Anyone an accountant here? Serious question

[SaltShaker]

So i got a condo, and like many people the condo is now assessed much less than what i owe on the mortgage.

i have no problem paying the mortgage now, and in fact i can even afford to buy a bigger place, but the problem is i want to get rid of my place before buying a new one.

So my question is this: If right now when my credit is good, can i get a loan and buy a new place, and then stop baying the mortgage of my old place? if so, what happens ?

i know for sure the bank will take my old house ( which i dont care), but can they come after me for more money? can they sue me for the new house or money in the bank etc?

and also, wil the new lender be able to increase my interest rate after this happens?

[pugalist666]

im not an accountant but it sounds like your about to fuck your self in the ass

[Red Hook]

So i got a condo, and like many people the condo is now assessed much less than what i owe on the mortgage.

i have no problem paying the mortgage now, and in fact i can even afford to buy a bigger place, but the problem is i want to get rid of my place before buying a new one.

So my question is this: If right now when my credit is good, can i get a loan and buy a new place, and then stop baying the mortgage of my old place? if so, what happens ?

i know for sure the bank will take my old house ( which i dont care), but can they come after me for more money? can they sue me for the new house or money in the bank etc?

and also, wil the new lender be able to increase my interest rate after this happens?

this is not really an accounting question but more so a financial planning question, it is also depends on the state laws.

in some states when the bank foreclose and sells the property they can seek the difference from you in a court of law. Meaning that you just can't want walk away.  

What you could do is attempt to have the bank "adjust" the mortgage based on the current value of the condo by pleading hardship.  

[rockyfortune]

So i got a condo, and like many people the condo is now assessed much less than what i owe on the mortgage.

i have no problem paying the mortgage now, and in fact i can even afford to buy a bigger place, but the problem is i want to get rid of my place before buying a new one.

So my question is this: If right now when my credit is good, can i get a loan and buy a new place, and then stop baying the mortgage of my old place? if so, what happens ?

i know for sure the bank will take my old house ( which i dont care), but can they come after me for more money? can they sue me for the new house or money in the bank etc?

and also, wil the new lender be able to increase my interest rate after this happens?

negotiate with the bank for a short sale...meaning..they'll accept what you sell it for to settle the mortgage you have with...although if you are current on the mortgage you have now with them i seriously doubt the would accept this situation...most short sales come when the owner has stopped paying on their mortgage because of financial hardships--you could try though.  with a short sale the bank will accept what you sell the place for to settle the mortgage and they won't come after you for the difference...however it's possible you'd get 1099 for the difference...either way...being delinquent or a short sale with a home is going to negatively affect your credit rating.

buy your new place..and rent out the condo you have now...

[Red Hook]

negotiate with the bank for a short sale...meaning..they'll accept what you sell it for to settle the mortgage you have with...although if you are current on the mortgage you have now with them i seriously doubt the would accept this situation...most short sales come when the owner has stopped paying on their mortgage because of financial hardships--you could try though.  with a short sale the bank will accept what you sell the place for to settle the mortgage and they won't come after you for the difference...however it's possible you'd get 1099 for the difference...either way...being delinquent or a short sale with a home is going to negatively affect your credit rating.

buy your new place..and rent out the condo you have now...

I agree, the problem that he will have is that most likely the rent roll won't cover the mortgage so he will have to pay the difference. Also the tenant won't take care of the place . Also since this isn't his primary residence he will have to pay taxes on the income, although he might be able to show a lost.

[Tapeworm]

Do you have fire insurance?

[boonasty]

im not an accountant but it sounds like your about to fuck your self in the ass

x2
as well as other people.  live up to your commitment salt.  

[SaltShaker]

x2
as well as other people.  live up to your commitment salt.  

seriously though i would probably never do this, i just wanted to see the downfalls.

what i dont understand it,  how would i be fucking other people over? The bank has still made tons of money from me, and they get to keep the house too... so who am i fucking over other than my own credit?

[rockyfortune]

seriously though i would probably never do this, i just wanted to see the downfalls.

what i dont understand it,  how would i be fucking other people over? The bank has still made tons of money from me, and they get to keep the house too... so who am i fucking over other than my own credit?

the bank lends it's customer's money out...when douches don't pay it back..and they have to spend money, time, and effort collecting it..or employing people to collect the bank doesn't absorb the costs..the depositers do--through higher interest rates, fees, etc...so yes..you are fucking others over.

[slacker]

So i got a condo, and like many people the condo is now assessed much less than what i owe on the mortgage.

i have no problem paying the mortgage now, and in fact i can even afford to buy a bigger place, but the problem is i want to get rid of my place before buying a new one.

So my question is this: If right now when my credit is good, can i get a loan and buy a new place, and then stop baying the mortgage of my old place? if so, what happens ?

i know for sure the bank will take my old house ( which i dont care), but can they come after me for more money? can they sue me for the new house or money in the bank etc?

and also, wil the new lender be able to increase my interest rate after this happens?

