![bostonbubble.com Forum Index](templates/subSilver/images/logo_phpBB.gif) |
bostonbubble.com Boston Bubble - Boston Real Estate Analysis
|
SPONSORED LINKS
Advertise on Boston Bubble
Buyer brokers and motivated
sellers, reach potential buyers.
www.bostonbubble.com
YOUR AD HERE
|
|
DISCLAIMER: The information provided on this website and in the
associated forums comes with ABSOLUTELY NO WARRANTY, expressed
or implied. You assume all risk for your own use of the information
provided as the accuracy of the information is in no way guaranteed.
As always, cross check information that you would deem useful against
multiple, reliable, independent resources. The opinions expressed
belong to the individual authors and not necessarily to other parties.
|
View previous topic :: View next topic |
Author |
Message |
victorgbishop
Joined: 03 Oct 2016 Posts: 25
|
Posted: Thu Jan 19, 2017 2:29 pm GMT Post subject: Not paying mortgage...to force a bank's hand |
|
|
Just a quick question because I'm a novice here. Has anyone heard of anyone doing this?
I've heard of new home owners getting a pre-approval for an amount just out of their range (ie can usually afford 500k but can get a mortgage broker to finagle a 660k loan). Getting into the home (making sure all large purchases such as a car, etc*) and make a few payments, then stop paying the mortgage. Submitting a hardship letter to the lender stating the payments are too much money, and forcing the lender to re-negotiate the terms of the loan.
* holding off purchasing/leasing a car until after house closing - but before halting your mortgage payments.
Now the homeowners credit would be destroyed, but they'd be in the house and have a new(er) car. I would NEVER try this but is this common in this housing market??? |
|
Back to top |
|
![](templates/subSilver/images/spacer.gif) |
Guest
|
Posted: Thu Jan 19, 2017 2:46 pm GMT Post subject: Re: Not paying mortgage...to force a bank's hand |
|
|
victorgbishop wrote: | Just a quick question because I'm a novice here. Has anyone heard of anyone doing this?
I've heard of new home owners getting a pre-approval for an amount just out of their range (ie can usually afford 500k but can get a mortgage broker to finagle a 660k loan). Getting into the home (making sure all large purchases such as a car, etc*) and make a few payments, then stop paying the mortgage. Submitting a hardship letter to the lender stating the payments are too much money, and forcing the lender to re-negotiate the terms of the loan.
* holding off purchasing/leasing a car until after house closing - but before halting your mortgage payments.
Now the homeowners credit would be destroyed, but they'd be in the house and have a new(er) car. I would NEVER try this but is this common in this housing market??? |
It varies depending on current housing market and down-payment. For example, if u put 0 or little then you will just loose that + credit. If the house has appreciated then the bank will kick out the owner and sell the house to recoup the loss.
This is a reason why 20% is now norm. These 3% down loans are backed by the government and some insurance so the bank gets compensation if the owner walks away.
What u describe was very common in 2000's hence the reason for high lending standards now |
|
Back to top |
|
![](templates/subSilver/images/spacer.gif) |
victorgbishop
Joined: 03 Oct 2016 Posts: 25
|
Posted: Thu Jan 19, 2017 2:53 pm GMT Post subject: Re: Not paying mortgage...to force a bank's hand |
|
|
Anonymous wrote: | victorgbishop wrote: | Just a quick question because I'm a novice here. Has anyone heard of anyone doing this?
I've heard of new home owners getting a pre-approval for an amount just out of their range (ie can usually afford 500k but can get a mortgage broker to finagle a 660k loan). Getting into the home (making sure all large purchases such as a car, etc*) and make a few payments, then stop paying the mortgage. Submitting a hardship letter to the lender stating the payments are too much money, and forcing the lender to re-negotiate the terms of the loan.
* holding off purchasing/leasing a car until after house closing - but before halting your mortgage payments.
Now the homeowners credit would be destroyed, but they'd be in the house and have a new(er) car. I would NEVER try this but is this common in this housing market??? |
It varies depending on current housing market and down-payment. For example, if u put 0 or little then you will just loose that + credit. If the house has appreciated then the bank will kick out the owner and sell the house to recoup the loss.
