My Personal Housing Crisis

[Bill Walton.]

Why is getting a new loan for the repairs not an option?

He doesn't have equity to build the house back up. The value of the home significantly dropped. You can only borrow up to 80% of your house's value

 

[Lee]

Why is getting a new loan for the repairs not an option?

He stopped paying his mortgage and the house is in unfinancable condition because of the flood it is not livable (and has safety issues).

It would have to be a 401k loan or a loan from a friend or family member. The bank wont touch the risk.

 

[Lee]

He doesn't have equity to build the house back up. The value of the home significantly dropped. You can only borrow up to 80% of your house's value

That too, but he can go up to 85% on a fha loan, but still, not going to happen for the other reasons I laid out.

 

[Notorious]

He stopped paying his mortgage and the house is in unfinancable condition because of the flood it is not livable (and has safety issues).

It would have to be a 401k loan or a loan from a friend or family member. The bank wont touch the risk.

I'm wondering why he said beg, borrowing or stealing wasn't an option originally. He specifically said because he'd have to pay the 120k plus the repairs. I'm wondering why that was an issue.

 

[Kyrieville]

What is the current value of the house on zillow? If it's much less than what you would owe after investing $30k into it, walk away and get a fresh start. If it is more, get it fixed and live in or sell the house.

 

[Notorious]

What is the current value of the house on zillow? If it's much less than what you would owe after investing $30k into it, walk away and get a fresh start. If it is more, get it fixed and live in or sell the house.

Dumbest idea anyone has ever given on a mortgage. Sad that so many repeat this.

 

[Kyrieville]

Dumbest idea anyone has ever given on a mortgage. Sad that so many repeat this.

Not really. If he doesn't have enough equity in the house to justify making a huge investment in it or enough equity to even get a home equity loan to pay for the repairs, the smart thing to do would be to walk away. His house is currently unlivable and he can't afford to fix it.

 

[Lee]

Dumbest idea anyone has ever given on a mortgage. Sad that so many repeat this.

It is a legal option. Might not fit with your moralities, but that doesn't make it dumb, just not something you would do. Its called a strategic default.

Better idea than thinking the bank will give him the money for the repairs just because the bank has a mortgage against the place.

 

[Bill Walton.]

It is a legal option. Might not fit with your moralities, but that doesn't make it dumb, just not something you would do. Its called a strategic default.

Better idea than thinking the bank will give him the money for the repairs just because the bank has a mortgage against the place.

The bank isn't going to give money for the mortgage. No chance, especially a bank like BoA. Re-payment plan is a possibility, but foreclosure/bankruptcy is probably the best option. Gonna be tough for a solid 7-10 years but many people are able to get their credit score in the 700s. This is the unfortunate side of banking. Bad things happen to good people whom have good credit and solid jobs. Its an unlucky situation that you just cant avoid. Its going to be difficult to even find who to talk to at BoA for a situation like this, its not an everyday thing. Thats why I'll continue to suggest getting legal advice. They're going to direct you better than most branch employees ever will.

 

[Notorious]

This dude says he has a good paying job. It looks like he just doesn't want to pay $180k for a $150k house. I see so many people with this line of thinking. My $200k is now at the moment only worth $160k so I'm turning in the keys. So many people I know right now living with Mom and Dad or a relative because they didn't want to pay more for a house temporarily worth less.

Here's why it's absolutely retarded.

I bought my first house in 2003, it's now rented. I "paid" to the seller $120k. I put $20k down. I took out a 30 year loan since I don't have that kind of cash laying around. My payments with insurance and taxes removed are $530 a month. Multiply that by 12 and I'm paying $6,300 a year just on the mortgage. Multiply that by the 12 years I've had the mortgage and I've paid $76k in payments plus $20k down. I've now paid $96k of my money for a house "worth" $120k and I have 18 years left to pay. In 2008 the value dropped to $80k. Last year it was around $110k. My principal is now $70K. So I've paid $96K for a current $40k of equity in 12 years. In 2008 that house was worth $80k and I owed $88k with $52k already payed. Most of my idiot friends turned their keys in at this point. Let's say I pay another 18 years of my mortgage payment at $531 a month. I'll pay another $114k on top of the already $96k I've paid. So when everything is said and done I'll have paid $210k for a $120k house.

