V8 Beast Posted April 4, 2010 Report Share Posted April 4, 2010 Let say the value of your house drops by $30k. During the time you have lived there you have paid $15k towards principal. What happens with the $15k difference after the home is sold? Quote Link to comment Share on other sites More sharing options...
V8 Beast Posted April 4, 2010 Author Report Share Posted April 4, 2010 And thats why you never made it as a realtor Quote Link to comment Share on other sites More sharing options...
LJ Posted April 4, 2010 Report Share Posted April 4, 2010 it depends on what your mortgage amount is. I mean, if you sell your house your mortgage gets paid off first thing. Quote Link to comment Share on other sites More sharing options...
KillJoy Posted April 4, 2010 Report Share Posted April 4, 2010 It is not the Bank's fault you made a poor "investment" choice. It is YOUR debt. YOU pay it.... KillJoy Quote Link to comment Share on other sites More sharing options...
HAOLE Posted April 4, 2010 Report Share Posted April 4, 2010 Short Sale Quote Link to comment Share on other sites More sharing options...
Nitrousbird Posted April 4, 2010 Report Share Posted April 4, 2010 Very simple. You sell the home, and after all of the fee's (and it's a lot, 3% to your agent, 3% to buyers agent, property taxes in arrears (I know I spelled that wrong), warranty as the buyer ALWAYS wants that, standard closing fees) you take what is left. If what is left is more than the balance of the mortgage, you get that cash. If it is less, then YOU have to bring that cash to closing to make up the difference. I just got a low-ball offer on my Reynoldsburg house, but I would have had to bring 10k to the table (there is nothing in Reynoldsburg on the market with 3 bed / 2 bath / 2 car garage for what they offered). I obviously said no, especially since the market is going to be the best it will be all year this month. Quote Link to comment Share on other sites More sharing options...
V8 Beast Posted April 4, 2010 Author Report Share Posted April 4, 2010 (edited) It is not the Bank's fault you made a poor "investment" choice. It is YOUR debt. YOU pay it.... KillJoy Very simple. You sell the home, and after all of the fee's (and it's a lot, 3% to your agent, 3% to buyers agent, property taxes in arrears (I know I spelled that wrong), warranty as the buyer ALWAYS wants that, standard closing fees) you take what is left. If what is left is more than the balance of the mortgage, you get that cash. If it is less, then YOU have to bring that cash to closing to make up the difference. I just got a low-ball offer on my Reynoldsburg house, but I would have had to bring 10k to the table (there is nothing in Reynoldsburg on the market with 3 bed / 2 bath / 2 car garage for what they offered). I obviously said no, especially since the market is going to be the best it will be all year this month. Thanks for answering my question Joe. Edited April 4, 2010 by V8 Beast Quote Link to comment Share on other sites More sharing options...
V8 Beast Posted April 4, 2010 Author Report Share Posted April 4, 2010 (edited) Short Sale So based on what Joe said if you dont have the money you cant close. Short sale would be the only way outside of foreclosure. With the way the housing market was last year I know people have been getting raped on the value of their homes because it was the only way they would sale. I guess I better leave a note before people read into things that are not there. I AM NOT TALKING ABOUT MY HOUSE. My house went down in value by $8k and Ive lived here for 7 years. If I sale my home I would make a profit. I was curious for the sake of simply being curious. I didnt know if it was like a car where you could carry over negative equity into a new mortgage (if the same company finances another house). Edited April 4, 2010 by V8 Beast Quote Link to comment Share on other sites More sharing options...
Trouble Maker Posted April 4, 2010 Report Share Posted April 4, 2010 So you're saying you would owe 15K more than what the house would sell for, in this hypothitical situation. My understanding is that someone has to come to the table with that money. Just like selling a car, you can't sell the house and give the bank less than what it's worth. And you will get less than what the house sells for with the 7% going to the relator's. Be ready to come to closing with 20K. Which sounds like a horrible idea even if you have the money. Just stay in your house for a few more years. EDIT: Joe already said it better than I did, but I hadn't read that yet. I see now that you are not talking about yourself. I wouldn't liken this to trading a car in and rolling over the negative equity. I think that should be an illegal predator practice anyways. I'm sure it's not legal in the housing market or you would see it happen. You are not trading your house into a bank, you are selling it to another individual. So if you sell your car to another individual, but have a loan on it. You have to pay it all off, then you get the title to hand over to the buyer. Quote Link to comment Share on other sites More sharing options...
