I love this thread... whenever I start feeling weird or upset about this whole deal, I just pop on here and it gets me right back where I need to be!
Obviously we don't like Suze's advice, but I have seen Dave Ramsey pop up a few times..... should I pick up some of his stuff???
Lately it seems Suze Orman been telling people to walk away...at least people who can't afford the house and are living off credit cards to make their payments. I would like to hear what she would have to say about walking away as purely a business decision (i.e. house is 100k+ underwater). Especially because she is so FICO crazy...Has anyone heard her say "You are your FICO score" and "FICO before ***" as in you have to share your FICO score first.
Not so good for the ego when my FICO score is about to take a huge dive from 800 down, down, down,...
As for Dave Ramsey - I have listened to him. Seems to know his stuff. I'm not particularly drawn to his personality and "I've been poor, I've been rich and rich is better" schtick. I don't fork over any $$$$ to any gurus from t.v., radio or Oprah shows. I will read on my own or take a cheap class somewhere. I've seen all these "gurus" on CNBC selling their rags to riches success stories. That's great. I'm happy for them. But, I won't spend $200 for their products. That Rich Dad Poor Dad guy turned out to be a fraud. I heard he had tons of real estate that all went into foreclosure! And, I do like Suze in general. But, she's oversaturated the market. She's on Oprah every other day with her faux empathy for us all and her $1000 haircuts.
Ahhhh Irish Gal!!! I screamed with laughter when I read that! Not that theres anything wrong with that of course!(Not Suze wink wink wink)
I got caught up in buying all that crap a few years back, from Suze's stuff to Rich Dad to Carlton Sheets. I was going to make us rich by following the gurus. As my husband pointed out on more than one occasion, the way these people get rich is selling to gullible people like me... Damn I hate when he's right. I can't say I will never read books on finance again but I will not pay one stinkin' dime. If a book is not in the library...foooorgettttt about it. I did get a deduction on my taxes for donating all the stuff to the library though.... Spend $30 on a book, get a $2 deduction. Ahhhh the story of my life. Buy high...sell low.
Unfortunately I was 1 of those people that should not have been approved, but I had a decent credit score before all this happened and had the VA backing my loan. Now 3 years later my credit score is a joke, I have ended up on 1 of those debt consolidation programs (have to figure out how to get out of that and afford the higher interest rates), and now need to walk away due to a new job in a new town.
In-laws tried making us feel uncomfortable and even guilty about all this, but they don't have to deal with this stress every day with me, so they can **** an egg is my feeling. Either be supportive of my decision or keep your mouth shut
Some people just don't know how to be supportive. I know that all too well. If I were to tell my mother what we are doing she would say "you made your bed now you have to lay in it". What B.S.!!! I learned long ago some things are just best left unsaid. Expecting support from my mother is like expecting to receive a letter from GMAC tomorrow telling me they are reducing my principal balance. Ain't ever going to happen.
When it's time to move. We'll simply say we're moving. End of story.
You have to do what is best for you and your family. The heck with everyone else. They are not walking in your shoes.
I like Dave Ramsey’s message. His basic philosophy is to live debt free. You don’t have to buy anything to follow his plan. All you do is work on paying off your debt, and save up your money. Once you’re out of debt you don’t borrow again. You use cash for everything. He’s anti credit cards, car loans etc (anything that makes you a slave to payments). He doesn’t care about FICO at all – his FICO score is zero. He has a TV show on the Fox Business Network, and an AM radio show. His motto is: Debt is dumb and cash is king!
The the state of the economy, and the mess we’ve gotten ourselves into by buying this monstrosity of a house/mortgage I tend agree with Dave.
I agree, Rim to Rim. You have to live with your decisions, no else does. Somethings are better left unsaid. We won't tell everyone we know about this. They don't need to know. There are a few very close friends and family we've told, but that's it.
I have to check out Dave Ramsey especially if I don't have to buy anything. Sounds like a smart guy. I came real close to buying a new car last month. My rationale at the time was my FICO would be in the dumper for 7 years. I have a 10 year old car better buy while I can. The more I got to thinking about it the more I thought that was a really dumb idea. Geez am I finally learning???? It's about damn time. I'm going to take part of what I would have spent on the down pymt for the new car and fix the few piddly things wrong with my car and take the rest and slap it on a cc. With the money we would have spent each month on a new car we'll double up on my husband's van pymt and get that paid off 2 years early and then save, save, save. I have one cc I will continue to use just to accumulate air miles because I have to travel for business but it will be paid off every month.
