Help! Really upside down, and ready to drown

[daniel]

I saw this website in the Press Enterprise. I live in Riverside CA. I bought my home brand new just as the market was peaking (2005) for 650. I borrowed against it and used some credit to finish the yard and home. Now i owe 750 on the house. Well, guess what my house is now worth around 450 or less. Talk about a fall from grace. I really want to keep the house, is there anything going on for the homeowners that have really suffered equity wise? I heard talk there maybe. My loan is actually pretty good, its 50 yrs and 10 yrs fixed, and its only a little over a yr. in. But all the lost equity is killing me, because i cant get rid of all the unsecured debt.

Thank you for joining the forum....and welcome.....

There is talk, it is talk, there is no specific way that they can or will reduce principle for the borrower, I have posted and posted that it is kind of like the government going into Walmart and saying OK you can not charge 9.99 for a widget...you have to charge 2.99. That is just not going to be well accepted at Walmat/Wally World would it, the same can be said to an investor, well, you have to take 200,000.00 less than what you lent out cash money.....

Then there are the issues of standard accounting procedure and regulatory issues, with the alphabet soup of regulatory agencies, OTC, FDIC, FSLIC, SEC, OTS, etc...they have to change all of their rules.

Then who gets the principle reduction if some of the investors are willing and the others are not how to tell one guy, OK, 200,000.00 off and his neighbor you tell, to bad you can't have it.

I will say this, if you are able to pay on the original debt and can make the payment as originally established the talk is, no there will not be any principle reduction....that is the information that I was privy to yesterday in conversation regarding this issue, if it does come about it will only be for distressed homeowners, not the homeowner that is currently able to cope financially with the payment stream and day to day life.

[daniel]

Thanks. Its getting tough, espcially with no bottom insight. almost at the point to where i could just walk away. Maybe short sell it, if thats even possible, but then would Chase my lender, forgive the 350 loss. And if they didnt, what would my responsibility be?

Chase is reasonable, however there has to be the hardship reflected to get them to "forgive" all or even some of the Short Amount.....that would be the issue that you would have to fight. They are requiring financial hardship that is extenuating and beyond the borrower's control....

The problem is that this has now seeped over to A paper issues, that is not just the primary toxic loans that reset and the borrower had no capacity to handle the financial responsibility that was then laid out. The foreclosure and market bubble bursting with the advent of no "easy" money loans any more...has now affected everyone, this is what I preached last year, my nightmare visited.

We can not, now criticize anyone, what I said then was to those who thought they were immune from this disaster, think carefully, we are all going to be seriously and horribly adversely impacted by tax issues, valuation of our mansions issues, school issues, infrastructure issues, police, etc....this is a total melt down.....aha, the reality is dawning on a whole separate segment of the demographics........oooopppppssss......sorry, but this situation was very predictable....I have seen it before in a regionalized environment. This is not getting better, check out the Sacramento area, they are looking at huge lay offs in the city personnel, Arizona is looking at huge tax issues and deficits, it is going to get very, very uncomfortable and as more people look at their homes and realize the "upside" down issue.....oh my....

Oh what a tangled web we weave when first we practice to lend money foolishly and support a smoke and mirror market......

You are not the first and certainly not the last to look at these matters, and it will get more and more prevalent....the question is are even short sales going to work down the road.....the equations that run through my head are fairly unpleasant....