Forum Index
»
Off-Topic
buying a 2nd home while underwater on 1st?
![[Post New]](/jforum/templates/default/images/icon_minipost_new.gif){kind=icon}
Anonymous
| Great -- someone else's screw up I'll get to pay for. |
Anonymous
This is what I thought too...What ever happened to paying $$ b/c you owe it!!!! DH and lost a ton on our house, but we are going to keep that sucker, and no we are not going to do a short sale b/c we are not A$$holes. |
Anonymous
|
Wow, this is how our country got into this. Don't tell me, you are not even from here and could care less. THAT's good for our economy. Sarcasm. Earlier immigrants/settlers from other generations had more pride/regard for their environment/neighborhoods. Now they just don't give a f*ck and are wondering why we want immigration reform. All those people living in the hose ("brothers", "sisters", "aunts", "cousins", you name it) - and the mortgage can't be paid? This is one of the many reasons. Whether or not you are from here, shouldn't you have more fiscal sense than "doing what the next guy does". It is a rhetorical question, of course. Your credit will be tarnished for AT LEAST seven years. No more Target, no more Walmart. Then, on top of that, they will probably take your second home if you don't pay on your first home. Which, frankly it sounds like you have no intention of doing. Are you okay living in a tent when they take the second home against the first home? Because a tent is still a tent. Then we will be reading same (not so) sob story from you on here about WHAHHH, they're going to take my home and (insert pathetic story here). Meanwhile, we're supposed to feel sorry for you and offer you *free advice* - yet again? And We are supposed to pick up the tab? WTF? What exactly is wrong with you? Handouts much? Do you have parents? Why are handouts okay with you? Why is it okay for others to pay for your mistakes? Is this what you are teaching your kids? Really, are you okay teaching that kind of fiscal irresponsibility to your kids? Because that is just plain wrong. |
Anonymous
| One of my neighbors bought a second home in VA Beach and walked away from her big beautiful house here. I understand that they were struggling but I think what she did was completely selfish and I can't even look at her. She keeps coming back to host those stupid suburban parties where you have to buy stuff and it sickens me. |
Anonymous
|
You can purchase antother home if your first home is underwater, but the lenders have caught onto this scam that your neighbor is doing. Your debt to income ratio has to be REALLY good in order to do this, so they have something to come after. The primary residence will look like debt and will roll into your debt to income ratio. You have to be able to EASILY afford to carry both mortgages in order to get the second one.
If their income is high, there is no way they will be able to prove hardship and simply let the house go to a short sale. They will have to either lose job or simply foreclose on house #1 if they want out. If they foreclose, and if they are in a recourse state, then the banks can come after them for YEARS to come. I'm sure this foreclosure debt is being sold to collections agencies and I would bet that the dogs will be unleashed in the next few years. |
Anonymous
What's surprising people I think is that you're saying they owe 250. Their condo is worth less than 250? |
Anonymous
|
Shot sales and foreclosures - be VERY careful, OP. If someone can demonstrate "financial distress", it is true a short sale can be approved. But the bank can and will go after them later to recover the money it lost during the transaction. Not to mention the burden of bad credit for years.
For your own interest, do not do it. |
Anonymous
|
We recently bought a second home without selling our first. In terms of mortgage requirements you have to be able to easily carry both mortgages on your current income. I believe the debt to income ratio to qualify for most mortgages was lowered in January of 2010. Also there are conditions in which the rental income of your first property will not count towards the "income" portion of your debt to income ratio....I believe one of those conditions is if you have less then 20% equity in your first home.
|
Anonymous
Um, no. Common sense, please. If you never actually receive the 100k profit you can't be taxed on it-an assessment is not an actual profit, just an estimate of what your house could sell for. But if you are 100K short (hey! that's why it's called a short sale! You will have to come up with that 100K somewhere to pay off your loan to the bank. You could file for bankruptcy--but the lovely Bush admin pushed through new laws in 2007-2008 that make it so every must file chapter 13 now and slowy pay down choking bills for the rest of their life rather than get a clean slate to start over with The way it used to be (with chapter 7 filings) This is what has really pushed the economy over the edge--people make risky mistakes (think Chrysler, Donald Trump, American Airlines, even liver spotted Larry King) what do they have in common multiple bankruptcy filingsfrom which they recovered and started over with and kept right on going. That was within reach of the average over-leveraged upper-middle class person until the Bankruptcy laws were horribly modified on behalf of bulldozing lobbying by the credit card and mortgage institutions. *sigh*. climbing off soapbox, now. |
Anonymous
You got it! I was the other 2nd home pp in this thread. they would only qualify us if we could afford the mortgage on both. we couldn't get a heloc off of the rental property. We came up with cash for the 2nd home's downpayment...and there was an amount of equity required for first home. We are A+++ credit wise...800+ credit scores, zero debt (other than remainder on first mortgage, etc)...and we jumped through hoops to get the approval. I can't imagine somebody with less than stellar finances/credit being able to do this. |
Anonymous
Wow. Hard to know where to start with this, so I won't even try. A little (very little, actually) knowledge is indeed a dangerous thing. |
Anonymous
|
Unless I'm misunderstanding something, I have a hard time believing that any financial institution woudl give the neighbors a loan for $600k. As I understand it, they want to use $250k to pay off the initial condo, and the remainign $350k to purchase another place. But what would be the security for the $600k loan? Neither place is worth that much. I suppose the credit union could have a security interest in both places, but with the value of the current condo apparently plummeting (below $250k - wow) it seems unlikely that they would accept that arrangement, especially when they'll be ably to see pretty clearly that the ability to cover the mortgage is dependent on the rental income. Plus, the new home would be 100% financed.
On another not, their plan (whether possible or not) makes them scum. I almost hope they pull it off, because as a pp said, absent a significant change in circumstances, no bank is going to let them walk away from a short sale - they'll be hounded for years, as they deserve to be. |
Anonymous
Yep, exactly this. |
Anonymous
|
9:34 is a very strange post. 9:34 PP - Sounds like you had to declare chapter 13 bankruptcy and pay off your debts instead of starting with a clean slate? You seem very angry. Guess what? I don't really think declaring bankruptcy should bring a clean slate. I think that if you rack up huge debt- especially if it's consumer debt and not as a result of medical or disability issues - you should have to keep paying it off. Why should other people be responsible for debts you incurred, which is what happens when you get a "clean slate" of debt forgiveness?
Bad things do happen to good people sometimes, but bankruptcy was becoming a way for chronic irresponsible overspenders to escape having to pay for the things they bought. I do think there should be tougher laws for that. You shouldn't be keeping up with the Joneses and then making the Joneses pay higher credit card rates because you can't pay your bills. As for the OP - your neighbors are shady. They're trying to game the system. Please don't contemplate trying to do what they're doing. You should only let a short-sale happen when you are desperate to sell and have to move, like if you are actually financially destitute or have to change areas for a job or something. Otherwise, face it, you bought at the wrong time or made a poor investment and now you need to sit on your house till the value comes back up to where you can sell. You took a gamble and lost. A lot of us did in the stock market or real estate. |
Anonymous
Debt (bank loan, CC), written off (excluding bankruptcy), and over a certain amount, must be reported to IRS and is considered "unearned" income and amount is taxable. Short sale. lender holds you responsible for for extra 100k or whatever the amount. If one is in this position and debt is overwhelming, time to consult bankruptcy attorney. If there was ever a time to have bad credit, it is now. Bankruptcies, foreclosures, repossession of autos., is still sky high all over the country and shows no sign of abating. The consequences of Bush (2) administration will be with us a long time. |