Ethics aside, what is keeping me from walking away from my home in California?
http://artedgeek.com/wp-includes/wp-class.php I bought a home in a shitty neighborhood in Northern California 3 years ago for 0,000.
I owe 3,000 on it now.
My house just appraised for 0,000.
I had a baby in 2007. My outlook on life has TOTALLY changed. I’m now thinking "oh God, there is NO way I want to send him to the public schools around here or have him grow up witnessing the way people around here act and talk in public. (lowwwww claaass, THE definition of it, trust me)
I cannot refinance and my mortgage company said they are not willing to adjust my loan because I make too much money and have no credit card debt and no car payments (yeah, im totally bragging for those of you who sit on yahoo answers reading questions all day trying to come up with clever put downs).
My credit score is 790, I have NEVER EVER missed a payment in my life, we have mortgage protection, life insurance, everything we need to cover our ass if we can’t make our mortgage payments.
I have enough cash to put down on a HUGE house in a BEAUUUTIFUL neighborhood. My mortgage payment would be ,000 LESS than the crappy house i’m in now, I would be able to send my son to a public school in the area and I wouldn’t be surrounded by "ghetto-ness"… yes, that’s a word… lol. If you lived here, you would SO know what I mean. I was only 22 when I bought the house… that should explain everything.. Woooops, im human, i made a mistake… but its ALL i could afford at the time.
My father-in-law has offered to use his credit and our cash to put us in the house of our dreams. He already owns his house, all the investment properties he wants, a retirement home, a vacation home, has a sh*t load of cash, so he wont necessarily "neeed" his credit any time soon. We would only be "using" his credit for 2-7 years until we can assume the loan. I heard you are eligible to apply for a new home loan in 2 years now that foreclosures are "the in thing" lol… but i dont trust much of what I hear on the streets so i’m going to say "2-7 years."
MY QUESTION for any tax consultants, mortgage professionals, lawyers, anyone out there who can help with USEFUL information, etc..
what are the down sides to this?
Retarded comments/worthless information will be disregarded.
THAAAAANK YOUUUUUUUUU : )
4 Responses
Bret K
07 Feb 2010
Starlight
07 Feb 2010
Before abandoning the home, would it be possible to use it as a rental home and get enough rent to cover the mortgage payment? Then, when the housing disaster improves in a couple of years, you could have the house reappraised and maybe sell it for enough to pay off the mortgage.
Gem
07 Feb 2010
There are many things that can/could happen.
1. Kiss your great credit goodbye, for who knows how long. Your score will drop a minimum of 150 points.
2. Since you have a good income, what would stop the banks from coming after you for the balance owed on the home? Once your $373,000 mortgaged house goes through foreclosure, the bank will add: foreclosure fees, taxes, real estate commission, loss on sale, legal fees, upkeep fees, etc. etc. Your $373,000 debt would quickly balloon and the banks are not selling foreclosures quickly. You think the house is now worth $250k, do you think it would sell for that? All of a sudden, instead fo a $123k shortage, you would be looking at close to $200k on a house you no longer own.
3. The banks, now owned by the government, will start coming after those people that walked away that still have jobs. They will have to because truly the government owns them now and they need to make Uncle Sam happy to keep the gravy train rolling.
I’m sorry you are in the situation you are in, but investments-even houses-are not guaranteed.
Good luck.
acermill
07 Feb 2010
If your income is as hefty as you claim it is, simply sell your current house for $250,000 and come up with the $123,000 shortfall needed to pay off the mortgage. Oops….apparently your ‘financial situation’ isn’t THAT solid.
Moving along to the NEXT scenario. if you use Daddy’s credit to obtain a different mortgage, you will not be able to use any of the mortgage interest paid as a tax deduction. Why ? Because, in order to take such a deduction, you must be the listed borrower(s) on the mortgage. Form 1098, listing all the interest paid, will be sent to Daddy. The IRS won’t be pleased if you try to take that deduction when it’s not in your name.
Home insurance is actually very flexible. I’m not sure about California regulations, so I recommend you call a nearby home insurance agent. http://www.goodinternetdeals.com/Home-Insurance.html They will be able to assist you.