Don't worry about it. They will soon see why you did what you did. I have a friend who thought I was crazy last year for walking. Now, as his own home property value swiftly and mercilessly approaches his balance owed, he understands.In-laws tried making us feel uncomfortable and even guilty about all this, but they don't have to deal with this stress every day with me, so they can **** an egg is my feeling. Either be supportive of my decision or keep your mouth shut
ONRV: I did a Google search on Dave Ramsey. He has lots of YouTube videos. I watched a few. I like his suggestions on paying off debts and going to cash only. Our goal is to be debt-free with the exception of rent within a year. I didn't like everything that Dave had to say. A little too far to the right for me. I won't buy his books, CDs, etc., or anybody else's for that matter. Been there, done that, way too many times. It's the library and the internet for me from here on out.
Well, on Ramsey I agree with you all. Irish Gal, I have an issue or two with his personality as well, but agree with his basic philosophy that cash is king and get rid of credit cards. In order to be debt free, basic premiss is to live below your means. Thats how to pay off the car and anything else hanging over your head. With all of us out of our morts. that is one less nut to crack. Just need reset thinking and get er done. Texas
What is your cuisine specialty ? French? Many cuisines ? I watched Rocco (NY chef) on DWTS last season. He couldn't dance to save his life . Very cute though. Who's your favorite celeb chef or chef period ? What do you think of Rachel Ray ? What's with her voice ? By the time she's 50 she's not gonna have one . Every time I see her on t.v. she is larger. Not like Giada (the teeny, tiny, attractive Italian lady who eats and eats and eats - good Italian food - and gets thinner and thinner and thinner it seems !) If I wanted to learn how to cook really, really well, which one should I pay attention to ? Paula Dean cracks me up but her food is heart attack on a plate
I agree with Chefette.
The less debt you have the lower your financial stress, and the more time you have for the important things in your life.
When we bought this house we kept our old one as an "investment". Turns out that old house is now our safety net. We bought the old one in 2001, before the real estate boom (so we bought it for a reasonable price), and I'm so glad we kept it. Once the foreclosure is over we'll be moving back into it, and then we'll focus on paying it off.
I don't want to owe anybody money anymore. I had enough of debt.
Cash is king? Mmm yeah, you might want check into that. Notice as soon as the US Fed went all-in with it's last stack of poker chips this week, Russia and China began talking of a new global reserve currency. The fact that they are even talking about it... jeez. If that happens, it's game over.
I don't believe in the gold hype either. Especially the paper kind. If everyone is talking about it, it's too late.
If I had any cash, I'd put into hard asetts. Whiskey and wheat, beer and beans, weed and water, guitars and guns, and a couple chickens.
But what do I know, I'm just a 21st century peasant.
Rhode Island Red!!! Yeah, I'll take me two of them.
Cactus, I have to agree with you too. There is some scary stuff going on right now.
Pass the whiskey! I need a drink.
Great idea!! With the way things are going, there's no doubt whiskey, beer, weed and gun sales will go through the roof. Better start stocking up now. Instead of the lemonade stand on the corner... there would be little roadside stands selling the essentials to the masses.
This thread is hilarious! It's a great place to come when I need cheering up. We are walking from our house in AZ (DH lost his job a year ago and has only been able to find part-time work, and we are about $130,000 underwater). But my brother-in-law who is a real estate agent and therefore an "expert" about all this keeps telling us and other family members how we are idiots to be walking. He says that Citibank will of course do a magical mod that will cut our payments drastically (we sent in our mod package the first week of December and again in late January and they refuse to return our calls at this point) and that GMAC who holds our second is about to go bankrupt so that loan will just disappear (uh yeah, right). It's the stupid media's fault. They are reporting how the government is bailing all these people out, but as we all know that's a bunch of crap! So anyway, I just want to tell him to shove it-he doesn't know what he's talking about. And why would I want to stay? So that I can spend the next 20 years waiting for my house to be worth enough so that I can sell it and maybe recoup some of my down payment? It just irritates the crap out of me that he's telling everybody else this! And of course they believe him and just think we're fools. I told my husband not to tell everybody our financial situation-now they think they have the right to give us their crappy advice!
Sounds like your "expert" brother-in-law is living in a fantasy world. Why would one remain in a hopeless situation??? Doing the "right thing" for more months then we should have has left us with no savings and cc debt and a house that is $100K underwater. Lawyer told us to do the math. We did and we are not going to look back. We are looking forward...get the cc's paid off and a few bucks in the bank before we have to move. It was pure and simple a business decision. The "business" is failing therefore it needs to be closed. And as far as the lenders working with people, that is so much B.S. I met with our tax guy on Monday. He has a small practice but he's already had many clients in our same situation. Many tried to go the loan mod route. Lenders balked at reducing the principal and offering decent long-term mods. One guy had a $550K loan. House value was down to $410K. He tried to get the lender to reduce the PB to $410K because his income had gone down as well but he could have afforded the $410K loan. Worked at it for months. Ended up walking away. Lender sold the house for $339K. Now how the hell does that make sense??? Your brother-in-law needs to get his head out of the clouds and see what's really happening especially in states like the one we live in. He's the idiot!!!!! Not you and your husband. You are doing what's best for your personal situation. Period!!! End of story!!!
