Buy and Bail: Fraud or Fair Play

I just read an article from the Press Enterprise telling its readers about acts of Fraud perpetrated on innocent Mortgage Companies. WHAT? These same mortgage companies that gave out bad loans like candy are now reported as the victim? The writer is less than objective and the article is nothing more than scare tactics. One commenter in particular was very astute at summarizing the real root of why buying a new home before letting your current home go back to the bank will never get anyone in trouble with the law or with their new mortgage company. In a nut shell: if you state you’ll be leasing out your current home and living in the new one, the lender really doesn’t care whether you actually lease it out or not. What he does care about is that you make your new mortgage payment; he doesn’t care what happens to the old home as long as you pay your new mortgage payment. Does anyone honestly think the new mortgage lender will say “Wait a minute; you let your old home go into foreclosure when you told me you were leasing it out...you lied so I’m going to foreclose on you too, even though you pay your mortgage payment on time every month.” Does anyone really think that will happen? No it won’t. The new lender simply wants you to make your payment...so if you loose your job, get a demotion or your pay is cut, as long as you keep making that payment the lender could care less about your situation. They are in business to make money not trouble for themselves.

Read it and Have a Good Laugh...Look for admirers comments

http://www.pe.com/business/realestate/stories/PE_News_Local_S_cheaters31.45b183a.html

Actions and Consequences: Buying Before Foreclosure

Loosing a home to foreclosure is never an easy choice but for some people it may not even be a choice...for others, they weigh the consequences and make an educated decision. Which ever scenario applies there are definitely hurdles to over come and penalties that apply. Many people over look the causes and focus on the action without taking into consideration that most banks expect people to get foreclosed on. That’s why they structure their mortgage contract to spell out exactly what steps will be taken to protect their interest in the property. It’s business for them and nothing more.

When banks started making money easier, they knew there would be people who would default. What they didn’t realize is the magnitude of the crisis they created. With the nation facing foreclosure, home prices falling and neighborhoods turning to ghost towns is it a wonder that people who aren’t loosing their home are letting it go into foreclosure also? Picture this:

Mr. and Mrs. Taylor bought a home they could afford. They put 20% down and were very comfortable with their payment. Many of their neighbors however were not as responsible and chose to buy more home than they could afford and applied for a bad loan to do it with, banking on future equity to bail them out. So, now the crisis hits and people everywhere are stuck. They have a house worth far less than they owe and have a payment they simply can’t afford. What choice do they have but to let it go?

Now let’s look at Mr. and Mrs. Taylor again. They are happy with their home. Unfortunately everyone around them is loosing theirs. The neighborhood is slowly turning into a slum as vacant homes are vandalized. Yards are dead. The value of their home declines further and they start to realize they have made a mistake also. The home they invested in is now worth far less than they owe as well, despite their 20% down payment. What should they do? Should they stay in a home where they could be paying on a mortgage for literally years before they break even or should they use their good credit to escape this mess? A mess that was never their fault to begin? They are an innocent victim of the foreclosure crisis.

Should they buy another home then let theirs go into foreclosed or sell as a short sale? Or should they suffer the upcoming years of a mortgage and home that are worth less than they owe; paying money into limbo never to be seen again. If they buy another home now they’ll have a new loan for less than they are paying now, bought in a market where equity is guaranteed in the next 5 years. It’s not an easy choice because Mr. and Mrs. Taylor have always taken their responsibilities seriously. Do they do the right thing or the smart thing? This choice is one being considered all over the United States and more and more people are making the smart choice, knowing full well the consequences they’ll have to deal with.