patrick.net

You guys are being pretty harsh on jrc. In my opinion, he did everything right. Huge down payment; probably had more than enough income to support a 400K mortgage.

Honestly he should have done more market research and realized that we had a bubble at the time of purchase, but he didn't.

In my opinion - try as hard as possible to remove all emotion and "morality" from the question - your house is an investment - do what any investor does and analyze the pros and cons of strategic default. If it makes sense to walk away and take the credit hit instead of sinking more money into a negative equity situation - then walk.

The people that really make me want to reach out and throttle them are the idiots in the NYtimes article - bragging about how now that they don't have a mortgage payment they can eat out at Outback steakhouse and keep spending all the money they shouldn't have... complete morons.

Smart strategic defaulters are living for 2 years rent free and saving every penny for their retirement. Stupid (most likely extremely obese) bubbletards are eating out at Outback and will have negative net worth their entire life on this planet - we really need to take the safety labels off everything and let the gene pool get cleaned out a bit... ;-)

For those who gambled and lost, no I don't think it's to be expected that the bank would reduce their principle. However, for those who can prove fraud or at least predatory lending, perhaps it is correct to force banks to reduce principle.

Unless you were really into researching the housing industry and all its warts and legal problems by AT LEAST 2001, you would be unlikely to have found evidence in time that housing was in a bubble, know to avoid it, and realize that industry forces were driving it. Buyers were fooled in droves. Blaming buyers is EASY but it's way over simplified and in some cases wrong.

Homeowners who think their houses were worth those high prices are understandably mad, and right to be angry at the industry that misled them, but they are also in denial. Their houses were never worth that, and will not likely be again unless incomes rise to the levels where prices are at 2 to 3 times the median income. The attemps to make prices rise again are only detrimental to real recovery. Housing's inflation was created to benefit the real estate and mortgage industry, period. IMO many crimes were committed that will never be punished because the top players have been paying fines to the govt in lieu of criminal charges. The little businesses, the small builders, brokers, real estate agents, etc, caught and sentenced, are blips on the radar, soon to be forgotten if they were ever noticed, (by most people). Most are never caught because law enforcement doesn't have the resources, and unless a bank is also a victim, law enforcement often tells people to sue in civil court, individual cases which rarely pay enough to interest lawyers.

Don't pay a dime and wait for them to send you a letter.

From what I've heard, the loan mods are a scam. The bank is reimbursed the cost of the temp write down, that's why most of them only go 3 months before the bank makes you jump through the hoops again.

lyoungblood says

You guys are being pretty harsh on jrc. In my opinion, he did everything right. Huge down payment; probably had more than enough income to support a 400K mortgage.
Honestly he should have done more market research and realized that we had a bubble at the time of purchase, but he didn’t.
In my opinion - try as hard as possible to remove all emotion and “morality” from the question - your house is an investment - do what any investor does and analyze the pros and cons of strategic default. If it makes sense to walk away and take the credit hit instead of sinking more money into a negative equity situation - then walk.
The people that really make me want to reach out and throttle them are the idiots in the NYtimes article - bragging about how now that they don’t have a mortgage payment they can eat out at Outback steakhouse and keep spending all the money they shouldn’t have… complete morons.
Smart strategic defaulters are living for 2 years rent free and saving every penny for their retirement. Stupid (most likely extremely obese) bubbletards are eating out at Outback and will have negative net worth their entire life on this planet - we really need to take the safety labels off everything and let the gene pool get cleaned out a bit…

lyoungblood says

You guys are being pretty harsh on jrc. In my opinion, he did everything right. Huge down payment; probably had more than enough income to support a 400K mortgage.
Honestly he should have done more market research and realized that we had a bubble at the time of purchase, but he didn’t.
In my opinion - try as hard as possible to remove all emotion and “morality” from the question - your house is an investment - do what any investor does and analyze the pros and cons of strategic default. If it makes sense to walk away and take the credit hit instead of sinking more money into a negative equity situation - then walk.
The people that really make me want to reach out and throttle them are the idiots in the NYtimes article - bragging about how now that they don’t have a mortgage payment they can eat out at Outback steakhouse and keep spending all the money they shouldn’t have… complete morons.
Smart strategic defaulters are living for 2 years rent free and saving every penny for their retirement. Stupid (most likely extremely obese) bubbletards are eating out at Outback and will have negative net worth their entire life on this planet - we really need to take the safety labels off everything and let the gene pool get cleaned out a bit…

Thank you. I read that article also. I am saving as much as I can, paid off our only credit card and sticking money into the bank. We are actually living leaner than we did before this.

