Keep our house or give it to bank and take dead uncles

This is a long thread, and I haven't read all of it, so I apologize if this has already been suggested.

Why not sell your uncle's house and take the money you get from that sale and dump it into your current mortgage. Boom, almost instant equity. You might even be able to refinance the remainder of the loan for a lower monthly payment.

FYI - i overpaid for my $2995 suburban but i pull lots of weight with it and have yet to have it leave me stranded. it's no powerstroke excursion but it gets the job done and has the same amount of seats and comfort.

i'd pull a 10k load with a $1000 80's big block dually any day anywhere in the country too.

Datsun1500 wrote:

Giant Purple Snorklewacker wrote: OK, so as I understand the situation: - Owe $154k, 11yrs to go, $1.1k/mo - got free $75k house but it's not what/where you want to be

His Wife has approx. 23 years left on a note at $1100 a month, payoff right now is $154K. He is saying it's only worth $100K so she will pay for 11 years before having equity. He did not get a free $75K house. His in-laws got a house worth $75K that has a balance due of $50K. His in-laws got a free $25K. He assumes they will have no problem giving it to him.

Yeah, I don't think any of us (including andrave) is very clear on the Uncle's house.

But I'm thinking D1500 is close.

Ah, I see. I look at it this way. Yes, you are walking away from a financial "commitment" with a bank. Not a person, but a company. A company who doesn't actually give two E36 M3s about you. Plus, that company will not be completely screwed by your deal; they will have the deed to a house that they can then sell to recoup some or all of their losses.

The real question is if you can go seven or more years with an essentially broken credit score.

A situation recently happened to me wherein my ex-wife decided to start missing payments on a car that we both cosigned for when we were married. I realized that I couldn't simply walk away from the loan because of the hit my credit score would take. I want to buy a house in the near future, so I had to suck up a couple of her car payments in the hopes I can actually win the money back from her in court.

andrave wrote: I guess I just look at things differently. It was a business decision. If her credit wasn't good, or the house was too expensive, they wouldn't have said "well we need to give this lady a loan so she can have a house, its the right thing to do and we are good people," they just would have said "nope, the numbers don't work, its a business decision, sorry." And right now, we could say "well the right thing to do is to keep paying even though we are well in over our heads, and just hope that things will get better even though there is no sign of that and even if they do get better we will end up paying more than the house will ever be worth," or we could say, "nope, sorry, its a business decision."

You can "look at it differently" all you want, and justify it to yourself all you want, but what you are setting up with your little comparison up there is a false dichotomy.

When you are shopping for a loan, the bank is under absolutely NO obligation whatsoever to offer you a loan. You are correct, that is a business decision, and they are free to make it any way they wish. You are also free to decide that their terms are not acceptable to you. You both go on your separate ways if you can't negotiate something mutually acceptable.

After you sign the contract, however, you have made a legal and financial commitment to each other. They lent you money under terms you agreed to. You agreed to pay them back under those same terms. The bank is under NO obligation to accept changes to those terms, unless your contract provides some kind of escape clause, which I doubt.

The two situations are completely different, and I suspect you know that. If not, you should.

So, do as you see fit, but don't pretend it's right just because you can get away with it.

bastomatic wrote: Anyway, I see two real ways to do it: Honorable way: Keep your house, and rent it out or stay there and make payments. Capitalist way: dump your house on your lender. Rent out your uncle's house, and find a cheaper place to rent yourself. If that's not possible, sell the uncle's house and keep all the money yourself.

Wow. If this is what people actually think Capitalism is, A) you're wrong; and B) well, there is no B. You're just wrong.

You act as though banks are always above reproach. They screw people over all the time if it is in the company's best interest. So why shouldn't ordinary people "screw them over" if it is in their best interest?

Sky_Render wrote: You act as though banks are always above reproach. They screw people over all the time if it is in the company's best interest. So why shouldn't ordinary people "screw them over" if it is in their best interest?

The bank didn't screw him over.

Ah, I see. I look at it this way. Yes, you are walking away from a financial "commitment" with a bank. Not a person, but a company. A company who doesn't actually give two E36 M3s about you. Plus, that company will not be completely screwed by your deal; they will have the deed to a house that they can then sell to recoup some or all of their losses.

Have you ever been to a bank? Do you think the woman behind the counter is the CEO? Corporations are made up of individuals. When someone doesn't honor their obligation to a financial institution, you're a fool to think they are "sticking it to the man." The girl behind the counter is the person who will suffer.

And again, it's not just "the bank" you're berkeleying. It's your neighbors, who are more than likely in the same situation (upside down in their house,) but who've chosen to be responsible adults, while you've chosen to be a berkeleying thief.

Funny how the stigma of "greed" and "self-interest" only seem to apply to those evil corporations.

Sky_Render wrote: You act as though banks are always above reproach. They screw people over all the time if it is in the company's best interest. So why shouldn't ordinary people "screw them over" if it is in their best interest?

How do banks screw people over?

If you agree to terms, they have not forced you to agree to them. It is your choice. They cannot change those terms after the contract is signed, unless there is a clause in the contract that allows changes, which you knew (or should have known) ahead of time.

