Strategic Default

Sure sounds like it...

 

Our demonic HOA was another reason we wanted out. We paid our dues, but the HOA was non-responsive to any issues we had. Landscaping fell behind consistently, they were towing cars parked in front of their own garages for only 20 minutes, not maintaining our community pools, etc. And, they raised fees 3 times in 3 years. Great way to keep a community livable.

 

Yes true.... But walking away from it and defaulting is the 'financially responsible' way? Who do you think picks up the tab for your non-payed mortgage. You made a bad decision so I agree with the person who said PAY YOUR OWN BILLS even if it means losing $$$. It is people who default on their payments that put this country in the condition it is in now. If you can't afford it you shouldn't have signed a mortgage for it.

 

Not quite, but good try.

We decided that the least financially harmful move for us was to walk away from the house. Of course we stopped making payments because we moved out, smartass. I'm not going to keep paying for a house that I'm not keeping and that the bank is going to own. We also left the house in perfect resellable condition unlike other assholes that strip out all the fixtures, punch holes in walls, and sell their a/c units. We even cleaned it and shampooed the carpets.

My money is mine, not yours. I make decisions based on what is in my best interest, not based on the opinions of others. Everyone's situation is different, and we don't all live like the rest of the world. If you don't like my decision to foreclose, fine. You aren't in the same situation I was in and it's not your loss.

I'd like to see you over 40% upside down on your home and know you were fucked for 10 years just to break even and see what you would do. Plus, we outgrew the house a long time ago and knew we wouldn't be able to sell in this market to get something bigger. Why waste 10 years when you only have to wait for 3? I prefer to end my misery, but if you prefer to stew in it than go right ahead.

 

It wasn't my mortgage, it was my fiancees. She bought right before we met. Had I met her earlier, things would have been different.

 

Well, if the banks didn't give out fucked up mortgages a few years ago to people who shouldn't have been qualified, things wouldn't be how they are now. And once again, this wasn't my mortgage and I would have done things differently.

 

I dont completly agree with this comment. I think 90% of the defaults were the an effect of the predatory lending beyond peopls means and an artificial housing bubble that burst. Some people knowingly lived beyond thier means, others were tricked into it. Then the stool was kicked out from everyone. There is not one spot to blame, it get spread around between the government, the banks, and the people. Some get more blame, some get less but to say the people who walked away from thier mortages are to blame is jsut ignorant. Do I think its the right solution, no. But out of all the lesser of the evils, especially if you can no longer afford it then I think it is the best choice.

When your a family of 4 and you go from 2 incomes living comfortably to 1 income and barely making ends meet it might jsut be a wiser decision in the long term to do a voluntary repossesion of the house, walk away and start over and live within your new means.
One thing to watch out for is for houses sold at foreclosure and short sale is that banks are coming after the people who walked away for the remaining balence of the debt owed. If you had a 100K mortgage and your hosue sold for 50K you still owe 50K + fees unless you have it in writing that your bank will waive any outstanding debt. So be careful of that.

 

In my fiancee's case, a bankruptcy would erase that anyways. It's probably going to be her best option if the bank does try to come at her for the rest of the balance.

 

I'll be doing this myself. Bought for 165k, maybe worth 40k at the most. Doesn't make financial sense to keep it, let alone it's in the middle of no where.

 

I'm sorry but to be 40% upside down on a house means you bought something at a ridiculous price and maybe you should have done your homework a little better before buying. When I was out of college I got prequalified for a loan upwards of $400,000 on my measly entry level salary. This is where the consumer needs to do the math and figure out what they can and can't afford. You're 100% correct, it's your money, you should make better investments. Obviously, everyone's situation is different so blanket statements about finance don't work. I understand predatory lending was the partial reason for a lot of people defaulting. I purposely say partial because you still signed for the loan and if you didn't understand what you were signing you shouldn't have taken out the loan.

Unsub'd before I say something regretful...

 

I've talked to Real Estate lawyers based out in PHX when I walked away from my house in 08. PM me if you want.

 

Subbed or not, here's the numbers:

She bought a 3 bedroom 2 bath townhouse in a very nice neighborhood for $180k. Reasonable given her $60k a year income with a paid off car. We found out earlier in the year that the fair market value for her house was between $80k and $110k based on the market crash. Keep in mind this is a townhouse which are always a pain in the ass to unload anyways.

Before this, she was having a $130k townhouse being built to her liking on another property but with the same builder. She had $7k in earnest money already invested, and there's no getting that money back. The builder went bankrupt within 2 months and never finished building her home. 3 years later it's still nothing but framework. So, they had converted 3 model homes in a different property into sellable units, and her only option was to pick up one of those for $50k more or lose the $7 grand. In retrospect, she should have walked and lost the $7k and been done with it, but hindsight is 20/20. She felt pressured to pick up the more expensive townhouse in order to not lose her earnest money. Deal was done, then she met me 2 months later.

We made a run at it, trust me. For 3 years we pondered this whole situation as we watched the value of her house drop tens of thousands each year. We thought about making it a vacation rental (our neighbors did this because they live in Canada) and at least try to break even, but they were losing money as well because of rental values in the area and because we were pretty far away. It was a dead end either way you looked at it, and the 4 of us just couldn't fit into 1300 sf anymore. We were busting at the seams.

Look at it this way... someone is going to get a smoking deal at auction on a cute little custom townhouse in a nice neighborhood. We did someone a favor at our expense.

 

And there's no way that an entry level salary would prequal you responsibly for $400k. I'd need proof of that before I even tried to believe that one.

 

i took it upon myself to make a personal decision and not argue with people that dont know what they are talking about.

if you dont have something nice to say in a thread, please do not post in it, keep it to PMs.

thank you and have a great day

 

Until it was paid off, yes.

Also, why the hell would I finance a car (depreciating asset) for more than a couple years? And if I'm borrowing on it, it's new so I have no worry about paying to repair it.

 

Aren't you the dipshit that just told me to get the fuck out of the thread?

 

It's a bad investment that you BORROWED hundreds of thousands of dollars to make. You're not burning your money anymore, so why worry?

Entitlement mentality.

 

actually i am, your a genious

 

but its only common sence to get out from under something if you owe 300k on it and its worth 220, and how was it a bad buy? at the time it was a great buy you dont know when stuff starts to crash.

i know my mom/step dad were over 100k upside down. at the time we got a great deal. but not when the market crashed.

why stay and pay that 100k+ for nothing?

 

Do you not see the disconnect between your 2 posts?

And if you're going to go the "insult the intelligence" route, it's 'you're' and 'genius'.