Haim, I was reading in this weekend's Washington Post Real Estate Section, there is a column to ask advice, and one couple said, we took out one of those 125% loans, and borrowed more than the equity, and now the husband has been transferred, and the company doesn't pay moving costs, so if they sell their house at fair market value they will still owe the lender $40,000, which they don't have, what should they do? Even if they rent the house out, they will have a shortfall of $400 a month.
And the advice was, call the lender, and tell them you can't pay, and say if you can't make a deal, you will walk away from the loan. Which, IMO, is moronic, because if the house goes to foreclosure, they will still owe the deficiency, and the lender can put a lien on anything they own now, or in the future. But, this is the quality of advice we see these days.
It's all "easy money" until it has to be paid back. |