This is a reason why 20% is now norm. These 3% down loans are backed by the government and some insurance so the bank gets compensation if the owner walks away.
What u describe was very common in 2000's hence the reason for high lending standards now |
I also meant to add that the homeowner STAYS in the house with hopes of renegotiating terms of the loan. The situation that I'm referring to has the individual putting down 8-10% and then 'claiming' hardship. |
|
Back to top |
|
![](templates/subSilver/images/spacer.gif) |
Guest Guest
|
Posted: Fri Jan 20, 2017 12:14 am GMT Post subject: Re: Not paying mortgage...to force a bank's hand |
|
|
victorgbishop wrote: | Just a quick question because I'm a novice here. Has anyone heard of anyone doing this?
I've heard of new home owners getting a pre-approval for an amount just out of their range (ie can usually afford 500k but can get a mortgage broker to finagle a 660k loan). Getting into the home (making sure all large purchases such as a car, etc*) and make a few payments, then stop paying the mortgage. Submitting a hardship letter to the lender stating the payments are too much money, and forcing the lender to re-negotiate the terms of the loan.
* holding off purchasing/leasing a car until after house closing - but before halting your mortgage payments.
Now the homeowners credit would be destroyed, but they'd be in the house and have a new(er) car. I would NEVER try this but is this common in this housing market??? |
Go try it. What do you have to lose? Worse case scenario, you get to live rent free for a few years if the bank says no and you fight them in court. |
|
Back to top |
|
![](templates/subSilver/images/spacer.gif) |
Guest Guest
|
Posted: Fri Jan 20, 2017 2:31 am GMT Post subject: |
|
|
Right now it's still a seller's market. I highly doubt it would work. |
|
Back to top |
|
![](templates/subSilver/images/spacer.gif) |
Guest
|
Posted: Fri Jan 20, 2017 3:33 am GMT Post subject: |
|
|
Quote: | I also meant to add that the homeowner STAYS in the house with hopes of renegotiating terms of the loan. The situation that I'm referring to has the individual putting down 8-10% and then 'claiming' hardship. |
If the home price was $500,000, 8% is 40,000. That person is willing to risk 40,000 of his own money, also willing to potentially destroy his or her own credit record? The risk is too high compare to the potential gain. You can figure out from here. |
|
Back to top |
|
![](templates/subSilver/images/spacer.gif) |
guest Guest
|
Posted: Fri Jan 20, 2017 1:00 pm GMT Post subject: |
|
|
Anonymous wrote: | Quote: | I also meant to add that the homeowner STAYS in the house with hopes of renegotiating terms of the loan. The situation that I'm referring to has the individual putting down 8-10% and then 'claiming' hardship. |
If the home price was $500,000, 8% is 40,000. That person is willing to risk 40,000 of his own money, also willing to potentially destroy his or her own credit record? The risk is too high compare to the potential gain. You can figure out from here. |
If you are going to scam the system and destroy your credit, why not get 200k in credit cards, max them out and file for bankruptcy? You can repeat the process every 7 years. |
|
Back to top |
|
![](templates/subSilver/images/spacer.gif) |
Guest Guest
|
Posted: Fri Jan 20, 2017 4:54 pm GMT Post subject: |
|
|
If a judge saw you do this, they wouldn't grant you chapter 7 (no wage garnishment). If they did, you would either be foreclosed, or at least have a lien on your property. |
|
Back to top |
|
![](templates/subSilver/images/spacer.gif) |
DannyPrince
Joined: 11 Jan 2023 Posts: 1
|
Posted: Thu Nov 09, 2023 1:33 am GMT Post subject: |
|
|
While the idea you mentioned might have crossed the minds of a few, it's not a widely accepted or recommended practice in the housing market. Deliberately not paying your mortgage is a risky move that can lead to significant negative consequences. |
|
Back to top |
|
![](templates/subSilver/images/spacer.gif) |
|
|
You can post new topics in this forum You can reply to topics in this forum You cannot edit your posts in this forum You cannot delete your posts in this forum You cannot vote in polls in this forum
|
Forum posts are owned by the original posters.
Forum boards are Copyright 2005 - present, bostonbubble.com.
Privacy policy in effect.
Powered by phpBB © 2001, 2005 phpBB Group
|