What should they do?

[Synomenon]

I don't know much about this mortgage / financial stuff, but here it goes:

My parents bought a home in 2005. When they bought it, it was $305k and they got the mortgage for it.

Almost every other home in the neighborhood has been foreclosed on now and when they got the house appraised last week, they found that it is now worth only $109k. They're still paying that $305k mortgage though.

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. It doesn't make sense to right? They've called their mortgage company to try and change their mortgage amount, but the mortgage company says they can't help my parents unless my parents have gotten behind on their payments.

What should they do if the mortgage company won't help them? Should my parents walk away from the home or purposely get behind on their mortgage payments?

 

[BoomerD]

The mortgage company should do nothing. Your parents paid $305,000 for a house. Do they expect the seller to give them a rebate because the price dropped?

If they get behind in their payments, the mortgage company MIGHT lower their rates...MIGHT...but not their principal amount...and their credit will take a huge hit.

If they walk away from the house...good luck buying another one for many years...if ever...

 

[Hacp]

Originally posted by: IsLNdbOi
I don't know much about this mortgage / financial stuff, but here it goes:

My parents bought a home in 2005. When they bought it, it was $305k and they got the mortgage for it.

Almost every other home in the neighborhood has been foreclosed on now and when they got the house appraised last week, they found that it is now worth only $109k. They're still paying that $305k mortgage though.

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. It doesn't make sense to right? They've called their mortgage company to try and change their mortgage amount, but the mortgage company says they can't help my parents unless my parents have gotten behind on their payments.

What should they do if the mortgage company won't help them? Should my parents walk away from the home or purposely get behind on their mortgage payments?

they should pay the mortgage

 

[HappyPuppy]

Walking away from the home isn't all that easy if they have money. The bank will foreclose, sell at a loss and sue for the difference + other costs.

 

[waggy]

continue paying for a house they signed a contract for?

 

[waggy]

Originally posted by: HappyPuppy
Walking away from the home isn't all that easy if they have money. The bank will foreclose, sell at a loss and sue for the difference + other costs.

and i hope that this is what happens if they walk away from it.

 

[jagec]

They paid an inflated price for an inflated product. Sucks to be them.

This is the equivalent of the iphone early adopters griping when Apple lowered the price. Sucks, but that's market dynamics. Apple never should have given them that stupid rebate.

/edit: Besides, why should they care what the house currently appraises at? They thought it was worth $300k back in the day. Are they a bunch of filthy flippers who were hoping to make a quick buck by catching the bubble?

Stay in the house, enjoy the MUCH lower property taxes, and wait it out. Once prices pick back up (and they will), they can sell or leave the house to their children.

I've got stocks right now which are worth MUCH less than when I bought them. Should I write to the government to complain and get them to pay me for the difference? No, I just don't sell and thus realize the loss.

 

[spaceman]

beyond scorn, i doubt you will get much helpful advice here.

 

[amdskip]

Basically you described buying a $50 game and a few years later it is the $10 bin at the store and you now expect the store to give you money back now. Not happening, your parents unfortunately purchased the home at a very bad time.

 

[waffleironhead]

Why should the mortgage company help them? They lent your parents money to pay for a home. The money went to the seller. It is not the lenders fault the perceived value for the home has dipped. Tell your parents to take personal responsibility for their debts.

 

[spidey07]

They pretty much have to hold onto the house. It will eventually get back unless you're in a really bad market with no future (michigan).

 

[Synomenon]

Yeah, they know they signed a contract for 305k and that's why they're still paying. They are taking personal responsibility by still paying every month. I didn't say they had stopped paying.

If you read the first post, all I asked was:

"What should they do if the mortgage company won't help them? Should my parents walk away from the home or purposely get behind on their mortgage payments?"

The agents at the mortgage company are actually the ones that suggested to my parents that they should get behind on their payments so they (the mortgage company) could restructure their mortgage.

The mortgage company said that they're overloaded right now re-working other peoples' mortgages and they can't do the same for my parents until they get behind on their payments.

Originally posted by: spaceman
beyond scorn, i doubt you will get much helpful advice here.

I expected that, but was hoping there were others here who were experiencing the same thing. I forgot though that this is ATOT where everyone is obscenely rich and drives around in BMWs, Mercedes and owns mansions.

 

[MotionMan]

Originally posted by: IsLNdbOi
I don't know much about this mortgage / financial stuff, but here it goes:

Thank you Captain Obvious - You must have learned all you know about such things from your parents.

Honestly, unless they cannot pay their mortgage or were looking to sell, they should get the house re-assessed, pay their mortgage and watch as house prices creep back up over the years.

MotionMan

 

[compuwiz1]

They need to think longer term. While the house may have depreciated, in actuality it was probably never worth $300k. There was a falsly inflated market. Maybe over time they can regain some value. As long as they can make the payments, they are obligated to do so, just like any other thing you sign a contract for.

Also, this is the business of your parents that you are airing out on the internet. Unless you have a financial stake in the situation, ie., making the payments, this really should not concern or involve you. It's their lives, their mortgage and their business.

 

[spidey07]

Originally posted by: IsLNdbOi

The agents at the mortgage company are actually the ones that suggested to my parents that they should get behind on their payments so they (the mortgage company) could restructure their mortgage.

WHAT!!!???

So this is why housing is so screwed up if you have agents actively suggesting to not pay.