98% of the time when I hear about how "banks screw people over", what it really means is "banks are not willing to let people off the hook for being stupid or just plain unlucky", neither of which they are obligated to do.

The other 2% of the time is if the bank is actually doing something illegal. That, of course, is illegal, and should be prosecuted fully.

Believe me, when I see big loud ads for fancy cars, new TVs, fun toys, and nice vacations, I am just as tempted as the next guy. I'm also smart enough to know my limitations. If you don't know your limitations, it does NOT mean that the people who sell you stuff are "screwing you over". Nobody can force you to take a mortgage or a car loan.

Datsun1500 wrote:

Sky_Render wrote: You act as though banks are always above reproach. They screw people over all the time if it is in the company's best interest. So why shouldn't ordinary people "screw them over" if it is in their best interest?

You said a few posts ago that you want to buy a house soon. What if the bank says they have had too many people walk away from houses so no more loans, nothing against you personally, they are just done lending money for houses. Would that be fair to you? Would you look at the OP differently at that time? Imagine you got a loan and moved in for a few years, then the bank said

People screw banks over all the time if it is in their best interest. So why shouldn't we "screw this guy over" if it is in our best interest?

Would you have an issue then?

Yeah, I already applied for a house loan once. The bank pretty much told me that. We're not interested in lending to you, even though you have a credit score of 800 and a steady income. Why? Because too many people defaulted on loans. Or the stars weren't in alignment. Or something. And, no, I look at the OP no differently. At all.

I had a friend who owned a house along with her husband. The husband lost his job, and they were no longer able to pay the mortgage. She called up the bank the day after he lost his job, explained the situation, and asked if there was anything they could do.

The bank told her to go pound sand.

Duke wrote: Believe me, when I see big loud ads for fancy cars, new TVs, fun toys, and nice vacations, I am just as tempted as the next guy. I'm also smart enough to know my limitations. If you don't know your limitations, it does NOT mean that the people who sell you stuff are "screwing you over". Nobody can *force* you to take a mortgage or a car loan.

Thats what I was forced to learn. I personally believe everyone should have to learn it at some point in their life. But, when I look at friends of mine who are a year out of college and in their first professional job, married, over their heads in student loans, over their heads in a loan on a huge house, and over their heads on new mercedes payments, and complain that they can't afford to do anything in their social life anymore, I don't have any remorse for them at all. The problem with my generation(I was guilty of this as well), is that we tend to think we have to have those things to prove something.....I have realized that is idiotic at best.

I know one person I graduated with who has already declared bankruptcy twice......

yamaha wrote: The problem with my generation(I was guilty of this as well), is that we tend to think we have to have those things to prove something.....I have realized that is idiotic at best.

I had friendly conversation with a car salesman at my bar try to sell me a car based around the idea that my Escort would ruin my financial future because I could never park it in front of my house or it would so badly hurt the value of my home that I would not make friends with neighbors.

mtn wrote:

Sky_Render wrote: You act as though banks are always above reproach. They screw people over all the time if it is in the company's best interest. So why shouldn't ordinary people "screw them over" if it is in their best interest?

The bank didn't screw him over.

Actually, they did. The banks screwed us all over by bundling bad debt with good and causing the mess that eneded up with a person buying a house on good faith being underwater by $60k a couple years later through no fault of their own. The banks got bailed out by the feds, but did they pass that bailout down to those they screwed? Not a chance.

PHeller wrote: I had friendly conversation with a car salesman at my bar try to sell me a car based around the idea that my Escort would ruin my financial future because I could never park it in front of my house or it would so badly hurt the value of my home that I would not make friends with neighbors.

That is funny......you should have shown him pictures of Ben's escort then.

Chris_V wrote:

mtn wrote:

Sky_Render wrote: You act as though banks are always above reproach. They screw people over all the time if it is in the company's best interest. So why shouldn't ordinary people "screw them over" if it is in their best interest?

The bank didn't screw him over.

Actually, they did. The banks screwed us all over by bundling bad debt with good and causing the mess that eneded up with a person buying a house on good faith being underwater by $60k a couple years later through no fault of their own. The banks got bailed out by the feds, but did they pass that bailout down to those they screwed? Not a chance.

Ok, if you are going to go that far, you might as well go farther and say that the government of the 80's and 90's screwed us by deciding that everybody should own a house if they want to, reduce the regulations, and let the banks make the lousy loans.

On the surface level though, he (or his wife) took out the loan for the house, agreeing to the terms of said loan. Nobody forced him/her to take it, and the bank (again, on the surface level) did not reduce the value of the home.

EDIT: Although I would put most of the blame on people who took loans they couldn't afford. Maybe I'm an shiny happy person. Or maybe I just know what I can and cannot afford.

mtn wrote: Ok, if you are going to go that far, you might as well go farther and say that the government of the 80's and 90's screwed us by deciding that everybody should own a house if they want to, reduce the regulations, and let the banks make the lousy loans. ... EDIT: Although I would put most of the blame on people who took loans they couldn't afford. Maybe I'm an shiny happy person. Or maybe I just know what I can and cannot afford.

