Decided to walk - Its all business

fradchad

LoanSafe Member
Jul 19, 2010
33
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0
First of all. If the market was doing great I have no doubt in the world that the bank would foreclose in a heartbeat if I could not make a payment. No "mods" or "shortsales". They would push you outta the way and make their profit.

Here is where I am at -

In Washington and bought a condo at 230k and similar condos cant sell at 150k in my area. School district is not great and I have a 2 1/2 year old.

Stupid decision to buy, but we did. The times were great and we really wanted to flip this condo in 3 years and get house. Well its been 3 years and the market is still sinking. I did the math on optimal appreciation and it will take 10-13 years to get back up to value, historically.

All other decisions like short sale, deed in lieu, and home loan mod... For the bank... = win, win, win. For me = suck it up.

No thanks! I don't want this house anyway. If I walk I can pay off my car, get a real house to rent for half the cost, and have about 10k of savings before my next child.

What about the bank and your moral responsibility? That flew out the window when wall street screwed me. I am looking out for me and my family. So in the end I am in a non-recourse state and have a power of sale in my mortgage.

7 years of credit purgatory here I come. At least me and my family will have a better life with less stress and money to spend. No living paycheck to paycheck to "do the right thing."

No regrets. Oh and the calls have started and I am 4 days late. That was fast.
 

CA_NA

LoanSafe Member
Mar 7, 2010
238
1
18
Good luck to you and your family! The banks don't want to help us, they want to help themselves!
 

calgirl67

LoanSafe Member
Sep 2, 2009
640
4
0
Good luck - you will be ok in the end, everything will be better than it is now! Oh yeah, expect some of the phone calls to be "we want to help you with a loan mod"...

Don't give 'em another single red cent!!!
 

fradchad

LoanSafe Member
Jul 19, 2010
33
0
0
Well they quit calling me like crazy and now they have started on the wifes phone. After the first 20 calls you would think they get the hint. Thank God for caller ID.
 

vvr711

LoanSafe Member
Aug 2, 2010
3
0
0
I'm in a very similar situation. Purchased home in 2006. Refinanced in 2008 to get out of the interest only loan. Then BAM...The market in Atlanta tanked. I paid 132K for my townhome and the unit next door which basically has the same lay out and features just sold for $59K. All I could do was laugh! I'd been contemplating the decision to walk away for awhile but I kept getting the whole moral debate thing. Finally I weighed the negatives with the negatives and decided it would make more sense to stop paying my mortgage and apply that money towards paying down my other debts and when they foreclose I can move into a much bigger house to rent than continue to sink money in a house that's basically not worth anything. The area isn't improving and with the market the way it is it's probably not going to get any better anytime soon. My credit score is around 700 and I have a copy of my current/good report so when I do begin looking for a rental I have proof of what my score once was before this mess. I'm at peace with my decision. I do have concerns about the recourse implications since my original was refinanced but I'll cross that bridge when or even if I get to it. My loan now is with BoA and that wasn't by choice. The company I refi with sold the loan.
 

vvr711

LoanSafe Member
Aug 2, 2010
3
0
0
I'm in a very similar situation. Purchased home in 2006. Refinanced in 2008 to get out of the interest only loan. Then BAM...The market in Atlanta tanked. I paid 132K for my townhome and the unit next door which basically has the same lay out and features just sold for $59K. All I could do was laugh! I'd been contemplating the decision to walk away for awhile but I kept getting the whole moral debate thing. Finally I weighed the negatives with the negatives and decided it would make more sense to stop paying my mortgage and apply that money towards paying down my other debts and when they foreclose I can move into a much bigger house to rent than continue to sink money in a house that's basically not worth anything. The area isn't improving and with the market the way it is it's probably not going to get any better anytime soon. My credit score is around 700 and I have a copy of my current/good report so when I do begin looking for a rental I have proof of what my score once was before this mess. I'm at peace with my decision. I do have concerns about the recourse implications since my original was refinanced but I'll cross that bridge when or even if I get to it. My loan now is with BoA and that wasn't by choice. The company I refi with sold the loan.
 

