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Daniel
ParticipantOh, Josh, come on… Raise taxes? Lower spending? Don’t go into politics, coz you’re not getting my vote, buddy. I only vote for politicians who lower my taxes (the lower the better) and also give me good schools, nice roads, and a good amount of pork.
What are you saying? Not possible anymore? End of the rope? Well, now you’re certainly not getting my vote. I want my pony and I want it now!
ParticipantOh, Josh, come on… Raise taxes? Lower spending? Don’t go into politics, coz you’re not getting my vote, buddy. I only vote for politicians who lower my taxes (the lower the better) and also give me good schools, nice roads, and a good amount of pork.
What are you saying? Not possible anymore? End of the rope? Well, now you’re certainly not getting my vote. I want my pony and I want it now!
ParticipantOh, Josh, come on… Raise taxes? Lower spending? Don’t go into politics, coz you’re not getting my vote, buddy. I only vote for politicians who lower my taxes (the lower the better) and also give me good schools, nice roads, and a good amount of pork.
What are you saying? Not possible anymore? End of the rope? Well, now you’re certainly not getting my vote. I want my pony and I want it now!
ParticipantQuite a bit of misinformation on this thread… So, to set the record straight:
1. Investors ALREADY HAVE the option of reducing (“cramming down”) mortgages by filing bankruptcy. Any debt (commercial loans, credit cards, non-owner occupied mortgages, etc) can be crammed down in bankruptcy, WITH THE EXCEPTION OF PRIMARY RESIDENCE MORTGAGES. If you believe this is weird, yes it is. Why don’t investors take advantage of this? Because it’s no fun. Foreclosure beats bankruptcy by a mile. In foreclosure you just lose the house (which is an investment anyways). In bankruptcy you lose the right to everything. The judge decides what assets you can keep, how much of your debts you must repay, etc. Definitely not fun.
2. What is a “cram down”? Say you owe $600K on a $400K house. Say you also have $30K in credit card debt. Well, the judge decides that only $400K is a “secured mortgage”, and the rest ($200K) is unsecured debt, just like the $30K credit card debt. If the judge decides that the new $400K mortgage is within your budget, then you can keep the house. Also, if the judge decides that you can still afford to pay a portion of the $230K total unsecured debt, then you must do that as well. Realistically speaking, the unsecured debt is rarely paid back; if you could afford to pay it back, you wouldn’t have declared bankruptcy in the first place. Again, bankruptcy is not a fun option, and foreclosure is usually the way to go.
3. Then, who could possibly take advantage of this? Answer: people in dire straits but who desperately want to keep their house. Not walk-aways, not flippers, not investors. People willing to go through the hell of bankruptcy to keep their house, and who could barely hang on by the skin of their teeth if their mortgage was crammed down.
In contrast, people who couldn’t afford even a crammed down mortgage would lose the house anyways. At the other end, people who could afford to pay more wouldn’t benefit either, as the judge would most likely ask them to pay the unsecured note as well.
ParticipantQuite a bit of misinformation on this thread… So, to set the record straight:
1. Investors ALREADY HAVE the option of reducing (“cramming down”) mortgages by filing bankruptcy. Any debt (commercial loans, credit cards, non-owner occupied mortgages, etc) can be crammed down in bankruptcy, WITH THE EXCEPTION OF PRIMARY RESIDENCE MORTGAGES. If you believe this is weird, yes it is. Why don’t investors take advantage of this? Because it’s no fun. Foreclosure beats bankruptcy by a mile. In foreclosure you just lose the house (which is an investment anyways). In bankruptcy you lose the right to everything. The judge decides what assets you can keep, how much of your debts you must repay, etc. Definitely not fun.
2. What is a “cram down”? Say you owe $600K on a $400K house. Say you also have $30K in credit card debt. Well, the judge decides that only $400K is a “secured mortgage”, and the rest ($200K) is unsecured debt, just like the $30K credit card debt. If the judge decides that the new $400K mortgage is within your budget, then you can keep the house. Also, if the judge decides that you can still afford to pay a portion of the $230K total unsecured debt, then you must do that as well. Realistically speaking, the unsecured debt is rarely paid back; if you could afford to pay it back, you wouldn’t have declared bankruptcy in the first place. Again, bankruptcy is not a fun option, and foreclosure is usually the way to go.