Trouble Maker Posted April 4, 2010 Report Share Posted April 4, 2010 It is not the Bank's fault you made a poor "investment" choice. It is YOUR debt. YOU pay it.... KillJoy Like V8 Beast said. Nowhere did he ask about it being forgiven. He was simply asking what happens. Even if it was him in the situation he would have simply been trying to educate himself about the situation he was in. In addition, I will say that I think moving into a house without a decent down payment is a bad idea for these very reasons. That's why we are saving up now, but not 'jumping' on the $8k. I will also say that moving into a neighborhood, city, or state and buying a house where there is obviously a big bubble is also a very bad idea. Though sometimes life situations dictates that you do things that might not be the best decisions in the long run. Despite that I don't think anyone can sit here and point fingers that someone made a bad investment because there was an unforeseeable crash in the housing market. That's just kind of a silly. Also, if someone bought a house before the crash, and is still making payments on their house, it's not their fault the banks and other bad home buyers who've foreclosed lately fucked up the market. Quote Link to comment Share on other sites More sharing options...
KillJoy Posted April 4, 2010 Report Share Posted April 4, 2010 He was simply asking what happens. It is YOUR debt. YOU pay it.... KillJoy Quote Link to comment Share on other sites More sharing options...
kirks5oh Posted April 4, 2010 Report Share Posted April 4, 2010 i should have bought a house in tampa before i left last year. the market down there absolutely crashed. there were 100 foreclosures in the subdivision we were renting in. houses that were 320k were going for just over 200k when we left---amazing houses that were 2-3 years old with top-end cabinets, granite, good appliances--2300 sq ft, in a gated community Quote Link to comment Share on other sites More sharing options...
HAOLE Posted April 4, 2010 Report Share Posted April 4, 2010 So based on what Joe said if you dont have the money you cant close. Short sale would be the only way outside of foreclosure. With the way the housing market was last year I know people have been getting raped on the value of their homes because it was the only way they would sale. I guess I better leave a note before people read into things that are not there. I AM NOT TALKING ABOUT MY HOUSE. My house went down in value by $8k and Ive lived here for 7 years. If I sale my home I would make a profit. I was curious for the sake of simply being curious. I didnt know if it was like a car where you could carry over negative equity into a new mortgage (if the same company finances another house). You will only know how much value you have lost when you get offers. Up here in hillbilly hell we have got killed. I may have lost about 60K in value compared to 3 years ago. It sucks, but I cant change it. I will just have to ride it out. Quote Link to comment Share on other sites More sharing options...
koolrayz Posted April 4, 2010 Report Share Posted April 4, 2010 You will only know how much value you have lost when you get offers. Up here in hillbilly hell we have got killed. I may have lost about 60K in value compared to 3 years ago. It sucks, but I cant change it. I will just have to ride it out. I feel your pain on this one. We bought the house were in 4 years ago in july and ended up renting the house we moved out of (in Ontario close to the closed GM plant) to my inlaws. I cant imagine what I would lose If I had to sell these two houses. Quote Link to comment Share on other sites More sharing options...
V8 Beast Posted April 4, 2010 Author Report Share Posted April 4, 2010 That sucks that so many people are stuck in their homes. I have 10 homes for sale in my neighborhood of 70 houses. In the last 3 years not a single one has sold and only 3 are being rented. I know of 5 that forclosed and ran off. What happens to those people when they run off and dont pay? If its only a credit impact I dont see why more people arent taking the less responsible way and bailing. Quote Link to comment Share on other sites More sharing options...
Stallion Motorsports1647545491 Posted April 4, 2010 Report Share Posted April 4, 2010 i should have bought a house in tampa before i left last year. the market down there absolutely crashed. there were 100 foreclosures in the subdivision we were renting in. houses that were 320k were going for just over 200k when we left---amazing houses that were 2-3 years old with top-end cabinets, granite, good appliances--2300 sq ft, in a gated community HUGE +1 it is like that all over florida. the market will come back, florida is just too nice. we were there last october, and almost made a serious financial move to put a down payment on a awesome summer/vacation/when i get old home. the house ended up selling 3 months later for $4,500 more than our offer. right now 175k-250k puts you in a baller house, in almost any city. tom Quote Link to comment Share on other sites More sharing options...
