patrick.net

1) Never get a second mortgage. You can't dig yourself out of a hole.

2) Never buy a house for more than you can afford. I don't have much sympathy for people who had a $870,000 house; you're either rich or you're living beyond your means. Doesn't sound like you're rich.

3) It's not just Wells Fargo. All banks are like that. If you don't follow #2 they will rape you six ways from sunday.

You are a deadbeat turd. It never ceases to amaze me the entitlement in today's world. You should just be a man and accept that you made a very idiotic bet and lost other people's money. Instead, you're trying to justify your losses by placing the blame on others. Nobody here feels sorry for you. I hope Wells Fargo wins big in this case.

I'm not going to dump on you, I think you and your wife have gone through enough.

Buying a $870,000 home, and then taking a $400,000 HELOC would be a burden to all but the richest people in the Bay Area. I hope you two have learned your lesson from this experience.

Not sure any commentors so far has made a lick of sense. He did not even tell what he paid for the home, but I'm assuming they were sold a bill of goods and then had to spend 152k fixing the junk up.

They were wise to do away with that loan first.

Working the system is what the corporate hacks do, people do it as well, but it's tough taking on shit piles of money.

I think it's a given the owner of this home knows they made a mistake, but the reality is, they were taken by the NAR and banks more than anything.

Sounds like they bought with zero down at the peak. Then took a HUGE 150k+ HELOC to live it up eating nice breakfasts and squating for free.

I bet they still live for free now in the big mcmansion for years making no payments.

The reason he is really angry is 'how dare they want me to pay back a loan??!?!?'

And the worst part is the feds passing all these laws and moratoriums to help these deadbeats, espeically lowering interest rates to rock bottom, to steal from hard working savers, to bail out worthless eaters like this guy and his wife.

This guy is why you get 1% on your CD.

Let me see if I understand this. You took out a second mortgage - in other words, you borrowed money using the equity of your home as collateral. What did you do with that money, and why didn't you feel like you ought to pay it back? I don't understand what your house losing value has to do with the second mortgage - you borrowed the money and presumably either spent it or kept it, right? So do you feel that it's "free money" and you are morally entitled to keep it, even though you did nothing to earn it?

Seriously - help me understand this sense of entitlement you feel.

It takes courage to tell the truth, especially here on pnet. ohomen171 is providing solid information to his experience. The banks got bailed out. Why not his 2nd lien too? I wish I got a bailout too on my heloc before I sold. I would have profited well. The whole system is controlled by a few. The banks suck the life out of anyone who is willing to sign. Pots n kettles.

Telling a story like yours in a forum like this is perhaps the thing that calls your judgment most into question. Tantamount to going onto Faux News or the Daily Show in an effort to have a fair and balanced debate. Not going to happen.

What your tale reinforces for me is that Wells Fargo is a well run residential lender and retail bank. Despite the inability of the frothing mouthed mob to distinguish between Lehman and Wells, there is a reason WF has consistently maintained investment grade quality throughout the entire meltdown.

And I have to say this: By 2007 you had ample warning signs which should have caused you to carefully evaluate your debt choices. Again, despite the self righteousness of many here, there's nothing inherently wrong with 2nd mortgages or HELOCs, so long as you understand the risk and have thought through the implications. If these products are too complex for you, then the onus is yours to educate yourself or steer clear.

!!!whiner alert!!!

KILLERJANE says

The banks got bailed out. Why not his 2nd lien too?

Two wrongs don't make a right. It's a shame the banks were bailed out, but it doesn't mean every deadbeat deserves to be.

Yeah we all know that but I appreciate this guys information. Information. Not whining.

Yeah I agree. Instead of calling this guy a deadbeat, and idiot, why don't we just appreciate the information he is providing to the community? I think these people know they made a mistake.

I personally have never gotten so much detail about a negotiation between a lien holder, and someone who was attempting to clear a $150,000 HELOC.

Besides, I'm pretty sure after spending some $25,000+ on legal fees, and another $20,000 to clear the loan, this person has probably learned their lesson which at this point is all we can hope for.

We need a 'victim of the week' thread on this board. With monthly winners for the ones who were able to extract the most $ in credit and default without paying. bonus for every year of free squating.

Goran_K says

Yeah I agree. Instead of calling this guy a deadbeat, and idiot, why don't we just appreciate the information he is providing to the community? I think these people know they made a mistake.

I don't get any sense of that at all. Did we both read the same post? It reads not as a contrite person who admits they made a mistake, but as a self-righteous person blaming all their problems on Wells Fargo. This person appears to honestly believe that he is morally entitled to keep that HELOC money.

