Escaping an Upside down mortgage?

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I was wondering if this could be a solution to my Fiancee’s debit crisis. Soon to be my debit crisis.

My fiancee bought a home in southern california 3 years ago. He got in on an interest only zero down loan. He paid $ 389,000 now that the market has dropped and there are forclosures all over our neighborhood our home is worth maybe half that. We already narrowly refinanced into another interest only loan because the first one adjusted. Anyways long story short we are paying a huge mortgage and huge taxes on something we really cant afford..

Is this an answer?… What if I were to buy a home in my name with the current market prices, and he let his forclose. If I did this would I have to do it before we are married or could it happen sometime after? Pros cons? Id love to hear them.

Thanks!

6 Comments
  1. Reply
    acermill
    January 27, 2011 at 8:27 am

    Your fiancee is paying the price now for the silly error of taking an interest only zero down loan. Could you explain to us why you think it proper for the mortgage lender (who provided $ 389,000 to your fiancee) to write off half of that because the market values have dropped ?

    If your fiancee were able to sell this house for $ 525,000, would he freely give the profits to the lender because the market has RISEN?

    Sorry, but you’re not going to get advice from me on how to easily avoid your fiancee’s financial responsibilities.

  2. Reply
    budhah1
    January 27, 2011 at 9:12 am

    Yep he screwed up.. so what. You buy your house, and then get married, either way he is still responsible for the house, but at least you have yours. The bank I don’t think can take yours, but they can make both of you pay for his, or foreclose on it.

  3. Reply
    Mike
    January 27, 2011 at 9:51 am

    My friends in the real estate business say that your boyfriend should be punished for his bad decision.

    In my opinion these people in the real estate business are supposed to know what they are doing and should not have advised your boyfriend to get into a loan that he would not be able to repay when it adjusted upward.

    I can remember when adjustable rate loans became popular.

    The loan officer was supposed to determine what the maximum payments would be and maike certain that you would have the ability to make the payments even if the loan adjusted all the way up to its maximum limit.

    The reason we are in this crisis is that the real estate brokers, mortgage brokers and loan officers apparently stopped doing that several years ago. In some cases the even lied to people and told them the adjustable rate loans that they were giving them were fixed rate loans.

    Now all of these loans are adjusting and people cannot make the new payments.

    At least your mortgage broker was honest enough to tell you that you have an adjustable rate mortgage.

    One of my colleagues several years ago bought a house.

    She was told that the loan was a 30 years fixed rate loan.

    Fortunately she was able to get the loan officer to give her that in writing.

    She was actually given an adjustable rate loan.

    When the loan adjusted upward she refused to make the new payment and continued to make payments at the old amount, and informed the lender that she had been told that this was a 30 year fixed rate loan.

    The lender refused to accept her payments at the old amount and foreclosed. and took the property back at a Trustee’s Sale.

    I helped my colleague make complaints against the real estate brokers with the local District Attorney’s anti fraud unit and the Department of Real Estate.

    The local District Attorney is very aggressive about this sort of fraud and went after the Broker that owned the real estate office and the agents involved.

    The result was that the company lost its Century 21 Franchise and also the Department of Real Estate is now looking at revoking the real estate licenses of the agents and broker involved.

    I also arranged for my attoreny to tke her case against the lender. Fortunately the lender is one of the large ones and is still in business.

    My attorney says that she has a good case of fraud against the lender and it appears that the lender will settle out of court and pay her damages rather than let the case go to trial.

    My colleague appears to have been one of the lucky ones, and even so, this has taken over two years now and it still is not resolved.

    Now I see that this real estate broker has become one of our top local new stories for cases of fraud.

    There have recently been several more front page stories about fraud committed by the real estate broker and mortgage broker on other people as well.

    My colleague was not the only one.

    My attorney has picked up a few more of those cases.

    My attorney is going to be busy for some time.

    I would contact an attorney and investigate whether or not this mortgaqge that they gave your fiance was fraudulent in any way.

    Also, we need tochange the laws for the future. Right now is a good time to get involved in the Political Process.

    You can make a great deal of difference at the Congressional level.

    Find out who the congressman is for your district. Get to knoiw your Congressman well and get hiis commitment that heor she will support tough new laws to clean up the corruption, fraud and incompetence that is widespread in the real estate and lending industry.

    I am currently helping a Democratic Candidate for Congress who is commited to rooting out the fraud and corruption in the real estate and lending industry.

    We are going after a do nothing Republican Congressman who thinks that everything is fine and wonderful in the real estate and lending industry and that there is no need to root out the fraud and corruption.

    We will win by a huge landslide and send this dimwit Republican Congressman packing and we will be holding hearings on this issue in Washington DC start ing the day after inuguration of the new administration in 2009.

    The days of the frauds the corrupt and the incompetent in the real estate and lending industry are numbered.

    I hope to see you and your new husband in Washington DC.

  4. Reply
    Janet S
    January 27, 2011 at 9:56 am

    Hi there- I too live in Southern California, I also practice Real Estate in the area. I have a couple of thoughts for you:

    1)Has your fiancee tried talking to the bank to negotiate terms that work for everyone? I have a finance background and I know that the bank doesn’t want you guys to foreclose. Try working with them on the loan to get something that is manageable for you guys.

    2)Talk to a Real Estate agent in your area that specializes in this type of situation. There are many out there. If you need my help finding an agent for your area that has a background in this type of problem, contact me at janet@callmalibuhome.com.

    3)Finally, foreclosure is very bad for your credit and if you are to marry this man you will also be affected by this credit rating. It is always best to do whatever possible to avoid foreclosing. If you list the home for sale and highlight that it is a possible foreclosure you may have many more possible buyers. It’s a buyers market right now, but only for “perceived deals”, so market your house as a “deal”

  5. Reply
    arch0049
    January 27, 2011 at 10:25 am

    As long as you are not married and not using his credit or income to apply for YOUR house, yes it will work.

  6. Reply
    Jennifer
    January 27, 2011 at 10:38 am

    Hi,
    I used “Credit Solution” to settle my loans.They managed to reduce my loans up to 58% .It’s legitimate.I came across this company on NBC News Special Edition.Check it out here:
    http://shrinkurl.us/vfq

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