Comments on: What do I do now?

By: AlanM

AlanM — Wed, 30 Apr 2008 19:36:48 +0000

I would like to pose one basic question that has dumbfounded me all along:

h.pylori2, why on Earth did you buy a house, in about the biggest bubble market, at just off the peak? Countless evidence existed to show how destructive that could be.

I am sorry you find yourself in this situation, and wish the best for you. I just don’t understand how people can willfully ignore what is staring them in the face, to their own peril.

By: h.pylori2

h.pylori2 — Mon, 28 Apr 2008 18:08:20 +0000

All – Thank ou for your comments and honesty. I have no interest in acting “immorrally”. We intend to stay in this as long as we can. So here is the run on what we have done thus far:

Our house is in great shape and priced well (meaning after the REs take their cut, I will be negative $100k, hard to beg, borrow and steal that). It has been shown over 40 times in 3 weeks.

I have hired a Miami based RE attorney who is represnting me to the lenders regarding my situation and looking into all of the potential issues.

I have accepted my fate on the credit hit(unless I win the PowerBall, thanks Toys, I bought a million tickets, I think my problems are solved!).

To brucewho, your assumption about suffering was the wrong vantage point. I do not want your pity…I want advice on the best way to handle the situation…I get enough love from my family and God.

To Twist, many thanks for this forum and for posting my question. I hope many people read this…

By: inqydesu

inqydesu — Mon, 28 Apr 2008 17:59:15 +0000

Nvmike

While I don’t necessarily disagree with the walking away, I don’t think you can dismiss the moral implications here by just making a declarative statement.

If I promised to do something without undue duress, I should do it. If someone points a gun at my son If I do it, I may reconsider that course of action.

If I took out a mortgage to buy a house, I should pay it. If I Can’t, I can’t. If I can, but don’t want to, because it will cost me $10k, or $20k, tough. How much is your integrity worth?

By: speedynogales

speedynogales — Mon, 28 Apr 2008 17:02:59 +0000

Call the lender, inform them that if they don’t work it out with you, you will mail your keys to them, and then they will have one more house in their already buldging portfolio.

Then you go to Starbucks and order a $5.00 cup of coffee, sit back, relax and blame it on the housing market as you swear to yourself that you’ll kick the Starbucks habit.

Then you check in with all of us here at HD daily, and eventually you’ll get your life back in order. We have good sound advice for those of you who purchased a ticket on the Titanic…

By: NVmike

NVmike — Mon, 28 Apr 2008 16:29:18 +0000

Morally he should suffer through and be responsible for the obligation he contractually accepted.

Walking away is a legal and moral option.

By: Florida

Florida — Mon, 28 Apr 2008 06:44:41 +0000

A mortgagee in Florida has the right to go after you for a delinquency judgment. Check your mortgage to see if it is recourse or non-recourse. If non-recourse, turn in the keys and call it a day. If recourse, consider a short sale or deed-in-lieu. Both will hit your credit record, but neither as bad as foreclosure or wasting more money paying for a bad investment.

Focus on what is best for your family and make your decisions from there. When its all over, think about what happened to glean a few lessons from this experience. That will reward you more in the future than anything you could lose today.

By: nvattorney

nvattorney — Mon, 28 Apr 2008 04:23:03 +0000

Call the Colorado State Bar and get a referral to an attorney. You can talk with an attorney for very little money, less that $100 I’m sure.

By: longwaver

longwaver — Mon, 28 Apr 2008 03:28:04 +0000

If you want to be moral and upfront about the whole thing do the following:

#1 – Run the math that proves you will destroy your family’s finances if you keep dumping money down a hole

#2 – Call the bank’s 1-800 number and be very clear that by requiring you to keep making payments, it will ruin your family.

#3 – At this point a “moral” bank will understand, forgive the debt, take back the house and send you a thank you letter for being so proactive and forthright.

By: longwaver

longwaver — Mon, 28 Apr 2008 03:24:58 +0000

What is with all the moral crap I keep hearing regarding contracts?

A mortgage is not with your church. You didn’t borrow the money from starving orphans.

Treat others as you would want to be treated… So if you held a mortgage note on someone, and you knew that they could only make the payment for 6 months and if they did that it would bankrupt them…

Well what would Jesus do then?? Riddle me that…

This is a bank people.. a bank that is based on fiat currency.. Just a bank….

