Going from a foreclosured home to a new one before foreclosure is over...????

[dvcgirl]

I'd like to believe that, but in my more cynical moments I think that those people who didn't save will be receiving social security checks and medical benefits, while those of us who worked and saved will be told, "Sorry, you don't need it as much as other people".

Oh, I definitely think that there will be means testing. But in this thread, and the other thread where one kid got lots of financial aid and the other family none.....I'd still rather be "the other family".

Right now, in our time, we're reading about lots of fraud. Whether it be Teresa and her hubby of the "Real Housewives of New Jersey" bankrupting on 11 million in debt only to fail to report income. They're being sued by their bankruptcy trustee. This could be because the show she is on was filmed after they filed....and they spend on the show like they're both headed to the electric chair tomorrow.

Or the thousands and thousands of "strategic foreclosures" we're reading about. These people will see their credit harmed, but they've made the decision to send the keys back.

Sure, with all of the poor decisions of these people and the big business.....we're all seeing consequences. Our house value has dropped, our 401Ks are down. And housing and the economy in general can't seem to find a footing which increases the chance of a "double dip" recession.

Still, I'd rather be "us" than "them". If 20 years from now the government tells me that with portfolio of investments that we can't have social security, or even medicare....I'd rather be me than someone relying only on those two things to survive (and there's going to be a *lot* of those people). We don't factor in SS at all with respect to our financial planning even though I do believe that we'll get something. Even if it's only half....it will be enough to pay for the increase in premiums that we'll likely have to pay for Medicare.

So...I'd rather keep saving, continue our fiscally responsible lifestyle. We're 100% in control of our destiny.....with no debt, and no pensions....our future and our retirement is completely dependent on *us*. And I'd have it no other way.

 

[clutter]

Thanks everyone for the replies!

I know I shouldn't let it get to me, but when she is posting to Facebook saying how they have just moved into their new house, putting in a new pool, etc. She's throwing it into anyones face who can read her status. Then she posts how they are going on a cruise and going to Disney World afterwards and that their vaca will be a good 2 weeks, I just want to pull her through my laptop and slap her.

You know what they say about Karma, I hope it comes back and bites her and him in the butt!

That's why Facebook has a HIDE button. Hide her and only look at her updates when you can take it. I have a friend like that. Different issues, but I can only take her when I'm in the mood.

 

[luvsJack]

Not saying its right for society or the individual but sometimes people are advised by bankruptcy lawyers, mortgage brokers, etc. on how to handle these situations.

Like, go ahead and buy a car and have it financed and then file bankruptcy (not sure if this still works with the changes in the laws, but it did years ago when someone was filing a chapter 7); they keep the car, pay it off through the bankruptcy court and don't pay the interest and finance charges, etc. They are able to get the car before their credit takes a huge hit and they don't have to worry about their car breaking down before the bankruptcy is paid and not being able to finance.

Someone may have told them to go ahead and buy another house before the first one was foreclosed on. If its going to be foreclosed on anyway, why would you continue to make payments? So the payments were banked, the new house bought, the old house foreclosed on. They have a place to live and used the mortgage money to go on a cruise and build a pool.

Its not right, but seems to continue to work.

 

[ceecee]

I
Welfare used to be a safety net to hold you up until you could get back on your feet, today it is a hammock with generations of families laying around in it!

So true! And the government wonders why we are in trouble.

 

[JENOS]

It is a no win situation (when family is involved) I see this kind of “taking advantage” or more so, not living up to your responsibility in my wife’s family. You can’t say or do anything or you will be looked as a (Judas). I have told my deadbeat brother-in-law to take care of his children, to stop drinking in a positive way and it still comes back to us as I should mind my own business, not only from him but from my wife’s grandmother, uncles, aunts and cousins. While we try to do the right things like go to school, buy a house, save for a family vacation and raise of children with love. They try to find a way to cheat the system and get what they can for free. And when you distance yourself from them because of this, they will say that we are stuck up and don’t come around because it is not up to our standards.

Don’t let other peoples actions consume you and don’t worry about their comments on facebook do what right for you and your family and you will be ok. Remember that what they are doing is perfectly ok morally in THEIR heads, and there isn’t much that you can do to change that.

 

[DawnM]

I had a co-worker who did this back in the 90s.....she was actually proud of the fact that she screwed the system.

I agree I would rather be the one holding the bank account and doing things the right way....I can sleep better at night for sure.

Dawn

 

[seashoreCM]

But maybe there was no hope of his ever paying off a huge usurious mortgage loan on an overpriced house while he had a good chance of paying off a much smaller and reasonable mortgage loan on the much smaller home he has now.

 

[JENOS]

But maybe there was no hope of his ever paying off a huge usurious mortgage loan on an overpriced house while he had a good chance of paying off a much smaller and reasonable mortgage loan on the much smaller home he has now.