Do you understand that this is not the same as a first mortgage? If you buy a house and the value declines, you are in effect losing money. I still think you owe the money you borrowed, but I can understand how someone might make the choice to walk away from a mortgage when they are in effect losing a great deal of money.

But with a HELOC, THEY DIDN'T LOSE ANY MONEY. They got every cent of that loan, and thanks to an overdeveloped sense of entitlement and a flashy lawyer, got to keep all that money. Who do you think is footing the bill for that? Do you think it's Wells? Dream on. It is the middle-class taxpayers who are getting screwed. When you game the system, you are taking a big shit on your fellow taxpayers.

So again I ask: Explain why you feel that you are entitled to keep money that you did not earn.

Its really the system we have and how it works we are angry at.

The fact is: most people (at least half from my experience) will take ANY and ALL credit extended to them regardless of ability to pay, or how abusive that loan is (200k student debt is common).

So we know if they lower lending standards to 'fill out peice of paper, get 3 million in loans' that there will be endless people lined up for this money. Its called being a debt junkie. These people simply declare BK as often as the law will allow and thier 'wealth cycle' is part of the business/credit cycle. They will be broke between credit binges (rececessions) and live like kings during peak borrowing years (non recession/boom).

This is the modern financial system - it just works this way.

Homeboy says

It reads not as a contrite person who admits they made a mistake, but as a self-righteous person blaming all their problems on Wells Fargo. This person appears to honestly believe that he is morally entitled to keep that HELOC money.

Well that could be true. I read it as "My life got wrecked, I probably won't do that again."

But that could be way off, admittedly.

"we considered to be a worthless loan."

This is the phrase that is troublesome. It wasn't a worthless loan when he received $152,000. It only became a worthless loan when the value of his house collapsed. So why not give them their money back? What did you do with it? This is the one part of the story he leaves out. If he put the money into the home and it lost value, a person can feel a little sympathy. I could make the argument that the banks (first and second) lost. But if he spent the money on cars, vacations and entertainment, then he got his money! He should pay it back.

Here is the real rub. How can a lawyer and a doctor be that stupid about money?

Not a "worthless loan" since its not a money purchase loan. What you got is a very expensive education on the topic of a "line of credit". You might want to sue your college for granting you a "law degree".

You should be thanking Wells Fargo, they did you a favor.

Addendum - My apologies, I withdraw my 'law degree' comment since you never stated that you graduated.

A simpler story would be "I stole over $100,000.00 and got away with it". How this person can go through the day thinking they are a victim is stunning.

Here is where for me it begins and ends, " When the housing bubble burst our house dropped in value from $870,000 to about $400,000."

And that rant about the house being 870K and now 400K? Well THAT is YOUR problem (alone) not society's in my view. You bought the place, right? And now what? Do you now have buyer's remorse? I personally don't care.

I don't get you people talking so freely about just walking away from a debt. Do you want to eat someone else's bad debt? I don't. And where is someone going to just "walk away" from a near million dollar debt and then go buy another house, if they as has been mentioned by another"play their cards right?"

This is the mentality that has contributed to this current condition in my opinion. It hits me as buy it, don't like it, don't want to pay for it just walk and let someone else eat it. What the hell kind of ethics is flying around here? And what bank is going to lend money to anyone when their credit standing is down the sewer? It takes years of credit history to build a record on integrity. I am sorry this entire scenario is sickening to me.

That was my pension fund they lent to you that you didn't pay back. While I was working 70 hours a week driving a truck for 25 years, saving my pennies and living out of my camper, you were bidding up the price of homes to ridiculous levels with your stupid 'credit'. I'm still waiting for the correction to finish bringing prices down to where a worker can make a house payment. Hope you enjoyed your house.

I agree that we need a whiner of the day/week award forum. It's just too entertaining to read self righteous people explaining that although they just bilked a bank for a crapload of money, they still deserve our sympathy because they believe themselves a victim!
Amazing! I want more.

Starrstruck says

This is the phrase that is troublesome. It wasn't a worthless loan when he received $152,000. It only became a worthless loan when the value of his house collapsed. So why not give them their money back? What did you do with it? This is the one part of the story he leaves out.

Probably bling.

taxee says

That was my pension fund they lent to you that you didn't pay back.

No it wasn't. Very unlikely this borrower's debt was in the tranche that ended up in your pension fund. That is, unless your pension fund was being every bit as greedy and irresponsible as you imagine this borrower.