HAOLE Posted April 4, 2010 Report Share Posted April 4, 2010 I feel your pain on this one. We bought the house were in 4 years ago in july and ended up renting the house we moved out of (in Ontario close to the closed GM plant) to my inlaws. I cant imagine what I would lose If I had to sell these two houses. Yea, the mansfield area has taken a real beating, I have a friend that has a practice there and he is crying right now. Quote Link to comment Share on other sites More sharing options...
Sam1647545489 Posted April 5, 2010 Report Share Posted April 5, 2010 That sucks that so many people are stuck in their homes. I have 10 homes for sale in my neighborhood of 70 houses. In the last 3 years not a single one has sold and only 3 are being rented. I know of 5 that forclosed and ran off. What happens to those people when they run off and dont pay? If its only a credit impact I dont see why more people arent taking the less responsible way and bailing. This is what cause all the problems we are having right now is people like the ones in your neighborhood. To many people trying to buy house that they and the lenders know cant afford but still they got the money to buy it and buy it they did. Fuckers fucked it all up for everyone else. Luckily I was able to rent my previous house which was way less then I could afford and the current one we got off of a sheriff sale and already have well over 50k in equity in it even in a shitty market. We plan on staying here for another 5 more yrs, once the market comes back by then, sell both and buy another cash. Quote Link to comment Share on other sites More sharing options...
KillJoy Posted April 5, 2010 Report Share Posted April 5, 2010 This is what cause all the problems we are having right now is people like the ones in your neighborhood. To many people trying to buy house that they and the lenders know cant afford but still they got the money to buy it and buy it they did. Fuckers fucked it all up for everyone else. Luckily I was able to rent my previous house which was way less then I could afford and the current one we got off of a sheriff sale and already have well over 50k in equity in it even in a shitty market. We plan on staying here for another 5 more yrs, once the market comes back by then, sell both and buy another cash. This! :thumbup: KillJoy Quote Link to comment Share on other sites More sharing options...
V8 Beast Posted April 5, 2010 Author Report Share Posted April 5, 2010 This is what cause all the problems we are having right now is people like the ones in your neighborhood. To many people trying to buy house that they and the lenders know cant afford but still they got the money to buy it and buy it they did. Fuckers fucked it all up for everyone else. Luckily I was able to rent my previous house which was way less then I could afford and the current one we got off of a sheriff sale and already have well over 50k in equity in it even in a shitty market. We plan on staying here for another 5 more yrs, once the market comes back by then, sell both and buy another cash. I live in a Dominion/MI area. I was a little hesitant at first about buying my house. I remember them asking me how much money I planned to be making in 3 years before offering the payments that ramp up. I had to tell them it wasnt the price it was the lack of a full basement that made me hesitant. I could imagine how many people they talked into financing more than they could afford. I'm going to chill in my house for about 3 more years then I'm upgrading to a house in Dublin. Its amazing how much I can save up when I'm not throwing all my fun money at cars Quote Link to comment Share on other sites More sharing options...
Mallard Posted April 5, 2010 Report Share Posted April 5, 2010 That sucks that so many people are stuck in their homes. I have 10 homes for sale in my neighborhood of 70 houses. In the last 3 years not a single one has sold and only 3 are being rented. I know of 5 that forclosed and ran off. What happens to those people when they run off and dont pay? If its only a credit impact I dont see why more people arent taking the less responsible way and bailing. The banks can come after you YEARS down the road for the money you owe. The rules are goverened by the state's, with some being worse then others. What most people don't realize is that the same holds true in a Short Sale. Usually the bank will have you sign a form that says you understand you are liable for the debt, and they can decide to come after you for it for x number of years. In Florida the banks have up to 5 years to file for a deficiency judgement, and once granted they can attempt to collect for the next 20 years. Some states are tighter. Banks can tap your accounts or your pay check in order to recover the funds, with interest. I thought I heard of another state where the bank had x years past the original term of your loan to come after the debt. (Meaning if you had 25 years left on your mortgage they had 25+x years to get the money back) Here's one article about it. It's been in our local news a lot recently because of the large number of forclosures and short sales in MI. You could search the http://www.freep.com page for the week long series they had, if you need to find more info for your hypothetical, http://finance.yahoo.com/news/Mortgage-lenders-pursue-cnnm-3107909798.html?x=0 The number of deficiency judgements being filed by the banks are increasing, and people that 'strategically foreclosed' are going to be financially f^c#ed for quite some time. Quote Link to comment Share on other sites More sharing options...