3. Then, who could possibly take advantage of this? Answer: people in dire straits but who desperately want to keep their house. Not walk-aways, not flippers, not investors. People willing to go through the hell of bankruptcy to keep their house, and who could barely hang on by the skin of their teeth if their mortgage was crammed down.
In contrast, people who couldn’t afford even a crammed down mortgage would lose the house anyways. At the other end, people who could afford to pay more wouldn’t benefit either, as the judge would most likely ask them to pay the unsecured note as well.
ParticipantQuite a bit of misinformation on this thread… So, to set the record straight:
1. Investors ALREADY HAVE the option of reducing (“cramming down”) mortgages by filing bankruptcy. Any debt (commercial loans, credit cards, non-owner occupied mortgages, etc) can be crammed down in bankruptcy, WITH THE EXCEPTION OF PRIMARY RESIDENCE MORTGAGES. If you believe this is weird, yes it is. Why don’t investors take advantage of this? Because it’s no fun. Foreclosure beats bankruptcy by a mile. In foreclosure you just lose the house (which is an investment anyways). In bankruptcy you lose the right to everything. The judge decides what assets you can keep, how much of your debts you must repay, etc. Definitely not fun.
2. What is a “cram down”? Say you owe $600K on a $400K house. Say you also have $30K in credit card debt. Well, the judge decides that only $400K is a “secured mortgage”, and the rest ($200K) is unsecured debt, just like the $30K credit card debt. If the judge decides that the new $400K mortgage is within your budget, then you can keep the house. Also, if the judge decides that you can still afford to pay a portion of the $230K total unsecured debt, then you must do that as well. Realistically speaking, the unsecured debt is rarely paid back; if you could afford to pay it back, you wouldn’t have declared bankruptcy in the first place. Again, bankruptcy is not a fun option, and foreclosure is usually the way to go.
3. Then, who could possibly take advantage of this? Answer: people in dire straits but who desperately want to keep their house. Not walk-aways, not flippers, not investors. People willing to go through the hell of bankruptcy to keep their house, and who could barely hang on by the skin of their teeth if their mortgage was crammed down.
In contrast, people who couldn’t afford even a crammed down mortgage would lose the house anyways. At the other end, people who could afford to pay more wouldn’t benefit either, as the judge would most likely ask them to pay the unsecured note as well.
ParticipantQuite a bit of misinformation on this thread… So, to set the record straight:
1. Investors ALREADY HAVE the option of reducing (“cramming down”) mortgages by filing bankruptcy. Any debt (commercial loans, credit cards, non-owner occupied mortgages, etc) can be crammed down in bankruptcy, WITH THE EXCEPTION OF PRIMARY RESIDENCE MORTGAGES. If you believe this is weird, yes it is. Why don’t investors take advantage of this? Because it’s no fun. Foreclosure beats bankruptcy by a mile. In foreclosure you just lose the house (which is an investment anyways). In bankruptcy you lose the right to everything. The judge decides what assets you can keep, how much of your debts you must repay, etc. Definitely not fun.
2. What is a “cram down”? Say you owe $600K on a $400K house. Say you also have $30K in credit card debt. Well, the judge decides that only $400K is a “secured mortgage”, and the rest ($200K) is unsecured debt, just like the $30K credit card debt. If the judge decides that the new $400K mortgage is within your budget, then you can keep the house. Also, if the judge decides that you can still afford to pay a portion of the $230K total unsecured debt, then you must do that as well. Realistically speaking, the unsecured debt is rarely paid back; if you could afford to pay it back, you wouldn’t have declared bankruptcy in the first place. Again, bankruptcy is not a fun option, and foreclosure is usually the way to go.
