What's up with the Buy and Bail Strategies??
Do some here feel that it's legal? Unethical? Or, just a downright bad decision? I'd be interested to hear how lenders feel about this.
I know that there are hardships, transfers and variences granted, but does this fit into those categories?
In the last 2 months I've witnessed 2 buy and bail short sale strategies put into play. BTW, no relations, just an accquaintence and a person I just met. One, that I can give specifics on involves a middle aged couple just getting married and already mortgaging 2 separate residences with one spouse with teenagers about to leave the nest. So, they go out and buy another much, much larger home for all. Now, with 3 homes and only being able to afford 1, they are trying to short sale the 2 original homes.
In the other case, the individuals know better........they're in the real estate profession.
Excuse me but, I just don't get it!! What an I missing here? Don't they know this ends up costing others, especially if they have to foreclose or bankrupt?
Replies to This Discussion
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Permalink Reply by Lydia Terry on
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There are always people who will work the system. I knew alot of people who saw their same house across the street selling for less than they owed on their house, so they had their spouse buy it, and then they short sold their house.
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'You can't escape karma ... It is what it is. It doesn't judge, it's neither good nor bad like most people think. It's the result of all the actions, positive and negative--a constant balancing act of events--cause and effect--tit for tat--reaping and sowing--what goes around comes around ... However you phrase it, it's the same in the end.'
ALYSON NOËL, Shadowland
... and, now that I've started waxing philosophical (ha) I will also say that none of us are finished becoming our complete selves; when you cheat and pretend to yourself and others that you don't believe it's cheating, you are becoming the person you go into tomorrow as ... and then you have to be somebody you don't like.
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Permalink Reply by Richard on
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Lydia and Susan,
Thanks for coming into the discussion. And, I will say that's heavy and words of wisdom. As EWF would sing "That's the Way of the World". But I will also say, it very hard to escape the image in the mirror.
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Permalink Reply by Becky Martin on
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I have one going now that BOA has asked for a "new hardship letter" because "having children is not considered a hardship" - but these people have a real situation in my opinion - the couple had two incomes and then she had two children VERY close together, not planned - SO because of the child care cost of two infants she quit working to raise the children so their combined income was cut in half...now cannot afford the house - kinda sad that they bought at market high and now cannot sell for more than the mortgage, will end up losing the house and going to a rental....
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Permalink Reply by Thom Colby CA Brkr 888-391-5245 on
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Becky -
There will be many who will not care for my comments on this one - but I'm a fairly blunt and honest person.
I have to agree with BofA on this one. There is no such thing as an "UNPLANNED" child. In this economy, anyone who brings a child into this world without the financial foresight is quite frankly reckless. This is not a statement about pro-choice. In this country we are a civilized society and there are plenty of methods to avoid pregnancy in the first place - especially TWICE in a short timespan. If they had in their minds "unplanned" children, they really have their heads in the sand - DUH !
Is their overall situation sad, YES. Should BofA take the hit when a borrower is irresponsible - likely not.
Good luck,
Thom Colby
Broker
Newport Beach CA
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Permalink Reply by Tara Nagelhout on
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Having children isn't a hardship? Oh...oh, I could laugh over that for days. Bet they never actually HAD any children....
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Permalink Reply by Jaime Kosofsky on
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A run and dump is mortgage fraud plain and simple. I am tired hearing how the banks screwed everyone. The borrower signed a promissory note, a covenant to pay.. What gives anyone the right to breach their promise after they have had the opportunity to enjoy the benefits ofnthe money. The banks should start filing indictments against the strategic defaulters as well as the scam artists encouraging this practice. There are so many people who truly need help and are suffering a hardship that are facing economic ruin because the fraudsters have put a hurting on the banks and made getting virtually impossible.
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Permalink Reply by Jeff Payne on
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Richard, the buy and bail is an ethical issue, not sure it can be mortgage fraud or not. My question really is... How could this buyer qualify for the mortgage on the 3rd home? Seems to me that they CAN afford all three if they qualified for the mortgage on the 3rd one. If they walk from 1 and 2, they will have to be dealt with in the legal system. Breaching their agreement is not fraud. It does carry legal consequences but it is not fraudulent in my opinion. It is WRONG in my opinion but the word FRAUD gets thrown around today to easily. My guess is that if they can afford all 3 homes and walk away from 2 of them, the lender will catch this in court and attach a nice big judgement against them.
This type of thing makes it harder for honest people to get help! Have you tried to report them?
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Becky,Saying that having the children was the hardship is what the problem is. The real hardship is a reduction in income and that is where the focus should be.
Becky Martin said:I have one going now that BOA has asked for a "new hardship letter" because "having children is not considered a hardship" - but these people have a real situation in my opinion - the couple had two incomes and then she had two children VERY close together, not planned - SO because of the child care cost of two infants she quit working to raise the children so their combined income was cut in half...now cannot afford the house - kinda sad that they bought at market high and now cannot sell for more than the mortgage, will end up losing the house and going to a rental....
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Jeff,
I can agree. However, the rules should be tighter. I'm finding a lot more people just throw ethics into the trash. Lydia and Susan mentioned people working the system and the karma that results. I'm hoping both parties in these cases get a healthy dose of their own medicine.
There are real hardships that are an exception to the rules and these are the people I personally don't mind seeing benefit within the system. But to see these cases, are no different than seeing the people on welfare who are very cable, but rather not work. Yet, they have all the toys and supersize everything as if they were at McDonalds. They never rationalize the consequences it their own minds but, someone else pays for their decisions and taking advantage of the system.
It seems to me, we're paying for their bad choices. If that is the case, why not let these types of individuals sink or swim when they all of a sudden they find themselves in deep water. I'm tire of the bailouts!
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I agree, it will eventually catch up with them but to be honest, it is not my job to police them, we have enough to do already. For me, I won't bother with a short sale that does not have a hardship of some kind.
Trying to stay away from being too political, but our country is not in trouble just from strategic defaulters, that is just a drop in the bucket.
The rules are tight, if you don't pay, you don't stay.
Richard said:Jeff,
I can agree. However, the rules should be tighter. I'm finding a lot more people just throw ethics into the trash. Lydia and Susan mentioned people working the system and the karma that results. I'm hoping both parties in these cases get a healthy dose of their own medicine.
There are real hardships that are an exception to the rules and these are the people I personally don't mind seeing benefit within the system. But to see these cases, are no different than seeing the people on welfare who are very cable, but rather not work. Yet, they have all the toys and supersize everything as if they were at McDonalds. They never rationalize the consequences it their own minds but, someone else pays for their decisions and taking advantage of the system.
It seems to me, we're paying for their bad choices. If that is the case, why not let these types of individuals sink or swim when they all of a sudden they find themselves in deep water. I'm tire of the bailouts!
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Yes I agree Jeff, I have had them rewrite the hardship letter saying due to loss of income (wife quit work) and increased expenses (two babies!), always better to tell homeowners to use specific language and keep it simple!
Jeff Payne said:
Becky,Saying that having the children was the hardship is what the problem is. The real hardship is a reduction in income and that is where the focus should be.
Becky Martin said:I have one going now that BOA has asked for a "new hardship letter" because "having children is not considered a hardship" - but these people have a real situation in my opinion - the couple had two incomes and then she had two children VERY close together, not planned - SO because of the child care cost of two infants she quit working to raise the children so their combined income was cut in half...now cannot afford the house - kinda sad that they bought at market high and now cannot sell for more than the mortgage, will end up losing the house and going to a rental....
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