Community Chat

[JustineThayer]

On their mortgages.

I read the bankruptcy thread where everybody was ticked at many who filed just to write off credit card debt and irresponsible spending. How about short sales?

I am floored. I know somebody who bought a house ten years ago and within eight years owed MORE THEN triple the original purchase amount. Then when the market fell they bought a HUGE house and 'rented' out the first one. Well they couldn't rent it for full mortgage price so they supplemented it a bit. Then those renters left and they could only rent it for 1/2 of the amount. They (not married) applied for a payment reduction (not sure of legit name) and their payments were cut to 1/3 of the payment. They then applied for a Short Sale selling the house for the original purchase price and the bank waiving the rest.

I thought at least they would have to claim it on their taxes. NOPE - Mortgage Forgiveness Debt Act in 2007 eliminated that. It will hit their credit but it will only show that the debt was settled for less then the amount owed. Nothing as bas a foreclosure would be.

I feel for those that lost their jobs etc. but the ones that are taking advantage of the system that was made for those in true financial hardships due to job loss and/or medical issues etc. Not those that had to have that huge Mansion house so they basically walk away for free from the original house that was more in line with what they could afford. Plus they kept refinancing and refinancing the original mortgage until it was almost four times the amount the house was bought for to begin with.

I know this as they BRAG about it, they think it is great!