax liability!ALTERNATIVE TO CONSIDER:
You can still do a short sale even if you are current and on time on your payments. You will need a REALLY REALLY good and EXPERIENCED short sale realtor. The first thing to do is write a letter to the lender explaining that you have a financial hardship and will not be able to continue paying. (Just don’t stop paying while you wait for the answer, because your credit will suffer.)If you get a short sale approval, you are off the hook for the upside down loan and as long as you never miss a payment, your credit is intact. Now go out and buy yourself a short sale! You’ll probably find a great house for a lot less right in your area. You’ll still have the advantage of ownership, rather than having to rent.
February 17, 2008 at 12:16 AM #154692ParticipantReal Options, Real Consequences
DJ –
If you walk away, you’ll save money, but you’ll still be liable for the bank’s loss unless you settle it formally through a short sale or bankruptcy. If your 2nd is a credit card type of HELOC rather than a closed 2nd mortgage, they can pursue you for that debt for 20 years! If you are really lucky, the banks will discharge your obligations in the foreclosure and not go after you, but if they report their losses to the IRS for deductions, you’ll get a 1099 and your “forgiven” amount will be considered income that you will pay taxes on. Now, try and walk away from an income tax liability!ALTERNATIVE TO CONSIDER:
You can still do a short sale even if you are current and on time on your payments. You will need a REALLY REALLY good and EXPERIENCED short sale realtor. The first thing to do is write a letter to the lender explaining that you have a financial hardship and will not be able to continue paying. (Just don’t stop paying while you wait for the answer, because your credit will suffer.)If you get a short sale approval, you are off the hook for the upside down loan and as long as you never miss a payment, your credit is intact. Now go out and buy yourself a short sale! You’ll probably find a great house for a lot less right in your area. You’ll still have the advantage of ownership, rather than having to rent.
February 17, 2008 at 12:16 AM #154703ParticipantReal Options, Real Consequences
DJ –
If you walk away, you’ll save money, but you’ll still be liable for the bank’s loss unless you settle it formally through a short sale or bankruptcy. If your 2nd is a credit card type of HELOC rather than a closed 2nd mortgage, they can pursue you for that debt for 20 years! If you are really lucky, the banks will discharge your obligations in the foreclosure and not go after you, but if they report their losses to the IRS for deductions, you’ll get a 1099 and your “forgiven” amount will be considered income that you will pay taxes on. Now, try and walk away from an income tax liability!ALTERNATIVE TO CONSIDER:
You can still do a short sale even if you are current and on time on your payments. You will need a REALLY REALLY good and EXPERIENCED short sale realtor. The first thing to do is write a letter to the lender explaining that you have a financial hardship and will not be able to continue paying. (Just don’t stop paying while you wait for the answer, because your credit will suffer.)If you get a short sale approval, you are off the hook for the upside down loan and as long as you never miss a payment, your credit is intact. Now go out and buy yourself a short sale! You’ll probably find a great house for a lot less right in your area. You’ll still have the advantage of ownership, rather than having to rent.
February 17, 2008 at 12:16 AM #154715ParticipantReal Options, Real Consequences
DJ –
If you walk away, you’ll save money, but you’ll still be liable for the bank’s loss unless you settle it formally through a short sale or bankruptcy. If your 2nd is a credit card type of HELOC rather than a closed 2nd mortgage, they can pursue you for that debt for 20 years! If you are really lucky, the banks will discharge your obligations in the foreclosure and not go after you, but if they report their losses to the IRS for deductions, you’ll get a 1099 and your “forgiven” amount will be considered income that you will pay taxes on. Now, try and walk away from an income tax liability!ALTERNATIVE TO CONSIDER:
You can still do a short sale even if you are current and on time on your payments. You will need a REALLY REALLY good and EXPERIENCED short sale realtor. The first thing to do is write a letter to the lender explaining that you have a financial hardship and will not be able to continue paying. (Just don’t stop paying while you wait for the answer, because your credit will suffer.)If you get a short sale approval, you are off the hook for the upside down loan and as long as you never miss a payment, your credit is intact. Now go out and buy yourself a short sale! You’ll probably find a great house for a lot less right in your area. You’ll still have the advantage of ownership, rather than having to rent.
February 17, 2008 at 12:16 AM #154794ParticipantReal Options, Real Consequences
DJ –
If you walk away, you’ll save money, but you’ll still be liable for the bank’s loss unless you settle it formally through a short sale or bankruptcy. If your 2nd is a credit card type of HELOC rather than a closed 2nd mortgage, they can pursue you for that debt for 20 years! If you are really lucky, the banks will discharge your obligations in the foreclosure and not go after you, but if they report their losses to the IRS for deductions, you’ll get a 1099 and your “forgiven” amount will be considered income that you will pay taxes on. Now, try and walk away from an income tax liability!ALTERNATIVE TO CONSIDER:
You can still do a short sale even if you are current and on time on your payments. You will need a REALLY REALLY good and EXPERIENCED short sale realtor. The first thing to do is write a letter to the lender explaining that you have a financial hardship and will not be able to continue paying. (Just don’t stop paying while you wait for the answer, because your credit will suffer.)If you get a short sale approval, you are off the hook for the upside down loan and as long as you never miss a payment, your credit is intact. Now go out and buy yourself a short sale! You’ll probably find a great house for a lot less right in your area. You’ll still have the advantage of ownership, rather than having to rent.