Got a letter yesterday from Hells Fargo. They sent my "case" to their attorneys to start the foreclosure process. The lettered stated I still can pay the mortgage due in full. Yea, I have $400k laying around, the checks in the mail. Morons. I guess I still have about another 4 months before I get "evicted". From the research I have done and people I have talked to in same situation, its seems to take at least 4 months for the bank to complete the whole process.

jrc,

If you commute from Hollister, consider your relocation as a "gift opportunity" to relocate closer to the job, because those long commutes are not viable over the long term.

All the stars have to be aligned, everything has to jive, to make it practical and come out OK. Broken car, illness in the family, illness (or sudden unemployment) of the carpool partner, traffic conditions, gasoline prices, insurance rates, shift schedules, after work responsibilities at home, un-expected and un-welcome, but "required" overtime, any one of these things can screw it up, but it seems like more than one thing at a time can conspire to make it a whack-a-mole treadmill.

The only folks I know who've made it work over the long haul work on compressed shifts that straddle the weekend. But even then, they miss all the social life at home that goes on in the weekends.

jrc says

I guess I still have about another 4 months before I get “evicted”.

A couple I know lived in Sacramento, and stayed in the house for 1 year after their last payment. Actually they left and moved to start over in another state, so I dunno how long it would have taken for an actual eviction. I have heard it takes up to 2 years now.

sybrib says

jrc,
If you commute from Hollister, consider your relocation as a “gift opportunity” to relocate closer to the job, because those long commutes are not viable over the long term.
All the stars have to be aligned, everything has to jive, to make it practical and come out OK. Broken car, illness in the family, illness (or sudden unemployment) of the carpool partner, traffic conditions, gasoline prices, insurance rates, shift schedules, after work responsibilities at home, un-expected and un-welcome, but “required” overtime, any one of these things can screw it up, but it seems like more than one thing at a time can conspire to make it a whack-a-mole treadmill.
The only folks I know who’ve made it work over the long haul work on compressed shifts that straddle the weekend. But even then, they miss all the social life at home that goes on in the weekends.

You are correct. I look at this as an opportunity to start over. My wife and I commute 5 days a week, me from hollister to seaside and her from hollister to salinas. We will save $500 easy a month just in gas reduction. I have to look at the positives, because thats all I have now.

Hmmm... first, let me think... Nope, I don't see you comming to me 5 days a week. lol.

At least you made quite lot of downpayment, and that made me belive you're a clueless got caught in the middle rather than one of those morons. You're foreclosure just got started and you may have more than 4 monthes due to exploding numbers of foreclosure. You still can try shortsale if that's what you want. Then, make sure you hire someone who knew the stuff. If you take the path to foreclosure, make sure you save everything you can, don't waste a thing, use it forward your next home purchase or apartment rent. It's good to be liivng in non-recourse state, ain't it?

seaside says

It’s good to be liivng in non-recourse state, ain’t it?

Why should it be any other way?

I own some shares of an apartment REIT. I own real estate through stock shares. If the tenant's rent isn't enough to cover debt service, and the bank forecloses, it would be pretty absurd for the bank to come after ME to make up for any deficiency. In fact they can't. Investors in corporations can never lose more than they invested.

I don't see why the home investor should be held to a different standard.

Bern scammed billions. You gotta work through the government to get the real big transfers from the taxpayer into your bank account. The bank has little to no incentive to give you money. Although BofA apparently is cramming down because strategic foreclosures are skyrocketing (30% of all foreclosures). Congress, OTOH, give to whomever sits in government. $41K down per man, woman, and child. What's another $10K or so!!! So, I'll bet you can hold out and government will pay your cram down (well, I should say ME since I was one of those idiots who rented because I knew I didn't make enough to pay $750K for a $70K house in San Francisco! Actually, I went IO on a 1BR in 04 and got out as soon as I could in 05 because I realized what a mistake I had made and how precarious my position was... those condos are just now starting to roll over however. Tons of money in CA and SF. For now.).