By: brucewho

brucewho — Mon, 28 Apr 2008 01:04:06 +0000

Morally he should suffer through and be responsible for the obligation he contractually accepted. That said then perhaps it really comes down to “When in Rome do as the Romans do”. Substitute America for Rome and you have the perfect excuse. The chickens haven’t even started to come home to roost on this yet. I don’t know the guty but why should I wish him well? It’s his mistake. A pound of flesh I say!

By: JimAtLaw

JimAtLaw — Sun, 27 Apr 2008 23:37:48 +0000

I’m likin’ that lotto ticket thing… Seems very in tune with the American spirit these days – party ’til they come to take it away…

By: toysarefun

toysarefun — Sun, 27 Apr 2008 18:12:25 +0000

1. Sell house at a loss.
2. Foreclose.
3. Buy lottery tickets. (Powerball currently at about 150 million)

By: Tobby

Tobby — Sun, 27 Apr 2008 16:58:41 +0000

profnickd is correct. You need to examine the consequences of walking away. If your credit is still good and you have some assests then you should talk with a BK attorney. Not to file BK, but to get your finances in shape. You are going to take a credit hit, regardless of whether you walk away or get a short sale. If you have good credit it may make sense to “excercise” that credit via a HELOC on your Denver house and/or other cash credit lines before the credit downgrade occurs. Get legal advise first though if you can.

By: Deal Hunter

Deal Hunter — Sun, 27 Apr 2008 07:42:58 +0000

I’d first try and get the FL house rented to mitigate some of the monthly sting. Then, I’d ask lender for a forbearance if the negative is going to eat away at savings and eventually run out.

By: Yossarian

Yossarian — Sun, 27 Apr 2008 05:57:15 +0000

Borrow cash from everyone you can. Get multiple credit cards. Get cash advances. Rob banks. Defraud friends and relatives. Put all cash into a sack, buy a few gold coins for safekeeping. Tell people you are a Christian, as you take their money. Kneecap the agent who sold you the house. Set fire to it.
Fly to a South American country without an extradition treaty, buy a productive ranch next to the Bush compound (he thought of this first). Contribute to the local constabulary. Change your name to ‘Diego Garcia’, your wife’s to Diega. Learn Spanish.
Or, just mail your keys in and walk away.

Heart-wrenching choice.

By: profnickd

profnickd — Sun, 27 Apr 2008 05:16:57 +0000

Just one qualification to my suggestion, the same as others have already made, to walk away: you cannot walk away from a HELOC. Your assets (e.g. bank accounts, income, etc.) can be attached by the lender for this type of debt.

While the only recourse a creditor/lender has in regards to debt recovery for a primary residence is to seize the residence, a HELOC is essentially like a revolving credit account — as such, it involves more risk both for the lender and the debtor. The lender risks losing the borrowed funds in their entirety (hence, the greater interest rate) and the debtor risks civil recovery efforts by the creditor/lender.

If you have taken out a “second mortgage” this is a HELOC and you would need to be mindful of your status as a debtor in this case.

By: manfre

manfre — Sun, 27 Apr 2008 04:41:59 +0000

If you can no longer afford the payments, stop making payments and give it back to the lender.

By: NVmike

NVmike — Sun, 27 Apr 2008 03:14:02 +0000

Get someone to secure the property, call the mortgage holder and tell them you’re voluntarily surrendering the property and ask where to send the keys.

You should also send registered mail attesting to the surrender.

You must protect your family’s finances first and foremost. Don’t pay another penny of mortgage, insurance, taxes, maintenance fees, HOA fees, etc.

Just walk away. It’s not your problem anymore.

By: surak

surak — Sun, 27 Apr 2008 00:51:06 +0000

Idaho,

I agree.

By: Idaho_Spud

Idaho_Spud — Sat, 26 Apr 2008 21:13:12 +0000

To me, it seems pretty obvious:

If the person can neither continue to make payments nor sell the property, the only remaining option is to turn it back over to the bank.

The property is collateral for the loan, and the lender said so very clearly on the mortgage papers. They were aware (or should have been) of the risk when they lent the money.

There is no need to cause long-term and overly burdensome financial harm to a family for any purchase, including a house.

spam word very appropos for a californian: hightax