February 17, 2008 at 7:24 AM #154457Running Bear
ParticipantDJ,
I tried to scan the posts to see if the question was raised, how much credit card debt are you exposed to right now? The reason I ask is if you do move forward and walk away you need to be prepared for the interest on your credit cards to go through the roof. Right now the credit card companies are just looking for an excuse to raise rates on people. If you are floating a bunch of debt on credit cards this could be very painful. For the record I am in the camp to look after your own best interest. The housing market has more room to fall and you won’t see the price you paid for it for many years to come. All of the mechanisms allowing people like yourself to buy a home of that value are gone. Make sure you talk to your accountant/lawyer to see what impacts this will have on your current situation. That should be the first thing you do.
My2cents
February 17, 2008 at 7:24 AM #154732ParticipantDJ,
I tried to scan the posts to see if the question was raised, how much credit card debt are you exposed to right now? The reason I ask is if you do move forward and walk away you need to be prepared for the interest on your credit cards to go through the roof. Right now the credit card companies are just looking for an excuse to raise rates on people. If you are floating a bunch of debt on credit cards this could be very painful. For the record I am in the camp to look after your own best interest. The housing market has more room to fall and you won’t see the price you paid for it for many years to come. All of the mechanisms allowing people like yourself to buy a home of that value are gone. Make sure you talk to your accountant/lawyer to see what impacts this will have on your current situation. That should be the first thing you do.
My2cents
February 17, 2008 at 7:24 AM #154744ParticipantDJ,
I tried to scan the posts to see if the question was raised, how much credit card debt are you exposed to right now? The reason I ask is if you do move forward and walk away you need to be prepared for the interest on your credit cards to go through the roof. Right now the credit card companies are just looking for an excuse to raise rates on people. If you are floating a bunch of debt on credit cards this could be very painful. For the record I am in the camp to look after your own best interest. The housing market has more room to fall and you won’t see the price you paid for it for many years to come. All of the mechanisms allowing people like yourself to buy a home of that value are gone. Make sure you talk to your accountant/lawyer to see what impacts this will have on your current situation. That should be the first thing you do.
My2cents
February 17, 2008 at 7:24 AM #154755ParticipantDJ,
I tried to scan the posts to see if the question was raised, how much credit card debt are you exposed to right now? The reason I ask is if you do move forward and walk away you need to be prepared for the interest on your credit cards to go through the roof. Right now the credit card companies are just looking for an excuse to raise rates on people. If you are floating a bunch of debt on credit cards this could be very painful. For the record I am in the camp to look after your own best interest. The housing market has more room to fall and you won’t see the price you paid for it for many years to come. All of the mechanisms allowing people like yourself to buy a home of that value are gone. Make sure you talk to your accountant/lawyer to see what impacts this will have on your current situation. That should be the first thing you do.
My2cents
February 17, 2008 at 7:24 AM #154834ParticipantDJ,
I tried to scan the posts to see if the question was raised, how much credit card debt are you exposed to right now? The reason I ask is if you do move forward and walk away you need to be prepared for the interest on your credit cards to go through the roof. Right now the credit card companies are just looking for an excuse to raise rates on people. If you are floating a bunch of debt on credit cards this could be very painful. For the record I am in the camp to look after your own best interest. The housing market has more room to fall and you won’t see the price you paid for it for many years to come. All of the mechanisms allowing people like yourself to buy a home of that value are gone. Make sure you talk to your accountant/lawyer to see what impacts this will have on your current situation. That should be the first thing you do.
My2cents
February 17, 2008 at 9:27 AM #154467DJNinSD
ParticipantDealhunter, the 2nd I have is a HELOC – I wasn’t aware that that debt wouldn’t be handled like the 1st with a foreclosure. Running Bear, I do have one visa card with a balance of $11,000 and it is currently at 0% on one of those 6 month promotional rates. I would think so long as I stay current on those payments they would not be able to raise the interest rate? I am considering the implications of losing the tax writeoff – roughly, I would have to pay $700 a month more in taxes.
It’s nice to know that there are some people in my camp! 🙂
February 17, 2008 at 9:27 AM #154742ParticipantDealhunter, the 2nd I have is a HELOC – I wasn’t aware that that debt wouldn’t be handled like the 1st with a foreclosure. Running Bear, I do have one visa card with a balance of $11,000 and it is currently at 0% on one of those 6 month promotional rates. I would think so long as I stay current on those payments they would not be able to raise the interest rate? I am considering the implications of losing the tax writeoff – roughly, I would have to pay $700 a month more in taxes.
It’s nice to know that there are some people in my camp! 🙂
February 17, 2008 at 9:27 AM #154753ParticipantDealhunter, the 2nd I have is a HELOC – I wasn’t aware that that debt wouldn’t be handled like the 1st with a foreclosure. Running Bear, I do have one visa card with a balance of $11,000 and it is currently at 0% on one of those 6 month promotional rates. I would think so long as I stay current on those payments they would not be able to raise the interest rate? I am considering the implications of losing the tax writeoff – roughly, I would have to pay $700 a month more in taxes.
It’s nice to know that there are some people in my camp! 🙂
February 17, 2008 at 9:27 AM #154765ParticipantDealhunter, the 2nd I have is a HELOC – I wasn’t aware that that debt wouldn’t be handled like the 1st with a foreclosure. Running Bear, I do have one visa card with a balance of $11,000 and it is currently at 0% on one of those 6 month promotional rates. I would think so long as I stay current on those payments they would not be able to raise the interest rate? I am considering the implications of losing the tax writeoff – roughly, I would have to pay $700 a month more in taxes.
It’s nice to know that there are some people in my camp! 🙂
-
AuthorPosts
- You must be logged in to reply to this topic.