I love the way folks support each other here! As if there aren't enough "drive-by-guiltings" in the world, without family taking pot-shots at their own.
Someone, please tell me if I am wrong here, but...
You bought a house.
You did not have enough cash at the time, to pay the purchase amount in it's entirety, so "a lender" lent you some money in order to complete the purchase.
This lender "qualified" you as a borrower and asked you to sign a contract that obligated you to pay the money back (with interest) that they entrusted to you.
The contract and your qualification was likely based on something called a loan-to-value ratio, and/or a debt-to-income ratio was probably figured into the equation along with how much money down (if any) you would contribute.
As part of this contract, it likely says something along the lines of the idea that if you fail to make your payments on time, (or at all) that at some point your lender has the right to seize possesion of the asset you borrowed their money to purchase.
This was the contract you jointly signed.
As far as "honoring" the contract, you are doing so, by submitting the asset back to them when you no longer make the payments.
Don't be guilted by others who attempt to make themselves feel good simply by trying to make you feel bad.
By giving the house back you are in fact honoring the contract you signed.
Now honor your (own) family by doing what is best for them even if that means ignoring the sniper fire from your (extended) family and friends.
Friendly fire hurts... sometimes you just have to hunker down and avoid it.
My response usually outlines the consequences of a foreclosure when the housing market is up. What if you paid 25 years into a 30 year mortgage, you loose your job or are hospitalized permitting the lender to foreclose. Do you think the lender is going to feel bad and give you the hundreds of thousands of dollars difference between the loan balance and what the house sold for? If you say YES then I have bridge to sell you.
So why should you feel obligated to do the same?
I would be willing to agree that something is wrong if the lender was required to refund you profit from a foreclosure while you were permitted to abdicate from your financial responsibility without a loss. It is nice to know some states have decided to pass non-deficiency laws to help even the playing field between what the banks are willing to do to you and what you are permitted to do to the bank.
There is more to that clause then stated above. The clause actually allows the lender to recover costs associated with the foreclosure. That means 'paperwork fees' (read $100/hr for $7/hr college student), 'attorney fees' ($400/hr for in-house salary council), 'document fees', 'interest' (at the default rate), 'penalties' (arbitrary costs), etc.. etc.. I would bet any such foreclosure sale would lead to over $70,000 or more in 'fees' (aka 'profit').
Boneman: Well said!!!
Broke In AZ,
Your brother-in-law is an idiot. The holder of my first, Ownit Mortgage, was one of the first sub-prime lenders to go under, bankrupt (I didn't even know what sub-prime meant when I took out my loan and my broker sure didn't tell me...of course, it was my signature on the loan and my responsibility). However, I am in foreclosure now, trying to get a modification and by some means, Ownit is still the investor, according to the NOD. So just because the company goes bankrupt, it doesn't mean they go away...unfortunately.
I pity the people who rely upon your brother-in-law and other such "professionals" for advise. Given the downward spiral in AZ, I hope he doesn't find himself in our situation soon.....
In my line of work, construction and design, I have come across a lot of realtors. They are salespeople and some are very well-versed in real estate law, but myself, I would not consider them to be in the same category as a doctor or an engineer....I studied electrical engineering, so I know how hard it is....
I agree w/ you completely. I thought of doing the same thing just so I would have access to all the "insider" market info and withheld info that is kept from the general public. This is not meant to bash ALL realtors or brokers, but my sense about real estate folks has always been that they were folks who were not terribly ambitious or cognitively gifted re doing the necessary work to prepare for an honest job or career. Fast buckers. Yes. Baby doll women (or wannabe's) with kids to feed driving around hoods in leased BMWs. Ivanka Trump w/ a GED. Harsh maybe, but this is what I have seen. I remember too one (good looking) male agent who everyone knew was an active heroin addict most of his (successful) career ! Eccentric. He used to show up at open houses (when not in rehab) in slippers and outfits that looked like pj's ! People know he is nuts. But, there he was making a killing (in good times). Driving around high, or recovering from a high, half the time in his leased Lexus and pj's . When I read up on the slim requirements to get a sales license, I couldn't believe how low the standards were/are. No wonder we're in this mess. Pair the real estate / mortgage folks up with the ethically impaired, greedy Wall St. / MBA Ivy Leaguers and here we are today. Yup. This is what the public is left w/ in regards to getting "professional" assistance in making one of the most important finanical investments in their lifetime. Again, I am not indicting ALL agents or brokers. I am sure there are some decent, smart, honest, hardworking ones left who are not motivated by $$$$$ .