And then the logical thing to do is go on a cruise after your misfortunes.

 

[ccgirl]

It sounds like they actually purchased the house before the other foreclosed; correct? If the house were purchased after the foreclosure that would surprise me. Look at the Real Housewife of New Jersey cast. Teresa, I think that is her name, they filed for bankruptcy and live in a multi million dollar home with very expensive "things". I think if you should file bankruptcy, all that should be taken from you in order to settle your debt with the creditors.

OP - just know you are the better person.

 

[scbelleatheart]

Are you sure you are privy to all the facts of the entire situation? You say she's engaged to him so you may not be aware of many things.
It is possible to do this without scamming the system, filing bankruptcy, cheating, and paying off all that you owe. I'd be happy to share the details.
Don't be so quick to "call the IRS" until you know all the facts.

 

[bettymae1121]

But maybe there was no hope of his ever paying off a huge usurious mortgage loan on an overpriced house while he had a good chance of paying off a much smaller and reasonable mortgage loan on the much smaller home he has now.

And if that's the case, that's one thing. But if after you do that you take a cruise and install a new pool in your new house...yeah not buying the "it's what we had to do to keep a roof over our head" excuse.

A family hit by hard times that, since the house is being foreclosed on anyway, stops paying the mortgage completely and uses that money to save up for a deposit for an appartment or a down payment on a much cheaper home (or relocation expenses if you have to move for new employment, or a dozen other legitmate reasons) is fine. You've done everything you could to work the the bank, they won't budge, so you need a place to live once the sheriff comes to boot you out. Life happens, and you do what you can to get by. That's not what the OP is describing here.

 

[mistysue]

My next door neighbor did this last fall! They left in October and the house that sold for $140K four years ago is sitting on the market at $88K right now. They bought a bigger house across town, for more than the old house. They also bought a new car right before they moved out. He has a job that is under the table, she just became a nurse about 6 months earlier. (was full time student with no income before) They doubled their income, bought a new house and walked away from the old one. I haven't spoken to them, but I do hope they got in trouble.

For those of you who say ignore it, I can't ignore it when they are causing my property value to plummet! It is very likely DH and I will have to move out of state next summer and I am probably going to lose about $30K if I can even sell the house, in addition to my original $25K I put down and I have been overpaying my mortgage for over 6 years! This on a house that only cost $165K in the first place! So in the end I will pay about $105K for living in my house for 7 years, because of irresponsible people. I could have rented a better house down the street for less than half, plus not paying property taxes and paying to fix all the broken things! I might not be able to sell anyways, even priced right things in Michigan aren't selling. I'm not sure you could pay people to take houses here right now, and I'm serious about that.

 

[seashoreCM]

And if that's the case, that's one thing. But if after you do that you take a cruise and install a new pool in your new house...yeah not buying the "it's what we had to do to keep a roof over our head" excuse..

If the bank is going to charge me a much higher adjustable interest rate than the same bank charges my richer next door neighbor, just because it can, then I will not feel any remorse walking away from the loan and mortgage just because I can (if I can). And use the money I saved for Disney trips, cruises, etc.

Now I would give the bank a chance to refi me and price match what it advertised and/or offered to others.

We have heard of no-doc mortgages, VA mortgages, jumbo mortgages, etc. I think there should be (maybe there is) a "walk into" mortgage. If you already have an up to date mortgage loan, you walk into any participating bank and get it refi'ed at the rate advertised on the bank's window for any of its mortgage loans, with income requirements but ignoring property value, ignoring property location, and ignoring credit score, and with penalties for lying. In the actual situation, there were no such "walk into" loans and the alternative was to "walk away" instead. Meanwhile I do not agree with offering loans at interest rates much lower than what the banks aggressively advertised to anyone; those borrowers should be foreclosed upon.

 

[Anjelica]

If the bank is going to charge me a much higher adjustable interest rate than the same bank charges my richer next door neighbor, just because it can, then I will not feel any remorse walking away from the loan and mortgage just because I can (if I can). And use the money I saved for Disney trips, cruises, etc.

But did you not sign an agreement to pay xx amount even if it will become a higher adjustable interest rate?

 

[JENOS]

I guess the race to become (the joneses) is too irresistible to some.

 

[ccgirl]

If the bank is going to charge me a much higher adjustable interest rate than the same bank charges my richer next door neighbor, just because it can, then I will not feel any remorse walking away from the loan and mortgage just because I can (if I can). And use the money I saved for Disney trips, cruises, etc.

Now I would give the bank a chance to refi me and price match what it advertised and/or offered to others.

