[beanmaestro]

Frankly, this is a brilliant idea for the underwater homedebtor.

You’ve been piling up credit card debt to pay the mortgage, and bleeding more each month. So you stop paying now (since it’s a matter of time anyway), pay off your credit cards, and save up a security deposit in the months before eviction. You clear your credit check on your new rental before the foreclosure, and know exactly when you have to move. Seems almost civilized…

[beanmaestro]

Frankly, this is a brilliant idea for the underwater homedebtor.

You’ve been piling up credit card debt to pay the mortgage, and bleeding more each month. So you stop paying now (since it’s a matter of time anyway), pay off your credit cards, and save up a security deposit in the months before eviction. You clear your credit check on your new rental before the foreclosure, and know exactly when you have to move. Seems almost civilized…

[beanmaestro]

My thinking here was that, looking at the market, I’m not sure it’ll go down, but I’m fairly sure the downside risk > upside opportunity right now. So it only makes sense to have less than 50% in stocks, and more than 50% in the buy-at-the-bottom fund. Once I realied this, it made sense to take some of the money off the table while the market is ~5% below peak.

But you’re right, having had 90-100% in stocks in the last few years, doing so is weird and uncharted territory

[beanmaestro]

You might be able to buy yourself some time and money at the same time, by taking a different approach. Show your wife the Case-Shiller numbers, and the ARM reset schedule. Notice how the price drop tends to accelerate in the fall, and this coincides with the ARM resets. So it looks pretty darn likely that prices will drop 7-10% by the end of the year, and there’s a whole lot more sellers than buyers right now.

Use this reasoning to make offers 10-15% below asking price. Tell your wife you’re offering tomorrow’s price today. If the offer is accepted, you take a lot of the financial sting out of the downside, and your wife is very happy you bought the condo AND saved $40k. If the offer is rejected, low-ball someone else a few weeks later. Time is on your side.

I’m speaking from a bit of experience here… We’ve used this approach a couple times, and the second time almost got a very nice house at an $70k discount. A “greater fool” swept in and paid 99% of list price the week before our seller was closing in Seattle. That was December, and prices are down another 5% since, while we’ve got $25k more in the down payment fund now.

[beanmaestro]

Aww, c’mon lendmjk…

First off, the forums are richer by having brokers and realtors on them, and there’s enough loud bears who will immediately and loudly object to anything they perceive as biased.

Second, there’s nothing wrong with HLS, SDR, sdr, (or for that matter) our site owner accepting business they get by offering reasonable wisdom on this site. They’re putting in time here, just like the dear Prof, and if they get good press for doing so. Besides, I’d much rather do business with someone I’ve gotten to know on this site than flip open the phone book and take my chances.

[beanmaestro]

Aww, c’mon lendmjk…

First off, the forums are richer by having brokers and realtors on them, and there’s enough loud bears who will immediately and loudly object to anything they perceive as biased.

Second, there’s nothing wrong with HLS, SDR, sdr, (or for that matter) our site owner accepting business they get by offering reasonable wisdom on this site. They’re putting in time here, just like the dear Prof, and if they get good press for doing so. Besides, I’d much rather do business with someone I’ve gotten to know on this site than flip open the phone book and take my chances.

[beanmaestro]

Aww, c’mon lendmjk…

First off, the forums are richer by having brokers and realtors on them, and there’s enough loud bears who will immediately and loudly object to anything they perceive as biased.

Second, there’s nothing wrong with HLS, SDR, sdr, (or for that matter) our site owner accepting business they get by offering reasonable wisdom on this site. They’re putting in time here, just like the dear Prof, and if they get good press for doing so. Besides, I’d much rather do business with someone I’ve gotten to know on this site than flip open the phone book and take my chances.

[beanmaestro]

I imagine foreclosure could cost him the job he has, if he were in a field with serious background checks and security issues. A downgrade in security status, clearance, etc, could prevent him from doing his job… but if he’s in a field with this sort of issue (defense industry, maybe security or banking), I imagine he’s well aware of it.

[beanmaestro]

I imagine foreclosure could cost him the job he has, if he were in a field with serious background checks and security issues. A downgrade in security status, clearance, etc, could prevent him from doing his job… but if he’s in a field with this sort of issue (defense industry, maybe security or banking), I imagine he’s well aware of it.

[beanmaestro]

I imagine foreclosure could cost him the job he has, if he were in a field with serious background checks and security issues. A downgrade in security status, clearance, etc, could prevent him from doing his job… but if he’s in a field with this sort of issue (defense industry, maybe security or banking), I imagine he’s well aware of it.

[beanmaestro]

Okay, radelow’s comment about the shoes made me scratch my head.

I’m a pretty good at leatherworking; If I’m not drowning in mortgage payments, I may well quit engineering in a decade or two and make custom leather goods as a second career. I’ve made a half-dozen pairs of custom shoes, but it takes a lot of patient handwork and practice to make a high-quality shoe. It’s not easy, and I’m definitely not there yet.

I don’t see why an American or Italian shoemaker’s products are any better than a Chinese or Mexican’s. In fact, when the product I want is sold by both, I kinda want to support the Chinese shoemaker to improve his family’s standard of living.

[beanmaestro]

Okay, radelow’s comment about the shoes made me scratch my head.

I’m a pretty good at leatherworking; If I’m not drowning in mortgage payments, I may well quit engineering in a decade or two and make custom leather goods as a second career. I’ve made a half-dozen pairs of custom shoes, but it takes a lot of patient handwork and practice to make a high-quality shoe. It’s not easy, and I’m definitely not there yet.

I don’t see why an American or Italian shoemaker’s products are any better than a Chinese or Mexican’s. In fact, when the product I want is sold by both, I kinda want to support the Chinese shoemaker to improve his family’s standard of living.

[beanmaestro]

Okay, radelow’s comment about the shoes made me scratch my head.

I’m a pretty good at leatherworking; If I’m not drowning in mortgage payments, I may well quit engineering in a decade or two and make custom leather goods as a second career. I’ve made a half-dozen pairs of custom shoes, but it takes a lot of patient handwork and practice to make a high-quality shoe. It’s not easy, and I’m definitely not there yet.

I don’t see why an American or Italian shoemaker’s products are any better than a Chinese or Mexican’s. In fact, when the product I want is sold by both, I kinda want to support the Chinese shoemaker to improve his family’s standard of living.

[beanmaestro]

Okay, but after the dust settles, and the surviving lenders rinse off, don’t you expect that there will be secondary demand for jumbo loans that are otherwise conforming?

In the short term, everyone is covering their head, but in the mid-to-long term, the secondary market should be competing for a prime jumbo loan with full docs and 20% down. And so the jumbo loans should reach a happy medium, no?

[beanmaestro]

Okay, but after the dust settles, and the surviving lenders rinse off, don’t you expect that there will be secondary demand for jumbo loans that are otherwise conforming?

In the short term, everyone is covering their head, but in the mid-to-long term, the secondary market should be competing for a prime jumbo loan with full docs and 20% down. And so the jumbo loans should reach a happy medium, no?

[Author]

Posts