 

[Synomenon]

Originally posted by: MotionMan

Originally posted by: IsLNdbOi
I don't know much about this mortgage / financial stuff, but here it goes:

Thank you Captain Obvious - You must have learned all you know about such things from your parents.

Honestly, unless they cannot pay their mortgage or were looking to sell, they should get the house re-assessed, pay their mortgage and watch as house prices creep back up over the years.

MotionMan

No need to be an ass.

They needed a home and are paying for it. They aren't having difficulty paying, but there's the logical side (to stop paying for something that's not worth anything) and the ethical side (to pay for something they signed a contract for).

They don't really care about their credit anymore. They could just as easily take the money they've saved up the past 25 years here in the US, move back to where they came from and live comfortably there as they could just walk away from the home.

That hasn't crossed their minds though. They're good people and they do the responsible thing unless it really doesn't make sense to.

Originally posted by: spidey07

Originally posted by: IsLNdbOi

The agents at the mortgage company are actually the ones that suggested to my parents that they should get behind on their payments so they (the mortgage company) could restructure their mortgage.

WHAT!!!???

So this is why housing is so screwed up if you have agents actively suggesting to not pay.

This conversation with the agent was on speakerphone and I couldn't believe it either when I heard what he said.

 

[Adam8281]

They should tell the bank that they'll walk away from the house unless the bank alters the mortgate. But I think Obama's housing bill is supposed to help your parent's situation, google "mortgage cramdowns"

 

[jagec]

Originally posted by: IsLNdbOi

Originally posted by: spaceman
beyond scorn, i doubt you will get much helpful advice here.

I expected that, but was hoping there were others here who were experiencing the same thing. I forgot though that this is ATOT where everyone is obscenely rich and drives around in BMWs, Mercedes and owns mansions.

No, I'm far from rich but I don't take on debt that I can't pay, and I pay all of my debts.

I mentioned that my stocks VASTLY decreased in value. If I had bought these stocks on credit, could I ask the government to reduce my payments since the current value of the stocks is so much lower than the sum total of my payments? No, that is ridiculous. Same situation. It's called a real estate market for a reason. Your parents bought at a bad time.

 

[Synomenon]

... and I've already mentioned that they aren't having any trouble paying the debt.

 

[waggy]

Originally posted by: IsLNdbOi
... and I've already mentioned that they aren't having any trouble paying the debt.

ok. so they would rather be a paice of shit and not pay for something they agreed to pay for. instead they want to get out of it. gotcha.


yeah that is sooo much better then not being able to pay for it..

 

[amdhunter]

I wish prices on homes in NY would lose value by that much. I want to buy something so bad, but am not dumb enough to spend more than I can afford.

 

[spaceman]

remember...this isnt your fault.

 

[LikeLinus]

" They could just as easily take the money they've saved up the past 25 years here in the US, move back to where they came from and live comfortably there as they could just walk away from the home."

Tell those fuckers to leave and take you with them. Good riddence.

 

[MotionMan]

Originally posted by: IsLNdbOi

Originally posted by: MotionMan

Originally posted by: IsLNdbOi
I don't know much about this mortgage / financial stuff, but here it goes:

Thank you Captain Obvious - You must have learned all you know about such things from your parents.

Honestly, unless they cannot pay their mortgage or were looking to sell, they should get the house re-assessed, pay their mortgage and watch as house prices creep back up over the years.

MotionMan

No need to be an ass.

They needed a home and are paying for it. They aren't having difficulty paying, but there's the logical side (to stop paying for something that's not worth anything) and the ethical side (to pay for something they signed a contract for).

They don't really care about their credit anymore. They could just as easily take the money they've saved up the past 25 years here in the US, move back to where they came from and live comfortably there as they could just walk away from the home.

That hasn't crossed their minds though. They're good people and they do the responsible thing unless it really doesn't make sense to.

Originally posted by: spidey07

Originally posted by: IsLNdbOi

The agents at the mortgage company are actually the ones that suggested to my parents that they should get behind on their payments so they (the mortgage company) could restructure their mortgage.

WHAT!!!???

So this is why housing is so screwed up if you have agents actively suggesting to not pay.

This conversation with the agent was on speakerphone and I couldn't believe it either when I heard what he said.

Actually, I think I did need to be an ass. What you're saying is that they have no problem paying for a debt they knowingly took on and, now that the item has lost value, they want to back out of the deal?

Learn a little about new car loans and get back to us.

MotionMan

 

[Synomenon]

I didn't say they want to back out of the deal. They just wanted to know if there were any options that the mortgage company would agree to. If the mortgage company does have something they could agree to, then what's the problem. The mortgage company is the one agreeing to it. This is obviously the wrong place to ask though since ATOT isn't the mortgage company.

Originally posted by: waggy

Originally posted by: IsLNdbOi
... and I've already mentioned that they aren't having any trouble paying the debt.

ok. so they would rather be a paice of shit and not pay for something they agreed to pay for. instead they want to get out of it. gotcha.


yeah that is sooo much better then not being able to pay for it..

Please learn to read. I did not say they aren't going to pay. The whole point of this thread was to get some opinions on what they should do. They are paying for it still and don't plan to stop paying unless some authority from the mortgage company tells them to stop paying.

Originally posted by: amdhunter
I wish prices on homes in NY would lose value by that much. I want to buy something so bad, but am not dumb enough to spend more than I can afford.

Please learn to read as well. They can afford it. They aren't having any trouble paying.

Originally posted by: spaceman
remember...this isnt your fault.

Huh?