The saddest thing about this bubble, and something if you page all the way back to 2006 when many of us were discussing this long before it popped, is that it ends up with everyone turning on everyone else while the systemic problems that allowed and encouraged the bubble go untreated.

People "walking away" from debt actually has no bearing on the root causes of the issue. In fact, it probably helps in a very counter-intuitive way. But no one wants to hear that because it offends their sensibilities and they can't be bothered to think through things beyond the sound bites, so instead we paper it over and lay the groundwork for this to all happen again in a generation or two.

Here is what plenty of people in today's world need to read and learn, what the manipulators don't want you to read and learn, it's all right here:

http://www.cblpi.org/ftp/Econ/DeCoster_Stuff%20Does%20Not%20Equal%20Wealth.pdf

I wouldn't blame Wells Fargo for this. How would you act if I borrowed $400,000 from you and refused to pay it back?

When a borrower makes a dumb decision and gets a loan they can't afford, it's their fault.

When a bank makes a dumb decision and writes a bad loan, it's still the borrower's fault, also. Huh?!

Banks didn't create the bubble by lending to everybody with a pulse and cause prices to skyrocket? And while they got bailed out by the Fed, that's okay, but we can't provide any relief for borrowers?

Gimme a break, Charlie Brown.

Everyone isn't entitled to a bailout. One mistake does not mean we should forgive everyone else for it. Besides I was never for bank bail outs anyway.

You want to run a nation bankrupt and to fail? Bail everyone out and watch them repeat their mistakes as they will be conditioned to believe that mistakes will always lead to a bailout.

thunderlips11 says

When a borrower makes a dumb decision and gets a loan they can't afford, it's their fault.

When a bank makes a dumb decision and writes a bad loan, it's still the borrower's fault, also. Huh?!

Banks didn't create the bubble by lending to everybody with a pulse and cause prices to skyrocket? And while they got bailed out by the Fed, that's okay, but we can't provide any relief for borrowers?

Gimme a break, Charlie Brown.

Homo Economicus. A Legendary Creature, like Bigfoot, claimed to exist by Pseudoscientists.

Thank you very much. :)

taxee says

That was my pension fund they lent to you that you didn't pay back.

You should get a new pension fund then. It's not our problem that your pension is stupid in their investment choices. :)

So you own 5 properties, and in this thread you admit to trying to rip off $152,000 from Wells fargo in the form of an equity loan? Your legal costs posted here do not include the advise you needed because you are a complex property manager with complicated holdings and your desire to attempt this shenanigan.

I have money at Wells fargo and they are one of the most responsible banks with very safe reserves compared to the other banks. Responsible banks should be rewarded in a free market.

Wells fargo lawyers should force the sale of your other holdings to cover the $152,000 your are trying to skip out on.

If you do manage to walk away from your $152,000 equity loan then that will be converted to income that you will have to pay taxes on because it is a gain.

As I see it all 5 of your properties will be foreclosed on and put on the market thus driving down Bay area housing prices further for the new generation of buyers emerging.

I know a few investors that have gone through your exact same story. Those are the people you need to talk to. They are good at preserving any assets they have left.

dhmartens says

Wells fargo lawyers should force the sale of your other holdings to cover the $152,000 your are trying to skip out on.

Apparently his holdings don't have much equity. Otherwise, the settlement would have been higher. I still don't understand why someone would hang onto a property that's $400k underwatered. There must be more to the story. The gentleman just shared his experience with the readers. No need to scrutinize him. People live & learn.

E-man says

It's just a business decision from all angles. You borrowed by the rules; you default by the rules; you buy back in 2 years by the rules.

Exactly. Walking away isn't the problem. The problem is the government bailing out the banks everytime they make bad loans.

One possible solution is to label the housing crash as a "Natural Disaster" and allow families with houses to apply for federal emergency disaster assistance. Treat it like any other Tornado, Hurricane, or Earth quake.

yes and stock market crash is natural disaster too
and bernie madoff + all other ponzi are natural disaster

there would be zero money left for actual disasters.

When the shelves are empty because clever people spent all their time gaming the system instead of doing productive work I guess you can call it a natural disaster. Just blame it on their nature.

dhmartens says

So you own 5 properties, and in this thread you admit to trying to rip off $152,000 from Wells fargo in the form of an equity loan? Your legal costs posted here do not include the advise you needed because you are a complex property manager with complicated holdings and your desire to attempt this shenanigan.

Where did you get this info? I didn't see anything about them owning 5 properties.

I think in his other posts on this forum