Most people sell that for 130k and say "I made $10k". Wrong you lost $80k.


If you don't buy a house with cash you're not paying anything even remotely close to sticker price. Suck it up, it's embarrassing when you live with Mom and Dad for 7 years after moving out because you torched your credit to "not pay more for something worth less." You can't even put an apartment in your name after letting go of the house.

The worst is I can't tell you how many moved out and then had Mom or Dad put a new house in their names and then that person lost their jobs or some other tragedy struck again.



Get over the sale price of the house. It means nothing. If you didn't buy it in cash you're never going to make money on it period. Add in taxes, insurance and maintenance and unless you're renting in a desirable area you've lost so much money at this point all you can do is see it through for that equity for the next house.

When you mortgage a house you will get a nice home to live in and a nice chunk of cash at a later date. This is not the stock market though. Buying a house on a mortgage is not putting your money to work. It's a loss spread out over 30 years because you needed someone else to finance it.

 

[Scrote Squad]

I'm wondering why he said beg, borrowing or stealing wasn't an option originally. He specifically said because he'd have to pay the 120k plus the repairs. I'm wondering why that was an issue.

This wasn't an option because I would have been financially crippled. 30k was just for the foundation repairs.

If I borrow the money from someone, I have to continue to make my mortgage payments while paying back a new borrower for the repair costs. I simply didn't make enough money to live on had I gone this route.

I guess this is where I fault the bank a little bit. Had they offered to suspend mortgage payments for 10 months, I probably could have swung all of this and would have been living there since.

 

[FiveThous]

This dude says he has a good paying job. It looks like he just doesn't want to pay $180k for a $150k house. I see so many people with this line of thinking. My $200k is now at the moment only worth $160k so I'm turning in the keys. So many people I know right now living with Mom and Dad or a relative because they didn't want to pay more for a house temporarily worth less.

Here's why it's absolutely retarded.

I bought my first house in 2003, it's now rented. I "paid" to the seller $120k. I put $20k down. I took out a 30 year loan since I don't have that kind of cash laying around. My payments with insurance and taxes removed are $530 a month. Multiply that by 12 and I'm paying $6,300 a year just on the mortgage. Multiply that by the 12 years I've had the mortgage and I've paid $76k in payments plus $20k down. I've now paid $96k of my money for a house "worth" $120k and I have 18 years left to pay. In 2008 the value dropped to $80k. Last year it was around $110k. My principal is now $70K. So I've paid $96K for a current $40k of equity in 12 years. In 2008 that house was worth $80k and I owed $88k with $52k already payed. Most of my idiot friends turned their keys in at this point. Let's say I pay another 18 years of my mortgage payment at $531 a month. I'll pay another $114k on top of the already $96k I've paid. So when everything is said and done I'll have paid $210k for a $120k house.

Most people sell that for 130k and say "I made $10k". Wrong you lost $80k.


If you don't buy a house with cash you're not paying anything even remotely close to sticker price. Suck it up, it's embarrassing when you live with Mom and Dad for 7 years after moving out because you torched your credit to "not pay more for something worth less." You can't even put an apartment in your name after letting go of the house.

The worst is I can't tell you how many moved out and then had Mom or Dad put a new house in their names and then that person lost their jobs or some other tragedy struck again.



Get over the sale price of the house. It means nothing. If you didn't buy it in cash you're never going to make money on it period. Add in taxes, insurance and maintenance and unless you're renting in a desirable area you've lost so much money at this point all you can do is see it through for that equity for the next house.

When you mortgage a house you will get a nice home to live in and a nice chunk of cash at a later date. This is not the stock market though. Buying a house on a mortgage is not putting your money to work. It's a loss spread out over 30 years because you needed someone else to finance it.