I agree with both of those statements.

nocones wrote:

JohnRW1621 wrote: Meet a friend. He's a pretty good guy.

PM me your address. I will have Amazon drop ship you a copy of his book. It's not like I'm rolling in money however it really appears you and your wife need this. Following these steps did wonders for my wife and I financially.

If the OP isn't interested, I would be. Its pretty easy to manage your money when you hardly have any, but SWMBO and I are both trying to get higher paying jobs, and need the advice.

I appreciate all the suggestions and constructive criticism, to those that attacked my profession, my education, my family, or myself, well, whatever, sorry your daddy touched you like that, or whatever.

I was pretty disappointed that many people posted without any knowledge of anything being discussed, just broad speculation and assumptions, many times making up your own facts for my life without even reading the things I had already posted.

I am probably no help to you, but I will share my situation.

I bought a townhouse that I could afford back in March of '05 for 216k. Today its worth about 100k and I owe 170k. Both my wife and I are on that note. At that time we had no kids.

Fast forward to 2009 we have two kids, prices in Fl are quite close to the bottom and we went ahead and purchased a single family house for 285k. I could then and still can afford both loans. We were still leaving in the thouse while renovating the house and someone approached us about renting the thouse, so we did.

I rent the townhouse for $1200/month, which is about $200 short of the payment. Its been rented since and everyday I wonder if I should just walk away from it (I unfortunately cant*)... but at the same time I look at it as me buying that property for around $200/month.

*My wife's employer, would automatically remove her top secret clearance if she defaults on a loan.

The tenants that I have are very good, so I keep the rent at that price. I could be asking between 1250 and 1350. At one point I entertained the idea of renting it for less than $1k just to rent it fast, but several people advise against renting for less than $1k as the tenants in that range are usually problematic.

J

Slippery wrote: I am probably no help to you, but I will share my situation. I bought a townhouse that I could afford back in March of '05 for 216k. Today its worth about 100k and I owe 170k. Both my wife and I are on that note. At that time we had no kids.

Yahoo Florida. I moved there in 2004, rented. Built a house in 2005 for $199k and owned it for 3 hours, sold for $225k. Good times, too good to be true. Paid tax on the short term gain.

Bought the next one in 2006 for $230k, putting $46k down. In 2010, I had to move to stay employed, sold house for $155k.. wrote check for $19k at closing. I must say, that sucked HARD. All the money I ever saved fixing up & selling 4 houses was gone in that last transaction. Life savings, at 39 basically shot down to nothing (outside of 401k).

Had to start over. Creative mortgage in ATL guy allowed me to buy current house with only 5% down but no PMI (bought 4% market rate UP to 4.5% to do it). Did this by having 810 credit, wife 810 credit with solid payment history and 2 good jobs. No 7-10 year wait & a prayer that it'll get better before it gets worse.

I often wonder how it would have gone if I let the FL property go back to the bank.. but in the end I'm free of it, and didn't berkeley myself over. Paid some stupid tax for buying in a bubble. Won't do that again.

Some good advice here, some delivered with a ball peen hammer. Take it ALL and learn. Truth hurts sometimes.

Datsun1500 wrote:

andrave wrote: I appreciate all the suggestions and constructive criticism, to those that attacked my profession, my education, my family, or myself, well, whatever, sorry your daddy touched you like that, or whatever. I was pretty disappointed that many people posted without any knowledge of anything being discussed, just broad speculation and assumptions, many times making up your own facts for my life without even reading the things I had already posted.

We are just taking the facts as you presented them. You are an out of work Lawyer, with bad credit, that wants to ruin your wife's credit by walking away from a loan you can afford. That is how you presented it, not us.

But it is OK... because big bad banks are evil... and they gots it coming...

not to mention there is stuff he wants..

Seriously man... You need to take a very deep introspective look into yourself and see if you truly like what is in there..

What happens when you have no equity in your marriage.. You find out she isn't exactly what you hoped for and she is way more work than you think she is worth, and there is a more attractive girl just right down the street.... and the cost seems lower..

Oh yeah right.. totally different situation... You would never do that.............

yes you would.

You posted on a internet forum encouraging people to offer their thoughts..... and listen to you respond... people are reacting to the image you projected.. Your words.. They didn't just come out of nowhere and start laying this stuff on you... They are reacting to what they understand about who you are today.

and you are only offering a value system which doesn't refute their line of thinking.

Get to know SVrex... This is a good guy and a strong man. Take him up on his offer.

You asked for our opinion. It might be that we, collectively don't understand what's really going on and if we had all the information we would give you an different answer. It's also possible that you didn't get the response you expected for a good reason. It's really up to you to decide if you want to read through the responses and figure out if there's some wisdom in them. Maybe there is, maybe there isn't.
One of the big reasons to ask people for advice is because they can look at your life from the outside, whereas you can only look at it from the inside. Sometimes they can see things about you that you have trouble seeing.

Datsun1500 wrote: We are just taking the facts as you presented them. You are an out of work Lawyer, with bad credit, that wants to ruin your wife's credit by walking away from a loan you can afford. That is how you presented it, not us.

In reply to ronholm:

You're making me blush.