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Thread: Question for all you home loan/financial types

  1. #1
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    Question for all you home loan/financial types

    I have a girlfriend who has a house that she originally bought for $150,000ish and she refinanced to get out of debt a couple of times and bumped that mortgage up to over $200,000. Her payment is now $1800.00.

    The house down the street sold last week for $99,000. It was going into foreclosure and there are three others doing the same.

    She is freaking out..... Will she ever get out? What is there for her to do? She has a good job for now...but with the economy one never knows.
    T12-L2; Burst fracture L1: Incomplete walking with AFO's and cane since 1989

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  2. #2
    She should talk to a financial advisor. A real one, not one of these get out of debt bums on TV. Also a CPA and property lawyer, may be of some help. I think there is program to drop some of your mortgage if you are upside down on the house. I just got my interest rate lowered to 3 1/4 for no charge. Couldn't believe it. Keep waiting for the other shoe to drop through the whole process, but never cost me a cent.

  3. #3
    she would probably have to come up with cash to refinance now...due to the LTV(loan to value)....if she bought for 150k, how long ago?...if it was before the crash the home value was rising , allowing her to refinance and take $ to use for bills,etc.....now with the market crash, her home is valued below her mortgage..so the appraisal is gonna be below what she needs to borrow....ie(your home is now only worth 100k, but you owe 200k on existing mortgage)....
    if she can afford it, just keep paying on time, hoping the market value comes back again...u cant sell it, unless u have the money to pay the difference between value(what u sell for) and loan total..in your case-100k or so difference to pay out of your pocket....thats y there are soo many foreclosures these days.....people cant afford to do either choice..and just stop paying..eventually to lose the home . its tough times for anyone who bought at the height of the real estate market and payed top $...
    personally i lucked out...... i paid only 95k in 1998 (3bd 2 bth, inground pool, 2 miles from ocean in ft lauderdale fl)...only 6 yrs or so later..in about 2004, my neighborhood was selling for 300k for a 3/2 w/pool....now, its around 150k or so tops.....so im still good, but for someone who bought during the 300k period, theyve lost bigtime.......
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  4. #4
    She absolutely needs to consult a tax advisor. A loan reduction, foreclosure or short sale can have some pretty heavy tax consequences. The difference between what she currently owes and what is ultimately paid against the loan can be taxed at a rather high rate. As a Realtor, I've seen folks who got a tax bill for the $200K "forgiven" by the bank. Hellava thing.
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  5. #5
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    I was afraid of this. I don't see how it will ever come back to what it once was in my home town where she lives. She did buy in the height of the market and couldn't afford it. When I was selling my house, the realtors I talked to all said it would never be back here to what it once was. The unemployment rate is 20%.
    T12-L2; Burst fracture L1: Incomplete walking with AFO's and cane since 1989

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    I predict that what I have seen in my life time will continue, in that the war brides of this century need new homes, and so the property values will start to climb out of slump as the bank owned properties are bought up with va loans.

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    Quote Originally Posted by jody View Post
    I predict that what I have seen in my life time will continue, in that the war brides of this century need new homes, and so the property values will start to climb out of slump as the bank owned properties are bought up with va loans.
    I would make that prediction too if our government weren't so broke
    T12-L2; Burst fracture L1: Incomplete walking with AFO's and cane since 1989

    My goal in life is to be as good of a person my dog already thinks I am. ~Author Unknown

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    To our follicularly- and calorically- challenged father, did you get the 3.25 through the Making Home Affordable program, or some other way? Did your loan-to-value ratio matter?

    Daisy, has the rental market there tanked with home prices in the dirt? Anyone, would it make sense to buy something like that as an investment if you can swing it, or is the uncertainty in the market too long-term?

    How do you find the right kind of professionals to advise you on these things? I could've bought my house in 2000 for less than two thirds of what I paid for it in 2004.

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