dccubed

LoanSafe Member
Jun 8, 2010
22
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0

Moe Bedard

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Your figures as far as the market coming back could be off a little. Once the economy comes back, a lot of buyers will be back. Much of the depreciation is due to the fact of no buyers. That means that once the normal number of buyers returns to the market, some of the depreciation will immediately be erased. What I am saying is that right now, prices are undervalued in historic relation to income. I am not saying that prices will rebound to the top, but an increase of 20% is easily possible. After that, if the economy continues to move along, another 5-6 yrs and prices will be back right near the peaks. This has happened about once every 10-15 yrs, albeit not as severe.

A run up over a 6-7 yr period, a collapse of 25%, a couple slow years of modest appreciation, then another steady climb. This time it is deeper and steeper, but that means it may be a steeper and faster climb back up. There are a lot of first time would be buyers just waiting for the economy to tell them it is time to buy.
 

fradchad

LoanSafe Member
Jul 19, 2010
33
0
0
Your figures as far as the market coming back could be off a little. Once the economy comes back, a lot of buyers will be back. Much of the depreciation is due to the fact of no buyers. That means that once the normal number of buyers returns to the market, some of the depreciation will immediately be erased. What I am saying is that right now, prices are undervalued in historic relation to income. I am not saying that prices will rebound to the top, but an increase of 20% is easily possible. After that, if the economy continues to move along, another 5-6 yrs and prices will be back right near the peaks. This has happened about once every 10-15 yrs, albeit not as severe.

A run up over a 6-7 yr period, a collapse of 25%, a couple slow years of modest appreciation, then another steady climb. This time it is deeper and steeper, but that means it may be a steeper and faster climb back up. There are a lot of first time would be buyers just waiting for the economy to tell them it is time to buy.
Agreed!. Still to long for me... I want to have another child before 7 years and could not do that and afford the place. But I completely agree even your optimistic best we are looking at 5-7 years before we can regain value. Thats still an "if". Like when we bought the place, "if" it gets value we can get a real house. In that time I can pay off my cars, have another child, live in a house (rent), and my credit will have recovered.

One very important thing I have learned - save for your down payment. We did not and its the PMI that is adding insult to injury.

So I dont plan to buy a house again for a LONG time. I want to buy a house AFTER I save the down payment myself.

The thing about learning the hard way is you take the test before you learn the lesson. Lesson learned :)

Thanks for all the support :)
 

dccubed

LoanSafe Member
Jun 8, 2010
22
0
0
Menace, I think you are awfully aggressive in your thoughts on price appreciation. There are always a lot of "first time buyers" in the market. Are you a real estate agent?
 

mrange25

LoanSafe Member
Nov 1, 2009
351
1
0
I really liked your first post fradchad. You pretty much summed up what I've been feeling.

A lot of people bring up morals and ethics about "defaulting on a contract" and i did feel a little bit bad about it.

The only code of laws that really mean anything are from God, not from the deity "Bank of America" or "Chase".

The price of default is that they get their collateral, plain and simple. And when and if the bank belly aches and cries over my default and will light up a cigarette and respond in the coldest fashion possible "It's just business" Good luck to you!

My story:

last payment 3/1/10
filed chapter 7 6/29/10 (not because i was forced to)
Present: still livig in home, waiting for discharge. I expect to have 10 grand saved up by the time we get kicked out (probably in 2011), to start new life in cheap rental.
 

dccubed

LoanSafe Member
Jun 8, 2010
22
0
0
my stats:

last payment 06/01/09
filed chapter 7: only if necessary
Present: still living in home, waiting for....acceptance of my offer on my terms, no BS
 

Moe Bedard

Call 1-800-779-4547
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Not a real estate agent, though I was 20 yrs ago. I have owned multiple properties over the past 30+ yrs, and seen the markets rise and fall over and over. As I stated, this time I think houses are undervalued according to average income, and are priced at historic lows. When/if the econmoy recovers(2 yrs?), that equates to an almost instantaneous ten percent rise just because the number of buyers returns to normal in relation to selers. Right now there are so many more properties than buyers, including all the foreclosures. When the supply eturns to normal, and buyers return to the market, prices will rise to the point that the highest sale price of a comp will not have to be undercut to make a sale.

