Homeowner purchased in 2005 for 675k, put 5% down and has just had the mortgage reset to 8.5%. The second is about 100k with Countrywide. This owner has about a 45k income. The owner has 90k in the bank from another property that just sold. The house has horrible freeway noise. I would guess it would bring 525k today. The owner tried to negotiate a lower rate on the first and second with no luck. The owner told me he wants to walk away and rent hopefully keeping his 90k in savings.
My advice to him… stop paying your mortgage and after a few months see if Country wide will take 10 cents on the dollar and see if the first will give him a decent mortgage rate while reducing principle to the value what they would get if they foreclosed (about 450k). Yes, this is a long shot. Why suffer a slow death financially… walk with your 90k.
The professional advice they have received thus far claims that in the 90’s, banks did not chase after mortgage defaults. Also, since the second is part of the original purchase, not a home equity loan, and thus, will not receive a 1099 for loss???
So just to make sure I understand the situation… A homeowner purchased a home with a risky financing vehicle and only put 5% down. He bought it in a poor noisy location. So today his loan reset, (as he knew it would) and the home has depreciated. He has cash in the bank…
So your advice is to not take any responsibility and just bail out.
Why not ask him to insure the place to the hilt and burn it down?
So just to make sure I understand the situation… A homeowner purchased a home with a risky financing vehicle and only put 5% down. He bought it in a poor noisy location. So today his loan reset, (as he knew it would) and the home has depreciated. He has cash in the bank…
So your advice is to not take any responsibility and just bail out.
Why not ask him to insure the place to the hilt and burn it down?
Never give financial or love advice. They’ll blame you however it turns out.
If I were him I’d bail. I’ve never heard of anyone receiving a 1099-C for debt cancellation following a foreclosure because it’s not debt cancellation since he’s giving up his downpayment and his collateral.
Never give financial or love advice. They’ll blame you however it turns out.
If I were him I’d bail. I’ve never heard of anyone receiving a 1099-C for debt cancellation following a foreclosure because it’s not debt cancellation since he’s giving up his downpayment and his collateral.
So the guy wants to get out of debt, but doesn’t want to spend his own money to do so.
Where’s the personal responsibility? Doing the easy thing doesn’t make it the right thing, painful as that may be to do. The guy has reserves – IMO he should pony up.
So the guy wants to get out of debt, but doesn’t want to spend his own money to do so.
Where’s the personal responsibility? Doing the easy thing doesn’t make it the right thing, painful as that may be to do. The guy has reserves – IMO he should pony up.
With 90k in the bank and a loan owed he will probably get sued by countrywide for that money. It is time he puts that money into another account name that can’t be traced back to him. He can shop that loan around. A lot of places will give him a better deal than 8.5%. Seriously. You do know that you can shop a loan right?
With 90k in the bank and a loan owed he will probably get sued by countrywide for that money. It is time he puts that money into another account name that can’t be traced back to him. He can shop that loan around. A lot of places will give him a better deal than 8.5%. Seriously. You do know that you can shop a loan right?
Why doesn’t he refinance with another company? He could take the $90,000 and put that toward the new loan and then ride out the market. He then takes responsibility and saves his credit.
Why doesn’t he refinance with another company? He could take the $90,000 and put that toward the new loan and then ride out the market. He then takes responsibility and saves his credit.