3. Then, who could possibly take advantage of this? Answer: people in dire straits but who desperately want to keep their house. Not walk-aways, not flippers, not investors. People willing to go through the hell of bankruptcy to keep their house, and who could barely hang on by the skin of their teeth if their mortgage was crammed down.
In contrast, people who couldn’t afford even a crammed down mortgage would lose the house anyways. At the other end, people who could afford to pay more wouldn’t benefit either, as the judge would most likely ask them to pay the unsecured note as well.
ParticipantQuite a bit of misinformation on this thread… So, to set the record straight:
1. Investors ALREADY HAVE the option of reducing (“cramming down”) mortgages by filing bankruptcy. Any debt (commercial loans, credit cards, non-owner occupied mortgages, etc) can be crammed down in bankruptcy, WITH THE EXCEPTION OF PRIMARY RESIDENCE MORTGAGES. If you believe this is weird, yes it is. Why don’t investors take advantage of this? Because it’s no fun. Foreclosure beats bankruptcy by a mile. In foreclosure you just lose the house (which is an investment anyways). In bankruptcy you lose the right to everything. The judge decides what assets you can keep, how much of your debts you must repay, etc. Definitely not fun.
2. What is a “cram down”? Say you owe $600K on a $400K house. Say you also have $30K in credit card debt. Well, the judge decides that only $400K is a “secured mortgage”, and the rest ($200K) is unsecured debt, just like the $30K credit card debt. If the judge decides that the new $400K mortgage is within your budget, then you can keep the house. Also, if the judge decides that you can still afford to pay a portion of the $230K total unsecured debt, then you must do that as well. Realistically speaking, the unsecured debt is rarely paid back; if you could afford to pay it back, you wouldn’t have declared bankruptcy in the first place. Again, bankruptcy is not a fun option, and foreclosure is usually the way to go.
3. Then, who could possibly take advantage of this? Answer: people in dire straits but who desperately want to keep their house. Not walk-aways, not flippers, not investors. People willing to go through the hell of bankruptcy to keep their house, and who could barely hang on by the skin of their teeth if their mortgage was crammed down.
In contrast, people who couldn’t afford even a crammed down mortgage would lose the house anyways. At the other end, people who could afford to pay more wouldn’t benefit either, as the judge would most likely ask them to pay the unsecured note as well.
ParticipantI gotta say that I’m completely amazed at the yields on the 10-year note and 30-year bond. Zero yield on short term T-bills is fine, I can see that. But 30 years? 30 freaking years? That’s a very long time…
ParticipantI gotta say that I’m completely amazed at the yields on the 10-year note and 30-year bond. Zero yield on short term T-bills is fine, I can see that. But 30 years? 30 freaking years? That’s a very long time…
ParticipantI gotta say that I’m completely amazed at the yields on the 10-year note and 30-year bond. Zero yield on short term T-bills is fine, I can see that. But 30 years? 30 freaking years? That’s a very long time…
ParticipantI gotta say that I’m completely amazed at the yields on the 10-year note and 30-year bond. Zero yield on short term T-bills is fine, I can see that. But 30 years? 30 freaking years? That’s a very long time…
ParticipantI gotta say that I’m completely amazed at the yields on the 10-year note and 30-year bond. Zero yield on short term T-bills is fine, I can see that. But 30 years? 30 freaking years? That’s a very long time…
December 8, 2008 at 11:34 PM in reply to: Can you sell your house as a short sale if you can still make the mortgage payment? #313591ParticipantThanks, sdr, for clearing this up. It’s quite amazing that lenders don’t push harder. Maybe they figure the sellers won’t pay even if they can afford to, and would walk away rather than participate in the loss (which is probably true).
An interesting fact: among the major economies, only the USA has no recourse mortgage loans. It also has an expensive and slow legal system, which makes it not worth it going after a borrower (even if the lender were allowed to).
To be honest, I can’t see who in their right mind would invest in mortgages under these circumstances. Ummm… oh yeah, I know: you and me and the rest of the taxpayers…
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