There is an inherent problem in my personal opinion that I see in the greater scope of real estate over the past ten years ...and that is the belief that this 'pricing' of the past seven plus years was in anyway honest and solid. I would never think in my wildest imagination of paying 300K let alone 700K for an average or worse property regardless of location. If someone sold a place during this lunacy and then proceeded to put large money down on another grossly overpriced house ...sorry, but that person has to eat it alone. There is no free meal. No one had a buyer by their throat to buy anything (or take out any loans for anything.) I didn't. I am not sitting on a 700K debt for anything let alone something worth less than 250K, but if I was I certainly would not cry about it like a little girl or look for a free ride. Men have to man up and take responsibility for their actions regardless of the consequences ...that is my take on the bigger reality, that is called being a MAN. End of story.

been in real estate 40 years the answer u seek do not do not pay pay the taxes pay nothing taxes assesments etc the whole mess goes as a lien against the real estate u are not responsible for this mess the federal reserve is they are the ones that created the money out of the air now the money is going back into the air as they cannot revive the imploding ponzi scheme stand back 2010 will look like paradise compared to 2015 as the currency collapses

nancy53yankee, you deserve a prize!

I happily walked away from my 350K nightmare in Chicago for a 60K bank foreclosure. I lived rent free for over a year saving over 40K, eventuall giving the place to the bank. But before I left, I took cabinets, countertops, appliances and fixtures.

Do I feel guilty? Hell no. Walking away is the market risk that the banks assume, as I have assumed the risks of poor credit and a deficiency judgement.

However, not having a mortgage allows me to send my kids to decent schools and save for their college.

OCExRenter says

jrc says

I purchased the home in 03/2006 for $591,000, it was appraised at 618,000. I put $191,000 down financed $400,000 at 6% at a 5 year ARM. We did this because we did not plan stay after our son goes off to college. Who would of thought this would happen to the market. I never expected the home to be worth a million dollars, I know the market fluctuates, this is my second home I have owned, but I did not expect to lose all I had invested than some. I figured at worst when it was tme to sell we might lose a little of our investment just due to the normal real estate ups and downs.

I might sound like an a-hole for saying this but…
You gambled, you lost.
You do not deserve a cramdown; nor does anyone else.
It was pretty obvious even in 2005-2006 that there was no real support for prices that high. If you did not see the warning signs it’s your fault.
Time to walk away and lick your wounds.

OC X renter there is always a jerk in the crowd. The fault of this house price bubble and crash lies primarily with the lenders who at Basel 2 allowed off balance sheet banking in 1997. The easy money that resulted from the same kind of fraud that Enron practiced (but is legal because they are banks), resulted in inflated prices.

If you can't see this you are stupid. And yes, OC X renter, I think you are as thick as a brick.

commonsense says

There is an inherent problem in my personal opinion that I see in the greater scope of real estate over the past ten years …and that is the belief that this ‘pricing’ of the past seven plus years was in anyway honest and solid. I would never think in my wildest imagination of paying 300K let alone 700K for an average or worse property regardless of location. If someone sold a place during this lunacy and then proceeded to put large money down on another grossly overpriced house …sorry, but that person has to eat it alone. There is no free meal. No one had a buyer by their throat to buy anything (or take out any loans for anything.) I didn’t. I am not sitting on a 700K debt for anything let alone something worth less than 250K, but if I was I certainly would not cry about it like a little girl or look for a free ride. Men have to man up and take responsibility for their actions regardless of the consequences …that is my take on the bigger reality, that is called being a MAN. End of story.

You don't have much common sense, common sense. What I wrote here applies to you as well:

"OC X renter there is always a jerk in the crowd. The fault of this house price bubble and crash lies primarily with the lenders who at Basel 2 allowed off balance sheet banking in 1997. The easy money that resulted from the same kind of fraud that Enron practiced (but is legal because they are banks), resulted in inflated prices.

If you can’t see this you are stupid. And yes, OC X renter, I think you are as thick as a brick."