We have heard of no-doc mortgages, VA mortgages, jumbo mortgages, etc. I think there should be (maybe there is) a "walk into" mortgage. If you already have an up to date mortgage loan, you walk into any participating bank and get it refi'ed at the rate advertised on the bank's window for any of its mortgage loans, with income requirements but ignoring property value, ignoring property location, and ignoring credit score, and with penalties for lying. In the actual situation, there were no such "walk into" loans and the alternative was to "walk away" instead. Meanwhile I do not agree with offering loans at interest rates much lower than what the banks aggressively advertised to anyone; those borrowers should be foreclosed upon.

This makes no sense. I'm sure you signed mortgage papers. You knew you had an adjustable rate and that it could go up to x%. I can't stress enough that people need to read what they sign. The problem you describe then affects other people if you walk away. That is why the interest rates are so high for some people - because they are bigger credit risks. How can you ignore property value? You want a bank to give a mortgage for more than a house is worth? Not very good business practice at all. Then that person that refinanced walks away from their home because "they can" and the bank takes an enormous loss.

If everyone just buys a home that they can afford rather than what they qualify for there wouldn't be a problem. The exception, of course, is when someone unexpectedly loses their job or becomes sick/disabled in any way. Those are the people that should get the help. Not the people that agreed to these sub prime or adjustable mortgages and get upset when the interest rate goes too high. I know some people have no choice but to get an adjustable mortgage. I was one of those people. We paid on time for 2 years then refinanced to a fixed rate. My mortgage went up by $300 a month but it was better than waiting for the adjustable rate to go up; the mortgage would have gone up by more than $300 then.


Could we afford a bigger/better home? Absolutely, but I have learned the hard way twice that people can get laid off. So; we own a home that we can afford on one income.

 

[southern_redhead]

Wow! Yes we know a few people like that. One of them is a couple who "works" whatever system they can, the wife was arrested not once but TWICE for stealing money from work (at two different places) but people keep hiring her. They also kite checks and ran up CCs so they could declare bankruptcy. Of course, they have to do face time in court....may not bother them but it would shame me. Another guy keeps losing jobs due to failing drug tests but has another one within days....how does that work? I thought they called previous employers? Lastly, a girl I work with isn't dishonest at all but she is LAZY. My husband works tons of hours a week, I work 2 jobs and am looking at a third this year - she works one job under 40 hrs a week and then complains that she doesn't have what we do. She is taking out CCs and struggling to pay them, late on bills, etc... Very bad budgeting skills and a lack of work ethic. I wouldn't trade places with her.

Bottom line, I feel ya. We work our bunz off and we DO have/do some nice things and pay cash for them BUT it really burns me to see other people scamming their way to those same ideals. I wish we could work a little less and play a little more though!

 

[CowboyCO]

How in the world does someone go from having a house in forclosure and then turn around and buy a new house before the forclosure is over with? It seems a person in the family is engaged to such a person who has done this. In the mist of all this besides buying a new house they just put in a new pool, went on a cruise and after the cruise went to Disney World. This whole trip was over the course of 2 weeks.

WTH!?!?! What is my DH and I doing wrong? We would love to have a new house, but would never dream of just letting it go back to the bank.

It seems like if you don't play by the rules you get everything. If you do play by the rules you get crapped on!

So frustrated!!!

It will come back on them. Unless they just declare BK and walk away from it all.

It's more important how you live your life within your own morals. Right is right.

I've been over-extended in my life (climbing out of a hole now), but I would never walk away unless there was no choice.

 

[thelittlemermaid]

OP here......

The new house is bigger then the old one. The other house was bought for $90K in 2007. The new house was bought for $93,500 at the end of 2009, so you do the math on that one.

I don't know about a BK. He could have filed, but you know how some people don't like to advertise it while others do. Not sure where he works, if at all. She works for another countys sheriff's department. She has two kids, one she adopted last year and I believe that takes some money to do that.

I wouldn't call the IRS on them. Let them dig a huge hole and fall into it when they do get caught.

Oh to add....Their property taxes on the new house is WAY more then what they had to pay for the old house. If they could not afford the old house, I really don't see how they can afford this one. Blows my mine!

 

[LisaInNc]

My neighbor lost her job. She owned the house with her in laws. She was on the deed but not on the mortgage. They did everything they could to make ends meet but could not so they stopped making mortgage payments. It took the bank 32 months to forclose. At that time she could have bought another house since the mortgage wasn't in her name.

My neighbor wasn't a deadbeat at all but seeing how all that happened I can see how someone could bilk the system. Live free for almost 2 years and then use that money to buy another house.

Then there is a Fanny Mae act that offers the people 1,500 to MOVE out and clean out the house after the forclosure or they have to go through the process to evict them which takes even longer. It's called the Cash for Keys proeam. That is a chunk for a vacation.

It's the system. Some people try to scam it and some are just suffering from the economy. I watched my neighbor do everything they could to hold on to their house. An illness and a job loss 3 kids and food stamps. It was so sad.

I would not personally judge someone for that. It's her life, her karma, her soul etc.

Lisa