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What should they do?
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Synomenon
Lifer
Fuck you. They could just as easily, but they didn't and haven't. They're still here and still paying.
They got a free appraisal from a family friend who does appraisals. My Dad has been in the US Air Force for the past 27 years. He just came back from two six month deployments in Iraq and one six month deployment in Afghanistan. Before Iraq / Afghanistan he did a two year deployment to Korea.
He's having health problems now (doctors can't figure out what's wrong) and might be medically discharged from the Air Force. He has been looking for a job since he got back from Afghanistan, but you all know how tough the job market is now. They'd have to file for bankruptcy and sell the home then move back to their old country if he can't get a job soon after being discharged.
Dr. Detroit
Diamond Member
This is America where no one should go without cable TV & a Cadillac in their driveway.
I would suggest your parents stop paying for the mortgage, gut the house and sell off the appliances, cabients, sinks, countertops, and doors. Obama will help them out as no one is allwoed to make a decision and be forced to accept responsibility.
*Seriously, they should purchase the house next door for $109K while their credit is excellent and then stop paying on their $350K house.
I would suggest your parents stop paying for the mortgage, gut the house and sell off the appliances, cabients, sinks, countertops, and doors. Obama will help them out as no one is allwoed to make a decision and be forced to accept responsibility.
*Seriously, they should purchase the house next door for $109K while their credit is excellent and then stop paying on their $350K house.
StageLeft
No Lifer
LOL your parents have seen a 2/3rd drop in their house? That is about as bad as I've heard.
In their case if their net worth is fairly high, they have to stomach this and it's a lesson they've learned, although the opportunity to act on it in their lifetime will probably never arise. If they don't have much other savings and I was in their shoes I'd play by the legal rules of the economy, which says stop paying and take the bankruptcy.
On the other hand, they should wonder what impact this really has living in an upside down house.
In their case if their net worth is fairly high, they have to stomach this and it's a lesson they've learned, although the opportunity to act on it in their lifetime will probably never arise. If they don't have much other savings and I was in their shoes I'd play by the legal rules of the economy, which says stop paying and take the bankruptcy.
On the other hand, they should wonder what impact this really has living in an upside down house.
Synomenon
Lifer
Yes, when they bought it they agreed to the 300k, but now things have changed (parents' situation and secondly, the market value of the home). There are 10 homes on this street and 9 of them are in foreclosure. What are they supposed to do when my Dad gets discharged and he can't find a new job? They have no problems making the payments right now, but what are they supposed to do when they can no longer make the payments? An adjustment to their mortgage would be better than them walking away from the home. How do they get this mortgage adjustment? Apparently (says the mortgage company), they need to become behind on their payments.
When it happens (discharge and no jobs found), would the mortgage company and banks rather they walk away? Or would the mortgage company and banks rather adjust their mortgage?
I came in to get various helpful opinions and advice, but as usual the high and mighty and holier than thou crowd had to come in to preach. Yes they should continue to pay the mortgage they signed. Yes they need to honor that contract, but what can they do if things happen that prevent them from fulfilling the obligations in the contract they signed?
MotionMan, I don't remember you being such an ass back in the Sudhian / SFFTech forums. It has been a long time though since I've been a regular there.
When it happens (discharge and no jobs found), would the mortgage company and banks rather they walk away? Or would the mortgage company and banks rather adjust their mortgage?
I came in to get various helpful opinions and advice, but as usual the high and mighty and holier than thou crowd had to come in to preach. Yes they should continue to pay the mortgage they signed. Yes they need to honor that contract, but what can they do if things happen that prevent them from fulfilling the obligations in the contract they signed?
MotionMan, I don't remember you being such an ass back in the Sudhian / SFFTech forums. It has been a long time though since I've been a regular there.
MotionMan
Lifer
You are changing the story. Until now it has been that they have no problem paying it is just that the house has lost value. Now you are talking about when (assuming that happens) your dad loses his job. If he loses his job and cannot may the payments, then, by all means, talk to the bank about their options.
You hit my hot button.
MotionMan
Bite the bullet and listen to the experts. This is about money. Some asshat, sitting by his monitor pontification crapp isn't going to change the fact that if your parents keep on paying, they are going to lose a lot of their hard earned money. Do the smart thing. It may not be the most "kosher" thing.. but having NO money during their golden years isn't fun either.
Billb2
Diamond Member
I'd wait for a couple of months and see what shakes out from the economic recovery plan(s).
Maybe some help will be forthcoming.
There millions of people in the same boat. The banks can't foreclose on all of then. The banks don't have enough capitol to do that, they can't stand the loss. The banks are caught in a catch 22. If peoples stop paying and If they foreclose they go belly up. If they don't foreclose they go belly up.
Right now your parents are the ones paying the principal and interest on their personal chunk of the "toxic debt".
Wait till the government decides how to deal with it.
You're catching a lot of crap because some of the toxic debt ( maybe 10%) is speculators (flippers), people who lied on their loan applications, people who financed 120% of their purchase price, etc. There are many honest, hardworking people in the same boat. The government has to figure out how to deal with "moral hazard" and then that will lead to a solution of the "toxic debt" problem.
And say thanks to your dad from me too.
Maybe some help will be forthcoming.
