What should this guy do?

[The-Shoveler]

Nor_LA-Temcu-SD-Guy

Take the 90K put it into a numbered Swiss bank account, stop paying the mortgage, Go surfing !!

Just kidding, would need to know a lot more than what has been said here, everyone’s situation is different.

Maybe shop for a new loan and use that 90K to ride it out …

It just depends.

[The-Shoveler]

Nor_LA-Temcu-SD-Guy

Take the 90K put it into a numbered Swiss bank account, stop paying the mortgage, Go surfing !!

Just kidding, would need to know a lot more than what has been said here, everyone’s situation is different.

Maybe shop for a new loan and use that 90K to ride it out …

It just depends.

[La Jolla Renter]

I think shopping the loan is out of the question. He only makes 40k and even with the best loan and 90k down he ends up with about a 580k mortgage. He still can’t afford the house.

SD Realtor… Agree in principle, he should take responsibility.

Maybe I should have phrased the question… What would you do? vs… What should this guy do?

If he walks, at least his 90k stays in the San Diego economy. If he tries to refinance, he just delays the problem and his 90k goes to Wall Street.

This is the first person I know personally in this situation. Until now, I have just read about all the f’d borrowers. It puts a bit more inevitable reality into my opinion of the San Diego housing market.

[La Jolla Renter]

I think shopping the loan is out of the question. He only makes 40k and even with the best loan and 90k down he ends up with about a 580k mortgage. He still can’t afford the house.

SD Realtor… Agree in principle, he should take responsibility.

Maybe I should have phrased the question… What would you do? vs… What should this guy do?

If he walks, at least his 90k stays in the San Diego economy. If he tries to refinance, he just delays the problem and his 90k goes to Wall Street.

This is the first person I know personally in this situation. Until now, I have just read about all the f’d borrowers. It puts a bit more inevitable reality into my opinion of the San Diego housing market.

[The-Shoveler]

Nor_LA-Temcu-SD-Guy

Answer Part A from above,

Take the 90K put it into a numbered Swiss bank account, stop paying the mortgage, Go surfing !!

Just kidding again, How old is this guy,

Will his career ever allow for advancement, Lots of stuff to consider here.

[The-Shoveler]

Nor_LA-Temcu-SD-Guy

Answer Part A from above,

Take the 90K put it into a numbered Swiss bank account, stop paying the mortgage, Go surfing !!

Just kidding again, How old is this guy,

Will his career ever allow for advancement, Lots of stuff to consider here.

[(former)FormerSanDiegan]

If the loans were purchase loans for a owner occupied property they are non-recourse loans according to CA state law. Therefore, if he defaults and the bank or loan holder forecloses, they have no right to his other assets to make themselves whole. The lenders for primary residence purchase loans in CA understand the rules, too, so they are just as culpable (unless of course there was fraud on the buyers’ part). Since the guy makes 45K there is a distinct possibility that he may have committed fraud on his application. After all the loan is over 14x his income. This would complicate this situation from a legal standpoint.

If it were me, I would take all things into consideration:
including my assets, potential income in the next few years, likelihood of the property value recovering to the purchase price, etc. I would attempt to map out a way to do the right thing and pay my debt. If, after careful analysis I realize that there is zero or low probability of being able to do so, I would investigate the other options, such as allowing foreclosure and walking away with bad credit for the next 3-7 years. I don;t think there are any refinance options for this guy.

Of course, it would appear that this person is mathematically challenged. A similar analysis of this situation prior to getting a home loan equal to about 14x his income, would have kept him out of this mess.

[(former)FormerSanDiegan]

If the loans were purchase loans for a owner occupied property they are non-recourse loans according to CA state law. Therefore, if he defaults and the bank or loan holder forecloses, they have no right to his other assets to make themselves whole. The lenders for primary residence purchase loans in CA understand the rules, too, so they are just as culpable (unless of course there was fraud on the buyers’ part). Since the guy makes 45K there is a distinct possibility that he may have committed fraud on his application. After all the loan is over 14x his income. This would complicate this situation from a legal standpoint.

If it were me, I would take all things into consideration:
including my assets, potential income in the next few years, likelihood of the property value recovering to the purchase price, etc. I would attempt to map out a way to do the right thing and pay my debt. If, after careful analysis I realize that there is zero or low probability of being able to do so, I would investigate the other options, such as allowing foreclosure and walking away with bad credit for the next 3-7 years. I don;t think there are any refinance options for this guy.

Of course, it would appear that this person is mathematically challenged. A similar analysis of this situation prior to getting a home loan equal to about 14x his income, would have kept him out of this mess.

[Ash Housewares]

He should walk away with the 90k and live with dinged credit for a few years. He won’t want to buy again for a few years anyway.

Forget about “honor” or whatever you want to call it. The banks knew they were taking a risk and they lost. They deserve to eat the loss (assuming no fraud on the application).

[Ash Housewares]

He should walk away with the 90k and live with dinged credit for a few years. He won’t want to buy again for a few years anyway.

Forget about “honor” or whatever you want to call it. The banks knew they were taking a risk and they lost. They deserve to eat the loss (assuming no fraud on the application).

[La Jolla Renter]

FormerSanDiegan,

He is self employed in the real-estate/contsruction industry and may have to switch gears. Probably not a candidate for fraud as at the time of purchase, he was doing much better.

Does a 50s self employed person have a lot of hot job prospects in San Diego?

I don’t hire former self employed entrepreneurs. They just aren’t a good fit.

[La Jolla Renter]

FormerSanDiegan,

He is self employed in the real-estate/contsruction industry and may have to switch gears. Probably not a candidate for fraud as at the time of purchase, he was doing much better.

Does a 50s self employed person have a lot of hot job prospects in San Diego?

I don’t hire former self employed entrepreneurs. They just aren’t a good fit.

[no_such_reality]

The banks knew they were taking a risk and they lost. They deserve to eat the loss (assuming no fraud on the application).

Of course, that same logic doesn’t apply to the borrower. You thinks his risk is just the credit ding.

[no_such_reality]

The banks knew they were taking a risk and they lost. They deserve to eat the loss (assuming no fraud on the application).

Of course, that same logic doesn’t apply to the borrower. You thinks his risk is just the credit ding.

[The-Shoveler]

Nor_LA-Temcu-SD-Guy

Sorry don’t have enough info in my brain to help out here,

Personaly, don’t think I would have got into this situation to begin with, If self employed I would try to pay cash or at least have sevaral lines of business to fall back on.

But good luck to him ….

[Author]

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