If I had cash, I would be buying now. There are properties you could buy and rent and have positive cash flow with interest rates and prices at these lows.

There could be more shocks to the economy, which could drastically slow things down, or even reduce prices further. But as long as the economy continues to grow, we have come awfully close to the floor, with nowhere to go but up.
 

sailordude

LoanSafe Member
Jul 25, 2010
258
2
18
Baltimore, MD
It's hard to judge these things; but I don't think we are near the bottom of the economy. I think the long feared "double dip" is inevitable and on us. Whatever recovery we've seen so far seems artificial and limited.

Economics philosophy is about equal to politics and religion when it comes to polite conversation; but I believe that nationally we are doing everything wrong to encourage an economic recovery. It might happen anyway (it surely will eventually); but I don't expect it any time soon.

My dismal prediction is at LEAST two years, and probably four before we see noticeable improvement (and I'll bet when a real recovery finally does happen, it will happen whiplash quick). In the meantime, for markets that haven't yet bottomed out, I wouldn't be surprised by another 20% drop in home values.

Of course, I'm not an economist. But then, economists seem to have about the same long term predictive ability as a meteorologist. :rolleyes:
 

mrange25

LoanSafe Member
Nov 1, 2009
351
1
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I think the economy will get worse but before it gets better. All of these stimulus programs are just to try to limit the pain. Economic cycles are just as strong as gravity and cannot be stopped.

We have gone through the biggest boom in history, so I think we are in for long term economic pain. People's mortgages are outliving them.
 

fradchad

LoanSafe Member
Jul 19, 2010
33
0
0
So they have started calling me at work. Still always a stupid computer ROBO helper. Yea, I'm gonna stay on the line. They are finally getting the hint. Got a letter in the mail and forgot to open it. :p I should do that tonight.

Saving all my money and just basically squatting in my own house. I gather that it takes about a year so I am in for the long haul. The hard part is keeping the at bay from wanting to rent a nice house.... Gotta save all our FREE RENT this year :p
 

fradchad

LoanSafe Member
Jul 19, 2010
33
0
0
So they have started calling me at work. Still always a stupid computer ROBO helper. Yea, I'm gonna stay on the line. They are finally getting the hint. Got a letter in the mail and forgot to open it. :p I should do that tonight.

Saving all my money and just basically squatting in my own house. I gather that it takes about a year so I am in for the long haul. The hard part is keeping the at bay from wanting to rent a nice house.... Gotta save all our FREE RENT this year :p
 

DBarr13447

LoanSafe Member
Jul 19, 2010
530
5
0
About the 7 year purgatory...there are SO many of us here, don't you think banks will eventually have to change that timeline?
 

OlegWild

LoanSafe Member
Feb 10, 2010
62
0
0
I am thinking myself to get the hell out of my apartment (remove the whole kitchen, furniture, etc.). I have one bedroom apartment and pay what I would pay for three bedroom apartment/townhouse right now here - Stamford, CT. My choices would be unlimited right now on this market.
At present time I am underwater 35K. Tried to do HAMP and then got out of that program because of negative credit influence (that was a nightmare for a while). To refinance under HARP terms BofA said to pay $5000 closing costs to save $149 per month. They do not want to cancel my monthly PMI in amount $203 either. I can not refinance it with any different lender (with better terms) because I have PMI and MUST go ONLY through f&cking Bank of America.
At this point I am almost ready to give up with this BS. If not my excellent credit I would do it a long time ago.