There millions of people in the same boat. The banks can't foreclose on all of then. The banks don't have enough capitol to do that, they can't stand the loss. The banks are caught in a catch 22. If peoples stop paying and If they foreclose they go belly up. If they don't foreclose they go belly up.
Right now your parents are the ones paying the principal and interest on their personal chunk of the "toxic debt".
Wait till the government decides how to deal with it.
You're catching a lot of crap because some of the toxic debt ( maybe 10%) is speculators (flippers), people who lied on their loan applications, people who financed 120% of their purchase price, etc. There are many honest, hardworking people in the same boat. The government has to figure out how to deal with "moral hazard" and then that will lead to a solution of the "toxic debt" problem.
And say thanks to your dad from me too.
Synomenon
Lifer
I'm not changing the story. I'm just adding facts I left out in the original post.
They don't have problems paying. They really don't want to pay for a house that's worth much less than the mortgage for the home, but they still do pay because they're not scumbags.
My Dad will probably be medically discharged if he doesn't voluntarily retire early from the AF.
If he can't find a job that pays as much as he's being paid by the AF then they won't be able to pay the mortgage.
They can file for bankruptcy or they can walk away.
The mortgage company suggested they become behind on their payments so that their mortgage can be adjusted. If they do this, they should be able to continue making payments even if my Dad can't find a job that pay as much as the AF does.
We've never heard of a mortgage company suggesting this last part (purposely becoming behind on payments to get mortgage adjusted) though. Should they do this?
Looks like most of you say no.
Sorry for all the confusion. Those are the main points.
Thanks to those who are genuinely trying to help.
KillerCharlie
Diamond Member
So you're expecting the bank to suck it up because the house lost value? Were you planning on giving the bank extra money if the house went up in value?
BoomerD
No Lifer
The point everyone (including me) is trying to make is that the house is still worth what they paid for it...until they try to sell it.
While it's lost a lot of its market value, the house is still the same one they bought for $305K.
I'll be surprised if the mortgage company can do anything but lower their interest rate. The selling price was $305K...that hasn't changed.
MAYBE, if the stimulus package "cramdowns" actually takes effect, then they MIGHT be able to get the prinicpal lowered...MAYBE.
Hell, my house has lost quite a bit of it's market value since 2005, but IMO, it's the same house we bought in 1999. It hasn't changed except for the work we've done to it....it's still worth (to us) what we paid for it.
IF your parents' financial situation changes, then bankruptcy and/or walking away from the house may be their only options.
(I've seen my income slashed by about 50% since 2003...yet we continue to struggle by.)
While it's lost a lot of its market value, the house is still the same one they bought for $305K.
I'll be surprised if the mortgage company can do anything but lower their interest rate. The selling price was $305K...that hasn't changed.
MAYBE, if the stimulus package "cramdowns" actually takes effect, then they MIGHT be able to get the prinicpal lowered...MAYBE.
Hell, my house has lost quite a bit of it's market value since 2005, but IMO, it's the same house we bought in 1999. It hasn't changed except for the work we've done to it....it's still worth (to us) what we paid for it.
IF your parents' financial situation changes, then bankruptcy and/or walking away from the house may be their only options.
(I've seen my income slashed by about 50% since 2003...yet we continue to struggle by.)
The WHOLE problem here is NOT the value of the house. The problem here is your parents have put themselves financially in a situation that they cannot maintain. It's no different than all of the other people who are currently in foreclosure, except your parents are actually able to make payments, they just want to get out of them because of their stupid mistake! You parents should have set aside money that is able to keep them afloat in the event of something just like this. Your dad has worked for 27 years and now they are already willing to walk away from a house when he hasn't even lost his job yet? Sounds like terrible financial planning.
Hell, your parents are actually worse. They are already looking to bail out of their house before anything happens!
You get no sympathy. You keep changing your story and adding these sob story details as you go along. You have been advised you have two options. Stop paying and ruin your credit, or pay what your parents signed a contract for.
"They aren't struggling to make the payments and haven't missed any payments, but they don't want to pay anymore for a home that's worth less than what they're paying on."
They don't want to - that's the whole truth right there.Your parents just want to bail out on their payments because they are in over their head. They probably purchased the property thinking it was going to continue increasing in price. But then again, I'm sure some other excuse will come up or detail that you forgot to give.
Not to mention, why is their child on ATOT asking for financial advice? Are they not adults and cannot seek advice from someone who knows what they are doing? Taking advice over the internet on a freaking computer forum is STUPID.
Hell, your parents are actually worse. They are already looking to bail out of their house before anything happens!
You get no sympathy. You keep changing your story and adding these sob story details as you go along. You have been advised you have two options. Stop paying and ruin your credit, or pay what your parents signed a contract for.
"They aren't struggling to make the payments and haven't missed any payments, but they don't want to pay anymore for a home that's worth less than what they're paying on."
They don't want to - that's the whole truth right there.Your parents just want to bail out on their payments because they are in over their head. They probably purchased the property thinking it was going to continue increasing in price. But then again, I'm sure some other excuse will come up or detail that you forgot to give.
Not to mention, why is their child on ATOT asking for financial advice? Are they not adults and cannot seek advice from someone who knows what they are doing? Taking advice over the internet on a freaking computer forum is STUPID.
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