Are people still taking advantage of mortgage system today?

F

financeguy_IHB

New member
I've seen a bunch of articles on owners whose properties are worth less than their mortgages, simply buying a much cheaper foreclosure "next door" and defaulting on their own property. I was wondering if they can still do this now even with the tougher loan restrictions. Perhaps these articles were referring to earlier times.



I'm just really frustrated that my tax dollars are paying for all these mortgage abuses (including HELOCs) and I really hope that this kind of stuff is not still happening.
 
The lenders figured out the buy-and-bail game early on. The now make people qualify to make both payments without a renter before they will allow them to buy the second home. Besides preventing the buy-and-bail phenomenon, it is also stopping the move-up market because people find it almost impossible to own two homes simultaneously.
 
Buy and bail is easily prevented today what with guideline changes. Almost every week I get calls from people asking if it's OK to walk away from their home, even though the payment is affordable.



Nothing was ever a firm commitment today.



Also, the "I don't report my income... so why can't I buy this house with zero down" or "I'm buying this house in Dana Point as a second home even though I live in Laguna Beach" people are very much still in the market. There is no thwarting these buyers other than saying "no" which I am often finding myself doing.



My .02c



SGIP
 
[quote author="Soylent Green Is People" date=1242289645]Buy and bail is easily prevented today what with guideline changes. Almost every week I get calls from people asking if it's OK to walk away from their home, even though the payment is affordable.



Nothing was ever a firm commitment today.



Also, the "I don't report my income... so why can't I buy this house with zero down" or "I'm buying this house in Dana Point as a second home even though I live in Laguna Beach" people are very much still in the market. There is no thwarting these buyers other than saying "no" which I am often finding myself doing.



My .02c



SGIP</blockquote>
It's good to know that tighter underwriting standards have gotten rid of most of the margin buyers and speculators.
 
New Fannie Mae guideline...



Borrowers doing a purchase to upgrade their current residence must have a minimus of 30% equity in their current residence. Fannie Mae is requiring this to eliminate the possibility of potential "Walk Aways".
 
[quote author="sugarspunZ" date=1242433210]New Fannie Mae guideline...



Borrowers doing a purchase to upgrade their current residence must have a minimus of 30% equity in their current residence. Fannie Mae is requiring this to eliminate the possibility of potential "Walk Aways".</blockquote>


That will keep the high end very dead for a very long time.
 
[quote author="sugarspunZ" date=1242433210]New Fannie Mae guideline...



Borrowers doing a purchase to upgrade their current residence must have a minimus of 30% equity in their current residence. Fannie Mae is requiring this to eliminate the possibility of potential "Walk Aways".</blockquote>


So what about those buyers who actually can afford the 2 different payments but don't have 30% equity in their current home?

Are they S.O.L.?
 
[quote author="halfnote19" date=1242538874][quote author="sugarspunZ" date=1242433210]New Fannie Mae guideline...



Borrowers doing a purchase to upgrade their current residence must have a minimus of 30% equity in their current residence. Fannie Mae is requiring this to eliminate the possibility of potential "Walk Aways".</blockquote>


So what about those buyers who actually can afford the 2 different payments but don't have 30% equity in their current home?

Are they S.O.L.?</blockquote>


Yes, the assumption is that even if they can afford both payments, they won't bother if they go underwater. It is probably a good assumption on the lenders part.
 
[quote author="halfnote19" date=1242538874][quote author="sugarspunZ" date=1242433210]New Fannie Mae guideline...



Borrowers doing a purchase to upgrade their current residence must have a minimus of 30% equity in their current residence. Fannie Mae is requiring this to eliminate the possibility of potential "Walk Aways".</blockquote>


So what about those buyers who actually can afford the 2 different payments but don't have 30% equity in their current home?

Are they S.O.L.?</blockquote>


i think that as long as they qualify with both payments they will be ok however i dont know for sure. i will have find out on monday and post my findings.
 
You must log in or register to reply here.
Back
Top