Is foreclosure ever a good strategy?
Question:
Prices have fallen some 15% and dropping by the minute in the past 2 MONTHS! My original equity loan was at 74% appraised value. Now it is more then 110%!!!!!!! Yes in 2 months! So I'm trying to sell the home at the same amount my equity loan was at.
So my thought is, that since the greedy banks and agents put us all here, they can come take back my home. I can live here for free, not paying the payment for 9 months and save about $6K per month since I have a great job before I move. This will offset my loss, but I know will ruin my credit for a while. Is this wise? Can the bank then come after my equity loan purchased home out of state? I'm pissed as to what they did to the market here.
Answer:
The lenders and the real estate agents did nothing to the real estate market, the consumers are solely responsible. Check out the definition of economics.
If you allow foreclosure on your first house, the lenders will take it and then likely come to you for the rest of the money the foreclosure didn't cover. When the lender realizes that you own another property (and they will because deeds are public information) you will be amazed how quickly their expenses will accrue and they will be attached to your "dream house" as a lien which will continue to accrue more interest (12% a year) until it is paid off. Then there is the unpaid taxes ...
No, foreclosure is not a good strategy for you unless perhaps you were dying of a terminal disease and had no heirs. Instead, I suggest you take out a mortgage on the "dream house" to pay off the the other mortgage if a better rate can be assumed. If you wait until after foreclosure, you will be up a creek.
You had no responsibility for taking out a loan you couldn't afford of course?
You'll end up without credit for a long time, and (in the UK at least), they could pursue you for a shortfall to bankruptcy.
Alternatively, get a grip..
You are blaming the banks for you taking out a loan? You took the money and now you don't think you need to pay them back? I think you need to look in the mirror to find hte greedy one.
Of course the foreclosure will destroy your credit. It is doubtful you will ever purchase again. They can sue and take other assests of yours to recover their loss. It doesn't matter what state you have property in, you spent their money and signed a contract to repay them.
Listen how do you know the appraised value lost that much value in that short amount of time. Which I do not believe I am a real estate broker and I handle loans. Whatever you do do not stop payment on your mortgage this will create the biggest crisis in your financial life. this will ruin your more than a bankruptcy. I know this because I handle forecloser property everyday in southern california and I work with the banks. Banks and the agents are not ruining your equity. economics did!! Check it out!!
If you want advise you can send me a email
if your like
Sam Perez
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