GaryA says

“OC X renter there is always a jerk in the crowd. The fault of this house price bubble and crash lies primarily with the lenders who at Basel 2 allowed off balance sheet banking in 1997. The easy money that resulted from the same kind of fraud that Enron practiced (but is legal because they are banks), resulted in inflated prices.

Gary--there is plenty of blame to go around. Just because someone offers to loan you $1MM doesn't mean you have to accept their offer when you have no hope to pay them back. If you take on too much debt, then you are definitely part of the problem.

What is with all the hate? Those acting holier than thou have certainly made dumb mistakes in their lives. This guy is choosing to stop making a dumb mistake and should be congratulated.

To answer the question the city does not come after the ex owner to pay back taxes after foreclosure/short sale.

The advice to talk to a lawyer is good advice - a really good one will cost $300 for an hour and if you prepare all your questions in advance an hour is all you need. This is not hugely necessary but will allow you to sleep easy.

Look into current California law regarding tax implications of the forgiven debt amount - the exemption to this may have expired.

A foreclosure or a short sale have almost identical impact on your credit score despite some of the advice given above.

You will find that most landlords could care less about a foreclosure/short sale these days - they usually laugh and say "Yeah, everyone has one of those". There is the odd d..k (like the sanctimonious people claiming to be perfect on this forum) but the most common response is to add a token amount like $200 to your deposit.

You are likely to be able to stay for far longer than four months. At the moment in California one year is more likely. This depends a lot on who your lender is but the banks would rather have you in there than have the place empty as a general rule.

You have the right to stop making a mistake once you've realized you have made one. God bless.

Mickey6 said "You will find that most landlords could care less about a foreclosure/short sale these days - they usually laugh and say “Yeah, everyone has one of those”. There is the odd d..k (like the sanctimonious people claiming to be perfect on this forum) but the most common response is to add a token amount like $200 to your deposit."

You may be right about some landlords, but this one cares a lot. I have told the management company not to waste my time or theirs when my places become vacant (which is very rare I would add) because I won't rent to forclosure/short sales/walk-a-ways.....credit reports don't say if it was walk-a-way, etc. just that it wasn't paid as agreed. If someone was late here and there and didn't make a habit of it I can handle that. There are too many good tenants out there to fool around with people that have walked away from their mortgages. In March I had an opening and the place was turned around in 20 days with several good potential tenants turning in applications. Every time there is a vacancy, I use that time to make upgrades, etc. If the management company is good, they have lots of crafts persons on their list and can get things turned around quickly.

Hi shrekgrinch: I'm in Pasadena now with places in Glendale and Pasadena. The real estate market and rental prices are good and solid here. I didn't have to lower my rate when the tenant moved a few months back. The management company said that it was right on target and they were right. That's what I pay them for; no hassles and expertise. I grew up and lived in the bay area for many, many years so I am intimately familiar with that area as well. I sold my rental properties up there about 10 years ago because I am not one to be an absentee landlord...... too far away for me. I am fortunate that I was always a landlord because I wanted to be, not an accidental landlord because I was upside down and in trouble trying to keep them. Mind you it wasn't because I was smarter than anyone else, just lucky LOL.

You're mad that the house's value has dropped below what you owe.... I'm so sorry to hear that. Same thing happened to my car, my sofa, and my now-deceased pure-bred chihuahua.

So the problem is that you HAVE to sell because you're moving, right? Here's a suggestion: Stop being a greedy douchebag begging for a principal reduction (free money) and rent the house out. You know, let people pay you while they live there, and you can pay your mortgage and reclaim your title of non-deadbeat. Maybe you'll take a monthly loss, but I'm sure if you adjust your lifestyle to that of the average person that makes way less than you, you'll get by just fine. Shit, it might even be humbling! And if the monthly loss is more than a little, then you're a fucking idiot for not looking at the rental comps when you bought.

"Hey honey, why are we paying over twice the amount per month on our mortgage than it would cost to rent this same house?"

"Remember our conversation the day we closed? If we don't own, then we'll be piece of shit renters. How can we become the very people we're supposed to look down upon?"