V8 Beast Posted April 6, 2010 Author Report Share Posted April 6, 2010 The banks can come after you YEARS down the road for the money you owe. The rules are goverened by the state's, with some being worse then others. What most people don't realize is that the same holds true in a Short Sale. Usually the bank will have you sign a form that says you understand you are liable for the debt, and they can decide to come after you for it for x number of years. In Florida the banks have up to 5 years to file for a deficiency judgement, and once granted they can attempt to collect for the next 20 years. Some states are tighter. Banks can tap your accounts or your pay check in order to recover the funds, with interest. I thought I heard of another state where the bank had x years past the original term of your loan to come after the debt. (Meaning if you had 25 years left on your mortgage they had 25+x years to get the money back) Here's one article about it. It's been in our local news a lot recently because of the large number of forclosures and short sales in MI. You could search the http://www.freep.com page for the week long series they had, if you need to find more info for your hypothetical, http://finance.yahoo.com/news/Mortgage-lenders-pursue-cnnm-3107909798.html?x=0 The number of deficiency judgements being filed by the banks are increasing, and people that 'strategically foreclosed' are going to be financially f^c#ed for quite some time. I see these same people filing for bankruptsy and not paying them anything. Its a damn shame... Quote Link to comment Share on other sites More sharing options...
BloodRed Posted April 6, 2010 Report Share Posted April 6, 2010 I see these same people filing for bankruptsy and not paying them anything. Its a damn shame... And even the bank can get them there. My wife does this daily for the local bank she works for. If the bank gets judgement for the deficiency balance before the bankruptcy is closed, they will normally be the first person to get money from the bankruptcy. Also it is normally stated on the deficiency balance paperwork. And most bank will sue for the deficiency balance if it is not paid in full within about 30 days after the sale. As soon as the bank gets judgement for the deficiency balance, they will start garnishing your wages to get there money. But of course, if you work with your bank from the beginning and you are honest, they will do everything they possibly can do to keep you in your home or for you to make some payments for the balance due. Quote Link to comment Share on other sites More sharing options...
Mallard Posted April 6, 2010 Report Share Posted April 6, 2010 But of course, if you work with your bank from the beginning and you are honest, they will do everything they possibly can do to keep you in your home or for you to make some payments for the balance due. I don't believe this one bit. They won't talk to my co-worker about a short sale until he stops making payments, but when that happens his credit is hit. He's been trying to proactively work with his bank but they won't do anything. (he has a balloon that's up next March, and the amount due is 20% more then the house was appraised at). Quote Link to comment Share on other sites More sharing options...
BloodRed Posted April 6, 2010 Report Share Posted April 6, 2010 (edited) I don't believe this one bit. They won't talk to my co-worker about a short sale until he stops making payments, but when that happens his credit is hit. He's been trying to proactively work with his bank but they won't do anything. (he has a balloon that's up next March, and the amount due is 20% more then the house was appraised at). Ok now that is a tough one there. Balloons are very risky if you can't flip the house before it is up. His best bet is trying to find someone that will refinance the mortgage and that is probably going to be damn hard to find someone that would be willing to do it. The bank is probably not willing to work on a short sale because the guy couldn't afford to pay the deficiency balance. Also another thing that might be coming into play is the type of loan he has. Say if it is an FHA loan, banks don't have much room they can give people since FHA loan regulations are set by the government, not the bank. The bank can only do what the FHA loans allow them to do. Edited April 6, 2010 by BloodRed Quote Link to comment Share on other sites More sharing options...
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