The Wall Street Journal is reporting a new trend in reidential real estate — and it has me hopping mad.
According to the article, sellers are finding a way around the current depreciation of their homes by buying a new home and allowing their old one to go into foreclosure.
Is this legal? I don’t care. Is it right? Hell no.
You made the decision to purchase the property for “x” and simply because current value is “x-10%” you don’t have the right to walk away from your loan commitments and buy a new home.
Don’t get me wrong, I’m not talking about short-sales where changes in interest rates, familial situations, etc. have created a financial hardship.
This is about being GREEDY and nothing more. And when an agent doesn’t see anything wrong with the siituation, as we see in the story, they should have their license revoked and be tried for mortgage fraud.
By the way if you are thinking of doing this in central Ohio, don’t call me. I’m not interested.
Photograh by Vivre and used via license of Stock.xchng.
I had not heard of this trend thank you for bringing it to the forefront. That is just outrageous and you are right GREEDY.
Its called Buy & Bail. Being an REO specialist, I have to agree. It is shady…
Of course what people do not realize is they get a 1099 at the end of the year and what ever the value of that loan is becomes “income.”
As well, they banks do keep the right to file for a “deficiency” judgment. This allows banks to garner wages, tap assets, and yes, even put a lein on your new home and foreclose!
My $.02, think about it LOOOOOONNNNNNGGGGGG and Hard!
I heard from a friend that someone I went to high school with decided to go this route. The individual can make the payments just fine and even worse they are renting it out collecting income not making the monthly payments on mortgage.
I think it is dispicable and it takes away from the honest individuals that need help.
This is so frustrating. Especially for those among us who want to buy a house and can’t. Be responsible and think about others people.
Chris – It is a major issue for me.
Rocky – I believe that the foreclosure and short-sale “phantom income” is not an issue at least for the rest of this year.
Jason – That is going to be our next batch of problems. What do you do with a renter when the landlord goes into foreclosure?
Chrissy – Amen girl. You guys keep working – and you get to feeling better – and things will get better.