I think anyone who wants to walk away from their home, they should do it. only that way the housing market can correct itself. because there will be a massive amount of house in the banks hand and they won't have enough FED money to save them. that been said. I am still renting, I didn't buy a house when I know I can't afford it, ( but I could have bought it in 2006) and I don't have a PHD degree, but I can calculate that I won't be able to make the payment when the interest rate start to move. People! you got yourself in this trouble you shouldn't expect using other people's tax dollars to pay for your house!

klarek says

You’re mad that the house’s value has dropped below what you owe…. I’m so sorry to hear that. Same thing happened to my car, my sofa, and my now-deceased pure-bred chihuahua.

More like the pawn shop is mad that they lent $1K with a sofa as collateral, only to discover later that the same sofa is going for $500. The guy who pawned his sofa is rightly deciding it makes no sense to pay the $1K + interest back. Just let the pawn shop keep the sofa.

shrekgrinch: love the avatar, awesome game!

I would say if you are wanting lots of info on how to go about walking away, that website loansafe.org may be your best place to go. Say what you want of some of the people there, but, lots of info.

As for your situation that others are going through as well, maybe this all goes to a fundamental problem on how we view houses in general compared to other big purchases like say a car.

When you buy a new or used car, you go in knowing that it will depreciate. It won't be worth more than when you bought it in general, let alone hold its value as it relates to inflation, or better yet, make money off of it.

Housing though we expect to hold its value or increase, and worse yet, this time we had it go nuts pricewise and people thought that was great.

never understood that, still don't.

Rents aren't falling and vacancies aren't increasing?! Oh dear God, what planet are you geniuses from? You manage to rent your properties in a reasonable time frame so the entire market is great?! We get it - you own rental property.
Rob918, I believe I covered people like you in my original post. Anyone landlord with a functioning brain will jump on a short sale/foreclosure potential tenant. They will have paid well above the rent you are asking for years so they will have plenty of free cash flow to pay the rent. The guy that started this thread put down $191k as a deposit on his house - how many of your tenants do you think have ever saved this amount?
Low level landlords like you guys tend to have God complexes (and yes, I too have been a landlord for many years). I am saving up my reserve of schadenfraude for when guys like you go to the wall - and you will, because you will simply be too dumb to recognize when you finally do have to lower your rents and will stubbornly hold out for that tenant with 720 FICO, a good job and the willingness to pay above market.

In a alternate universe, no one had defaulted on their mortgage after the bubble.
If home debtors became unemployed, they’d sell plasma for cash and their wives would turn tricks at night to pay the mortgage.
Have you ever wonder what the RE market would be like there today?
BA median price would be 800K. All flippers, bankers, RE folks are deliriously happy.
Angelo Mozillo gives himself a $100M bonus for the best year ever at CW and President McCain just nuked Iran and North Korea.
Ok, I am only kidding about McCain.

m1ckey6 says

Rents aren’t falling and vacancies aren’t increasing?! Oh dear God, what planet are you geniuses from? You manage to rent your properties in a reasonable time frame so the entire market is great?! We get it - you own rental property.
Rob918, I believe I covered people like you in my original post. Anyone landlord with a functioning brain will jump on a short sale/foreclosure potential tenant. They will have paid well above the rent you are asking for years so they will have plenty of free cash flow to pay the rent. The guy that started this thread put down $191k as a deposit on his house - how many of your tenants do you think have ever saved this amount?
Low level landlords like you guys tend to have God complexes (and yes, I too have been a landlord for many years). I am saving up my reserve of schadenfraude for when guys like you go to the wall - and you will, because you will simply be too dumb to recognize when you finally do have to lower your rents and will stubbornly hold out for that tenant with 720 FICO, a good job and the willingness to pay above market.

Micky6, I am sure glad that you know everything. I have no "God complex", I'm just a nice guy with a happy, stress free, retired life. I don't mean to be as presumptuous as you, and I may be wrong, but you seem very angry about something.....name calling, etc. Very childish and not following Patrick's simple rule of being polite as is prominently displayed at the top of this page. I have been a successful landlord for over 20 years and have never had to evict anyone, so I guess I must be doing something right, hence I won't be taking any of your advice. Also, I won't be going to the wall as you say, because I will be just fine if I just sat on my places and never had another tenant. I have the luxury of lowering rents if that's what the market dictates, but that's not what is happening here. All real estate is local. I have never, nor would I ever leverage myself like so many people have done with real estate. I learned finance well from my grandfather many years ago, so I have been debt free for many, many years. I was following Dave Ramsey's practical, old fashioned advice before Dave Ramsey was doing it :-)

rob918, the hostility you'd get from me would be the fact that you are parasitical rentier profiting from your ownership of "income properties" that in a more just order would be owner-occupied.