They will take your new place too. By the sounds of it I dont think you would qualify for a second mortgage.  Jusst sell you curent place and move on. 

[boonasty]

seriously though i would probably never do this,

good man.

[SaltShaker]

They will take your new place too. By the sounds of it I dont think you would qualify for a second mortgage.  Jusst sell you curent place and move on. 

how? where did you get this info?

[Grape Ape]

You're liable for the old place, regardless if you make the monthly payments or not. 

They'll put a lien on your new place.  Google lien.

If there were no serious implications, everyone would be doing this to rid themselves of their property that's financially in the red, and buy new property that's at a market low right now.

[newmom]

yes they can take you to civil matters and put a lien on your new place..maybe you can do a deed in lieu..basically you sign the house over to them..perhaps doing a short sale..perhaps you can rent it out..I would'nt just stop making the payments, it will ruin your credit, why blow a good credit score. How long have you been in the place currently?. Don't forget if you buy a new place you get a tax credit after being in it for 5 years

[Wiggs]

PM Bigbobs. He's an accountant.

[Ron]

There have been way too many people who have done this in the past 2 years or so.  Each state and bank which owns your loan has their own way of dealing with this.

One way is if you do walk away, and they do finally sell the place, they will send the IRS a 1099 for the difference, because this can be considered 'income' since you didnt pay it.  They will get out at the end someway.

Second is take you to court, but you can claim financial hardship and more, and it is very hard for them to get anything back out of it. Still, they can sue you for breach of contract, and if you do have money somewhere, they can get a judgement against you.

Third, there is something caleld the Homestead Act which provides protection so they cannot take your new home, in case something goes 'bad' on the old mortgage.  Not sure of exactly the terms of this, but someone, it has protected some people.

There are others issues too, such as having your credit being in the tank for 5-7 years too.  Which wont help if you want to get a new credit card, get a car or more. 


And yes, of course it hurts everyone.  When banks fail because of nonpayment of mortgages, people LOSE their jobs. Communities lose income and spending from the value of the jobs, and taxes. 

[Wingnut32]

^ I'd listen to him.  Those types know how to handle money.

[El Diablo Blanco]

YOU FOUND LOOPHOLE 101.

Here's the deal.  A lot of people did this.  They bought a house for $700k and love it but two years later the same house doors down with an extra 1000 sqft of space is for sale for $500k.  They put down 20%.  This is the key.  You will not get a second home loan without putting down 20%.  They move in, change this place to their primary residency and walk away from the first home.

They foreclose and the bank takes it.  here's the fun part.  It may take about 9 months to foreclose so a lot of people rent out the first place making pure profit since they are  not making mortgage payments.

If you are smart you also get any credit cards you want and  a car now.  Fuck the 5-7 year credit hit because.

A.  You have a home
B. You have a new car
C. You really don't need credit for anything else.

As long as you make your current home payments on time and your car loan etc... your rating will be right back up just in time for you to sell your new place and upgrade.

Remember, most first loans are non-recourse which means the banks can only take the home from you and that's it.  The house is the collateral.  So if you walk away, they get the home and you and the bank have no more issues.

If you refinanced then the loans are not non-recourse which means they can come after you.

That is why banks would love for people to refi, this way they have you on the hook for more than just the home.

You will have to show serious income, have a lot of cash for a hefty down payment before a bank would even consider giving you a loan for a second home, because they most likely know what your plans may be.

[El Diablo Blanco]

They will take your new place too. By the sounds of it I dont think you would qualify for a second mortgage.  Jusst sell you curent place and move on. 

This is not Canada fucktard.  The same rules don't apply.  The bank can only take the home that the loan is based on.  That's it.  Look up non-recourse loans.

[buffdnet]

so who am i fucking over other than my own credit?

everyone who has to meet higher credit requirements to get a loan
and
everyone who has to pay higher and higher bank/credit fees
all because of
fucktards like you

fuck them on the first house and go ahead, let them see your
purchase of the second on your credit report.
fucking criminal fuckwit

[Mr. Magoo]

who deleted my post?? 

[newmom]

also If you buy a new house that mortgage will be first in line..if you default on the old one and they put a lien on the new place it will be irrelavant until you sell or refinance..Remember, first in line first in time

[ManBearPig...]

here's a yahoo article that just came out a few minutes ago answering your question.


http://finance.yahoo.com/news/Mortgage-lenders-pursue-cnnm-3107909798.html?x=0

[dov]

This "something for nothing" society sickens me.

[erokyrwrld]

The bank can and will come after you.  The mortgage is the security on the house.  However, you also signed a loan.  When the bank forecloses and sells the property, they will likely get far less than the fair market value, leaving a large gap between what they recover and what you owe.  They can then come after you for this money and attach things like bank accounts or wages, or even put a lien on your new home.  This is never a viable option if you have assets.  Plus, you'll fuck your credit score.  Better bet is to try the short sale option and hope for some loan forgiveness.