Government sucks

[busyLivin]

Here's the story...


A friend of mine bought a house a couple years ago when he never should have been approved for a loan... He didn't even have a job. About a year and a half later, he has a seapage problem, and coudn't afford to fix it. He walks away and the house is either foreclosed or something like it... He said it wasnt foreclosed... I dont know how the bank handled it.

Now, a year later, he is approved for an fha loan and is moving into a nicer house with a big backyard.


I bought my condo about 3 years ago for 142. With the housing bubble bursting, the values have dramatically dropped. Another condo in my complex is up for sale at 100k. Assuming the they sell for 90, after realtor fees, etc.. Lets say they get 80k. That's a 60k difference I cant make up anytime soon.

I only wanted to live in my condo for 3-5 years and move up to a house. Obviously that plan is out the door.

So, my new options...do i stay in a place i dont want for 10+ years just to break even (basically throwing my money away), or do i walk away, get foreclosed or do a short sale, and have a newer cheaper house much sooner? ( there are literally dozens of nice houses around me for less than im paying now) I like to think of myself as an honest person, and i know walking away is the wrong thing to do... But how do i ignore this?

Thats my problem with the govt... The incentives are there for being dishonest, but nothing for sticking it out and paying my mortgage. im not saying i want to be rewarded for doing what i should be doing, but this country is fucked when even honest people are practically forced into dishonest positions.

 

[busyLivin]

The Way We Live Now - Walk Away From Your Mortgage! - NYTimes.com

 

[DOMS]

Consider this: if you were in a business deal that went south, would you throw good money after bad, or would you move onto another investment?

 

[KelJu]

im not saying i want to be rewarded for doing what i should be doing, but this country is fucked when even honest people are practically forced into dishonest positions.

There is no such thing as being forced into a dishonest position. Either you do what you believe is the right thing to do and pay the consequences, or you give into jealousy and admit that you did what you did because you didn't thing you were being treated fairly. You can't have both.

 

[busyLivin]

There is no such thing as being forced into a dishonest position. Either you do what you believe is the right thing to do and pay the consequences, or you give into jealousy and admit that you did what you did because you didn't thing you were being treated fairly. You can't have both.

Jealousy has nothing to do with it. And I was treated fairly...I took a loan based on the current conditions and value.

The frustration lies with the fact that I have pristine credit..never a missed or late payment on anything. The govt is creating a system where that doesn't matter... they're mandating loans to people with bad credit. The banks are even being reimbursed for failed loans. The only ones getting the short end are the people sticking it out.

I know it sounds like I'm just one more person holding my hand out for a govt freebee...and it is... and that's the problem...that's not me. I just feel like a fool for suffering for doing the right thing while slugs advance.

 

[Arnold]

you can always rent the condo and keep it until you can sell for a profit, maybe another 5 years.

 

[busyLivin]

you can always rent the condo and keep it until you can sell for a profit, maybe another 5 years.

The association only allows rental to family...but I could probably rent it to a "cousin". I may do that, just the idea of renting isn't something id be crazy about.

 

[Arnold]

The association only allows rental to family...but I could probably rent it to a "cousin". I may do that, just the idea of renting isn't something id be crazy about.

I wasn't either, we were in a similar situation, bought a brand new luxury condo, lived there about a year, had a new house built and figured we would just sell the condo. Unfortuantely they were (and still are) building new units so we could not sell it. We rented it out and are almost breaking even, I am hoping to put it up for sale next summer. After everything was said and done it really made the most sense to keep it as an investment until we can sell it for a profit.

 

[KelJu]

Jealousy has nothing to do with it. And I was treated fairly...I took a loan based on the current conditions and value.

The frustration lies with the fact that I have pristine credit..never a missed or late payment on anything. The govt is creating a system where that doesn't matter... they're mandating loans to people with bad credit. The banks are even being reimbursed for failed loans. The only ones getting the short end are the people sticking it out.

I know it sounds like I'm just one more person holding my hand out for a govt freebee...and it is... and that's the problem...that's not me. I just feel like a fool for suffering for doing the right thing while slugs advance.

Jealousy has everything to do with it. I'm not jumping on your ass here. Almost everyone feels the way you do, and for good reason. I am jealous that I have done nothing but work my ass off and make the right decisions financially, yet people who have worked far less than I and have made much worse decisions get bailouts and face no consequences for their actions.

It pissed me off so much that it was doing me real harm. I fucking hated people who could work, but took government assistance instead. I fucking hated people who bought nice shit on credit with no intention of paying it back. I fucking hated minority scholarships. I fucking hated kids who's parents didn't work like mine, so they went to school for almost free where I had to scrape by. I was well on my way to having a stroke before I hit 30.

It was jealousy. It was an entitlement attitude. I felt that being in the American society entitled me to some sort of fairness. Call it justice. I felt that if you broke the rules, you should face the consequences. Well, when you get rid of the consequences, only the people taught to do right will follow the rules, and they get fucked. These days, pride for honesty and honoring your obligations comes at a higher financial price than ever in this country's history.

So, you now have the option of taking two paths. You can do what is right, and honor all of your financial obligations Or, you can turn your back on your morals and join those you judge.

I am pretty close to the breaking point myself. If I had a viable option that would allow me to give Sallie Mae the finger, and dump my debt with only a dinged up credit, I would probably do it. I am too jaded at this point to care about doing the right thing.

If everyone else was honoring their commitments, I wouldn't think twice about paying back the money. I feel that I owe it, and I got an education out of it which I consider to be something of high value. So, it is obvious that my beliefs are being shaped by anger and jealousy. Your's are too, whether you admit it or not.

 

[bio-chem]

I agree with DOMS. treat this as a business decision. don't look at it ethically. the original bank probably sold your mortgage a long time ago. you don't owe them any loyalty and they haven't given you any. if you can get yourself into the place you want without risk to you or your credit do it now.

 

[KelJu]

I agree with DOMS. treat this as a business decision. don't look at it ethically. the original bank probably sold your mortgage a long time ago. you don't owe them any loyalty and they haven't given you any. if you can get yourself into the place you want without risk to you or your credit do it now.

I concur. Do it.

 

[Doublebase]

Another way to look at it is that if you sell your current place, you will take a 50k hit, but the house you are moving into is also probably 50k or more less then what it was when you first bought your condo. And in the mean time you were writing off interest every year so it's not as bad as you think it is. Just try to stay positive. Your friends situation probably isn't as cut and dry as you state it to be. Foreclosing on a home kills your credit. I would never want to do that. I work hard and pay my bills. Maybe I'm a sucker but it's the way I was brought up. I take pride in everything I own.

 

[lnvanry]

BusyLiving,

Just b/c you friend was approved for an FHA loan doesn't mean he actually got it....or got it at a reasonable fixed rate.

FHA can still suck (PMI payments to start) and who is to say that he isn't going to end up right where he was before. The bank that gave him a loan is rolling dice assuming he was actually irresponsible or high risk like you had stated in the OP. but who know...did his situation change? new job? cosigneer with deep pockets?