If I were King I'd tax your business model to hell, but I am not and it's highly unlikely the proles will ever figure this game out.

In fact, if I could I'd be doing the exact same as you. It's a wonderful racket, especially with Prop 13.

Troy says

rob918, the hostility you’d get from me would be the fact that you are parasitical rentier profiting from your ownership of “income properties” that in a more just order would be owner-occupied.
If I were King I’d tax your business model to hell, but I am not and it’s highly unlikely the proles will ever figure this game out.
In fact, if I could I’d be doing the exact same as you. It’s a wonderful racket, especially with Prop 13.

I would respectfully say that I worked hard at the same job for over 20 years and was prudent with my paychecks and got lucky with some investments. I erned my money the old fashioned way, I went to a job everyday. I pay taxes on my passive income, as well as my retirement, so it's not like I am getting any free rides. I don't benefit that much from prop 13 because I haven't held them for that many years to make a big difference. The owners that really make out are people that bought in the 70s and 80s or earlier. I'm a Democrat and would change or even eliminate prop 13 if it were in my power, especially for commercial property. I would recommend that people buy one place, pay it off quickly, buy another pay it off and repeat that process then sell and pay cash for the next one as they appreciate.......there is no such thing as a getting rich quick. Everytime I read the tortoise and the hare, the tortoise always wins.

I just see buying SFHs to rent out as a great, great moral evil.

There's no actual wealth creation going on, it's pure skimmer activity, putting yourself in an unnecessary intermediary position between a person who needs the housing good and the already-built housing stock.

I have much less problem with people profiting from the construction and leasing of new rental stock, but there's also a moral problem there as land values rise and the economic rent of the property moves from the value of the fixed capital and onto the site value. The owners of the property did nothing to create this increased site value, yet they are profiting from it -- this is getting something for nothing and is therefore a moral problem and economic inefficiency.

This is why I favor a strong land-value tax regime to purge the system of the parasitical rentiers.

I pay taxes on my passive income

people paid taxes on their slaves. Just sayin'.

Again, if I had access to around $20M in capital there is nothing I would rather do than build a very nice 100 unit complex in the nice part of Fresno, like this property that's on the market for $2M.

Troy, you lost me there.
At this point in life, I'd only rent a SFH to live if I have to rent.
I got a family and pets and too many cars.
Muti-unit apartments can't cut it. I don't even want to live near one - I know, I used to have apartments as backyard neighbors. The police helicopters wakes me up too much.
So there is nothing wrong with providing something of value to others willing to pay a premium.
I frequently pay more for things just because I enjoy or need it, e.g. gym membership, rental cars...

kt says

So there is nothing wrong with providing something of value to others willing to pay a premium.

I agree, but a SFH income property is not providing something of value. Quite the opposite, it's withholding something of value until someone meets your price. IMHO this is not capitalism -- it's rentierism -- when the item in question was not created by you.

I also agree that my pipe dream of developing a high-end complex in Fresno is undoubtedly fraught with more "unknown unknowns" than I can shake a stick at. But I was thinking it would be cool making a livable complex for people without families or with young families. My current digs closely resemble this idea. Built in the late 80s, there's tons of space and the grounds are quite nice. Whoever built this complex done good in the Capitalist department -- creating wealth for the community. Current owners can suck me tho ; )

kt says

e.g. gym membership, rental cars

Also, the supply of gym memberships and rental cars can be increased to meet market demand. The supply of SFH in California, not so much. This is the core economics of the ongoing injustice of SFH income properties.

Back in the late 70s a nice doctor guy used his surplus income to buy a house that had come on the market a few doors down from him, and kindly allowed us use of this extra house of his for four years, for a fee, since we were perfectly willing to pay the premium to live in Salinas' best school district (Monterey Park) and there were no other SFHs available, and the multifamily stock in the area was horrendous.

