American Entitlement Mentality: Why Should We Pay Our Mortgage When We Can Eat Steak Instead!!

[Dan J 277]

Walk away from your mortgage? Be prepared to have ruined credit for the next 7-10 years. I don't see a good deal in that!

There is NO free lunch, people.

In any decisions you weight the pros and cons. Depending on the situation, that may not be that bad.

[Rebecca Jo 1,962]

Where I live, so many have walked away that they have driven the home prices on the couthouse steps to 25% or less of what the house sold for a couple of years ago... these people are in amortgage paying acouple thousand each month... or supposed to be... they instead stop paying the 2k/mo and bank it (hide it) ... a year or more later, they finally get the boot from the house or they can get a check from the govt/lender to walk out of the house if it goes into a short sale... so they can have possibly 25k or more saved up in the meantime... they then rent the same size house for 800 to 1k/mo.... they have enough money saved to buy a new car or pay the rent for a couple of years...

its short term thinking... why worry about our credit when we can have so much $ in our pockets..

I have a problem with this in so many ways..primarily the fact that they entered into a contract to repay the $... so repay it... we have rules to live by as a society.. there should be accountability...

For the investor,,, that same house that they walked away from can be paid off in less than 7 years when someone buys it and rents it out... this is causing the cost of living to drop in one way.. a good thing of sorts...hopefully people will start making better financial decisions as a result and save money.... I know its not likely... IMO they will take that extra $ and go on vacations or buy new tires and rimz....... or head out on that new airboat...

Aren't those some of the same houses you are 'picking up on the side' to rent now?

[SuperDuper! 230]

In any decisions you weight the pros and cons. Depending on the situation, that may not be that bad.

Sorry, but being irresponsible and not living up to your obligations IS bad. Who socialized you, btw?

Peace.

[Dan J 277]

Sorry, but being irresponsible and not living up to your obligations IS bad. Who socialized you, btw?

Peace.

The market does not understand ethics or morality. It doesn't care if someone does or doesn't do the "right thing". If you have a liability that you can no longer handle, you can get rid of them through foreclosure or bankruptcy. It's not without consequences, your credit worthiness will be ####### for awhile. Companies make these kind of decisions all the time, why is it "wrong" if a consumer does?

[lostinblue 1,989]

The market does not understand ethics or morality. It doesn't care if someone does or doesn't do the "right thing". If you have a liability that you can no longer handle, you can get rid of them through foreclosure or bankruptcy. It's not without consequences, your credit worthiness will be ####### for awhile. Companies make these kind of decisions all the time, why is it "wrong" if a consumer does?

In the future a required 30 percent down payment would prevent this when you decide to buy a home.

[Hilarious Clinton 452]

Evict the non-mortgage paying scum.

[evli1966 88]

Aren't those some of the same houses you are 'picking up on the side' to rent now?

Yup I am and for pennies on the dollar.

BTW anyone can do that is is easy as pie.

You make a purchase so that the apraised value of the home is more than the offer you make a minimum of 40%.

No money down with 10% cash back to renovate and get ready to rent.

I have not had a house sit longer than 15 days without a signed lease.

Rent should match the market but be about 1.5x your mortgage so the mortgage is paid each month, you put back enough to make 3 months of payments a little off each month to pay insurance and turnkey costs and then you take a piece.

There is no real cash flow for you until the 6 months payments is stockpiles (this is for security) and once the house is paid off then it is all money.

If the market climbs enough I may sell but my goal here is 1.5 the market value of what I purchased it for; might be a high goal but I don't need to sell.

BTW I am defintiely not a real estate guru or and educated man, just a sandwich maker in profession and realize there is risk in it all.

Tip is buy homes that are valued no more than $75k payments for a 25year mortgage at $50k buy making this purchase you have increased your net worth and borrowing capaicity.

mortgage =$521 with approx. tax&ins rent=$775-800

After stockpiling your reserve payments of 3 months then you get to take out some for yourself or do what I do and make principle payments.

[Dan J 277]

In the future a required 30 percent down payment would prevent this when you decide to buy a home.

That probably wont happen. For a couple of reasons.

1. Banks/Investors wont get enough customers.

2. We still have this false notion in this country that home ownership is a path to wealth and we should subsidize everyone buying a home. I don't think programs like FHA are going away any time soon.

[evli1966 88]

That probably wont happen. For a couple of reasons.

1. Banks/Investors wont get enough customers.

2. We still have this false notion in this country that home ownership is a path to wealth and we should subsidize everyone buying a home. I don't think programs like FHA are going away any time soon.

It is not a false sense it is the lack of diversification, uneducated/incompetitant borrowers and Predatory lending practices

having all your eggs in the same basket is dangerous; especially if the bottom falls out.

people borrowing money to only pay interest in hopes of being able to pay later is stupid practice to say the least and that is what the Predatory Loan Officers used.