Better tread lightly going forward, people don't like when you shit on the "American Dream".

 

[Kyrieville]

This dude says he has a good paying job. It looks like he just doesn't want to pay $180k for a $150k house. I see so many people with this line of thinking. My $200k is now at the moment only worth $160k so I'm turning in the keys. So many people I know right now living with Mom and Dad or a relative because they didn't want to pay more for a house temporarily worth less.

Here's why it's absolutely retarded.

I bought my first house in 2003, it's now rented. I "paid" to the seller $120k. I put $20k down. I took out a 30 year loan since I don't have that kind of cash laying around. My payments with insurance and taxes removed are $530 a month. Multiply that by 12 and I'm paying $6,300 a year just on the mortgage. Multiply that by the 12 years I've had the mortgage and I've paid $76k in payments plus $20k down. I've now paid $96k of my money for a house "worth" $120k and I have 18 years left to pay. In 2008 the value dropped to $80k. Last year it was around $110k. My principal is now $70K. So I've paid $96K for a current $40k of equity in 12 years. In 2008 that house was worth $80k and I owed $88k with $52k already payed. Most of my idiot friends turned their keys in at this point. Let's say I pay another 18 years of my mortgage payment at $531 a month. I'll pay another $114k on top of the already $96k I've paid. So when everything is said and done I'll have paid $210k for a $120k house.

Most people sell that for 130k and say "I made $10k". Wrong you lost $80k.


If you don't buy a house with cash you're not paying anything even remotely close to sticker price. Suck it up, it's embarrassing when you live with Mom and Dad for 7 years after moving out because you torched your credit to "not pay more for something worth less." You can't even put an apartment in your name after letting go of the house.

The worst is I can't tell you how many moved out and then had Mom or Dad put a new house in their names and then that person lost their jobs or some other tragedy struck again.



Get over the sale price of the house. It means nothing. If you didn't buy it in cash you're never going to make money on it period. Add in taxes, insurance and maintenance and unless you're renting in a desirable area you've lost so much money at this point all you can do is see it through for that equity for the next house.

When you mortgage a house you will get a nice home to live in and a nice chunk of cash at a later date. This is not the stock market though. Buying a house on a mortgage is not putting your money to work. It's a loss spread out over 30 years because you needed someone else to finance it.

You're not taking inflation into account. If someone bought a house for $120k and sold it for $130k after 30 years of ownership, they made an unwise investment. $120,000 in 1985 is equivalent to $265k in 2015. So, if they sold their house for $130k after 30 years, they "lost" a hell of a lot more than $80,000.

Also, if they were to rent a similar house, they "lose" even more than $80k. I bet you charge your renters much more than the $500/month it costs to cover your mortgage/taxes/insurance.

 

[RonG]

To late now, but the correct answer other than exhausting the insurance route with an attorney not on your own. Secondly, if you had a 700 score you should have taken out a loan and paid to fix the house. 30k @ 6% for 10 years would have been 333 a month give or take. If you can't afford the 333 a month after paying your mortgage you probably over extended yourself.

So my take wont help you now, but maybe someone down the road. I mean we are talking less than 80 dollars a week.

 

[FiveThous]

You're not taking inflation into account. If someone bought a house for $120k and sold it for $130k after 30 years of ownership, they made an unwise investment. $120,000 in 1985 is equivalent to $265k in 2015. So, if they sold their house for $130k after 30 years, they "lost" a hell of a lot more than $80,000.

Also, if they were to rent a similar house, they "lose" even more than $80k. I bet you charge your renters much more than the $500/month it costs to cover your mortgage/taxes/insurance.

It's been proven that housing costs over the last 100 years or so don't even keep pace with inflation.

From 1890 to 1990 the appreciation in US housing was just about zero. That amazes people, but it shouldn’t be so amazing because the cost of construction and labor has been going down.

http://www.pragcap.com/robert-shiller-dont-invest-in-housing


I'm going to duck out though. I'm not getting into this again, because I don't want to piss off the OP any more than it sounds like he already is.