I think this balance is f---ed up. We are plowing too much RE investment into raw land value and not enough into the actual housing stock. This can be fixed with different tax policy and zoning, but there's zero chance that we'll do this since we are a nation of disempowered idiots -- the people with money are of course perfectly happy with the status quo they've created over the past 100 years, and the people without money have the political policy footprint of monkeys in the zoo.

Patrick,

I went through a foreclosure in '08 and stopped paying the property taxes as well as the HOA's. Once the property is seized by the bank or you do as I did and go "cash for keys", ALL of the taxes owed and HOA's are the responsibility of the banks.

You will be 1099'd for the income you received on the cash for keys though.

I am currently being pursued by the 2nd on a HELOC I did for the refi. I was not one of those people who refi'd to go on a spending spree or payoff bills. I just simply wanted a lower rate. My ex (the whole reason we foreclosed in the first place) is currently in negotiations with them for a settlement. Meanwhile I have to hide all my cash reserves in a joint acct with my Dad so the bank doesn't seize them for the HELOC and put the rest into IRA's and 401k so they can't touch it

Troy says

kt says

Also, the supply of gym memberships and rental cars can be increased to meet market demand. The supply of SFH in California, not so much.

Maybe true in the BA and parts of SoCal. Not true in the Central Valley.
In the peak bubble years, it seems one cannot drive anywhere without seeing new tract homes springing up. My wife got tire of listening to me say, "Holy crap, who's going to buy these ugly houses?".
But land grabbing by the rich or powerful goes way back, like the oldest profession.
Communism was a failed experiment to fix that.

jrc.
(1) The lender did not "ding" your credit rating. You did that when you stopped making payments.
(2) I agree with whoever wrote that the modification process is a scam. The most they will do is lower your interest rate, but add back in all shortages plus extra penalties and interest. Your loan liability will go up. The lower payment is temporary. They will probably extend to 40 years. Do you really want to pay the outragous interest on a 40 year amortization, even at a low rate. Do the math, payments are impacted more by the amount borrowed and the length of loan than by the interest rate.
(3) At the amount you are underwater, you will never catch up and be able to sell for what you owe. If you are in a situation in 5 years where you MUST sell, you will still be underwater and the shortage will be subject to federal and state income tax.
(4) If you are willing to accept the personal, emotional and FICO consequences of foreclosure, it is the smart move. If that is your decision, try to stay there payment-free for as long as you can.

http://www.youwalkaway.com/output24/InterectiveFlashCalculator.html

calculator for walking away. a lot of people i know broke the strangle grip of an expensive loan and walked away, they felt so much better about their life after. its just too stressful and often financially difficult when once life is owned by a bank who can take a home at any point of default.

At my wifes company there is outsourcing starting, so family income may drop in half, my job isn't guaranteed either. the loving and caring bank isn't going to give me a second if i cant pay. My suggestion is that if it financially makes sense to walk away... stop paying rent and live there for a year until it forecloses. And don't buy another house until one income can comfortably afford it. In California you are not responsible for taxes for walking away, at least until 2012.

On another note our neighbor has not made a payment for 2 years on his now foreclosed house, almost saved his downpayment back by living in a foreclosed house.

I am 64 yrs old and bought condo in CA 3 yrs ago. Was told my lender not to worry about large mortage as the property would be worth more than the mortage owed when I retired. Now I'm over $100,00 upside down and will have to foreclose anyway when I retire. I want to stay in my place as long as possible. I quit making payments in May. Chase keeps calling from an 800 # but Im not answering. How long can I wait to request a loan modification? How long does it take to get one? If I don't take the mod if approved, how long before they foreclose. Bottom line, I'd like not to have the physical and mental stress of moving until I retire in 2 years.
Anybody got any ideas?? Thanks.

Chapter2008, How much is your HOA? They probably will not want to foreclose on you since they'd have to pay the HOA.

If you have the resources, tell the lender that you temporarily cannot afford payments, but will be able to in say... 8 months. There's a term for it but you can stall your payments, and "pay" them additional interest later on when you start making payments again.