I agree paying more down is the way to go but is not a neccessity people tend to think new is better and new is expensive and most often lower quality.

An older home typically has better quality and if it has been maintained will have less costs associated with it.

If a person purchased a home that is valued at a reasonable level say 100k and they pay 50k for it that means they still owe 50k and their actual networth is not affected but as they pay off this home/property their networth increases. It gets more complicated with commercial realestate or rental property that has signed leases (value goes up depending on revenue from the said property)

If that property was purchased for 40k then their actual networth increased by 10k again debt on the property can affect this becasue owing on the property is not owning said property.

If that property is purchased for 100k then same scenario works out it just takes longer to make your money back and increase networth.

If the property is purchased for 110k then you shrunk your networth by 20k and your still debt. if you borrow or spend 10k you need 20k just to get back to where you were before.

The issue is also the idea that the property value is worth more than it is and people purchase it with that notion; this is the cause of ballooning.

I apologize for my wording if it is not the correct words to say the above in but this is the how it works and I am educated in the terms of finace and real estate ..I just buy it and rent/sell it; on the side.

Edited June 6, 2010 by evli1966

[Rebecca Jo 1,962]

It is not a false sense it is the lack of diversification, uneducated/incompetitant borrowers and Predatory lending practices

having all your eggs in the same basket is dangerous; especially if the bottom falls out.

people borrowing money to only pay interest in hopes of being able to pay later is stupid practice to say the least and that is what the Predatory Loan Officers used.

I agree paying more down is the way to go but is not a neccessity people tend to think new is better and new is expensive and most often lower quality.

An older home typically has better quality and if it has been maintained will have less costs associated with it.

If a person purchased a home that is valued at a reasonable level say 100k and they pay 50k for it that means they still owe 50k and their actual networth is not affected but as they pay off this home/property their networth increases. It gets more complicated with commercial realestate or rental property that has signed leases (value goes up depending on revenue from the said property)

If that property was purchased for 40k then their actual networth increased by 10k again debt on the property can affect this becasue owing on the property is not owning said property.

If that property is purchased for 100k then same scenario works out it just takes longer to make your money back and increase networth.

If the property is purchased for 110k then you shrunk your networth by 20k and your still debt. if you borrow or spend 10k you need 20k just to get back to where you were before.

The issue is also the idea that the property value is worth more than it is and people purchase it with that notion; this is the cause of ballooning.

I apologize for my wording if it is not the correct words to say the above in but this is the how it works and I am educated in the terms of finace and real estate ..I just buy it and rent/sell it; on the side.

[ScottThuy 140]

Aren't those some of the same houses you are 'picking up on the side' to rent now?

Yep..

I'm not going to turn down a way to make $... If I and others like me were not doing this, the values wouldlikely drop further...

[Rebecca Jo 1,962]

Yep..

I'm not going to turn down a way to make $... If I and others like me were not doing this, the values wouldlikely drop further...

There's just something about your posts in this thread and this one:

http://www.visajourney.com/forums/topic/259557-growing-ranks-of-long-term-jobless-face-tough-odds/page__view__findpost__p__3982213

that I find to be hypocritical.

I mean, if it weren't for the amoral unemployed, you wouldn't have a pipeline for your new wealth. I really think you should be encouraging layoffs and downturns. It's good for you!

[evli1966 88]

I guess you laugh becasue you live in one of the most bloated realestate markets in the USA.

If you wish to contribute more than normal trolling to say nothing of use then please do so.

It is not our fault these people are in the mess they are in and it is not our fault the banks used poor lending practices.

It is not our responsibility to pick up their mess or pay for the problems they caused themselves.

Me I will continue to not buy into bloated markets that force people into bankrupty and foreclosure while at the same time I will make purchases that are legal and honest and that I can afford.

[Rebecca Jo 1,962]

I guess you laugh becasue you live in one of the most bloated realestate markets in the USA.

If you wish to contribute more than normal trolling to say nothing of use then please do so.

It is not our fault these people are in the mess they are in and it is not our fault the banks used poor lending practices.

It is not our responsibility to pick up their mess or pay for the problems they caused themselves.

Me I will continue to not buy into bloated markets that force people into bankrupty and foreclosure while at the same time I will make purchases that are legal and honest and that I can afford.

I'm laughing at that old robber-baron scam. Oldest trick in the book.

[evli1966 88]

I'm laughing at that old robber-baron scam. Oldest trick in the book.

My apologies thought you were being more deviant than that.

I am not sure that this is classified as Robber-Barons

I did not foreclose on them nor did I lend them the money.

I am purchasing houses from the banks; now I have heard of people selling that will sell at a loss of equity to be rid of a property but I have not witnessed this.