Will foreclosing affect wife's credit score?

But won't you feel all dirty inside?

"But won't you feel all dirty inside?"

No everyone is doing it.

if you still have an income to cover the mortgage, they will not renegotiate your loan, period.
Most lenders are garnishing wages and they would look at your HHI.
And yes, the gov't hands out bonuses to the wall streeters, but would throw people like you out the street.

"if you still have an income to cover the mortgage, they will not renegotiate your loan, period'

they might not renegotiate under the present program but they might do in the future as the defaults are increasing. however renegotiating or foreclosing is not so relevant as what matters is staying rent free for a while until housing clears.

I don't need moral sermons you give those to the gov/fed/banks. Nothing illegal here.

The question is: will that affect my wife's score? Thanks

"The question is: will that affect my wife's score? Thanks"

no idea, but it's a great question. to a stupid system, you are trying to give the rational response, kudos if it works for you.

I can't see how it would. There is no field in my credit score report for "spouse bankruptcy/judgment".

Also, loan forgiveness of any kind usually shows up as income/taxable gain on your income tax return. How would you get out of paying that unless you declare bankruptcy and isn't that very hard to do when your income is greater than your debt servicing payments.

Don't worry. Your wife fill dump you when she finds out how much of a loser you are.

You don't want a moral sermon? How about this:

I hope they bring back debtor's prisons and throw your ass in one of the first cells.

"Also, loan forgiveness of any kind usually shows up as income/taxable gain on your income tax return. How would you get out of paying that unless you declare bankruptcy and isn't that very hard to do when your income is greater than your debt servicing payments. "

people with FC issues on principal residence are not paying income taxes on loan forgiveness (not of 1st mtg, nor 2nd mtg, nor helocs...) thanks to our government (made an exception and is gonna keep on extending that "gift").

nyc_sport, fkloser and many others want to play the game. it's all in the game.

Little Dorrit.

http://www.gutenberg.org/etext/963

Fkloser: walk me through this scenario.

You make 50k, have no other debt than 100k mtge at reasonable mtge rate. Market goes down, you stop making payments, mtge becomes delinquent. You apply for loan forgiveness or whatever program is out there for delinquent loans. How would you stop the mortgagor from going after your paycheck? Or would you just take on huge credit card debt as well (say you do cash advances and deposit into wife's checking account) so that your total monthly payments are greater than your income?

I guess that would be the way to go. Take out a huge mtge, as large as you can get, pile on the HELOCs and CC debt (while transferring the cash to your wife) and then declaring bankruptcy to reduce payments.

But, I seem to remember some people in Harlem doing the same thing with townhouses in the 90s - borrowing over purchase price, huge HELOCs, transferring the cash out. All legal, no loan forgiveness required. I think a pile
were indicted for mortgage fraud - I don't know what statutes were used to prosecute. Also, if you need to switch jobs, your prospective employer might turn you down based on creditworthiness.

I'm all for thinking up schemes. Just be careful.

"I guess that would be the way to go. Take out a huge mtge, as large as you can get, pile on the HELOCs and CC debt (while transferring the cash to your wife) and then declaring bankruptcy to reduce payments."

make also sure that all mtgs you get into a non-recourse (guess for practical purposes ny qualifies) so you can walk away and not have the debt collectors come after you. as i see it, it would make sense if you believe that your job prospects are not very exciting down the road in the middle term (if you think you have a chance of getting a huge wage increase in a few years, why risk it?).

also you need to be hurt by housing, i mean, housing costs should be a pain in the neck to justify all this plotting and scheeming (rent more than 30% of income for ex). i'm 100% sure that there's a way to milk this system big time. question is... your wife here is the partner in business, you need her to agree on this 100%.

Oh, and marriage would need to be solid because NYS is an equitable distribution state w.r.t. marital property (even if 2nd prop. is in your wife's name, still considered marital property if acquired after marriage). So court might decide that you are not entitled to any part of the 2nd property.

Let's first go over the simpler method. How long will someone need to foreclose on me and what are the incentives. It is known that banks are withholding foreclosures. As I mentioned the objective in this case is to stay for as long as possible.

to any FC moratoriums loser, you have to add the normal time in the pipeline that varies per state. you are lucky in the sense that in NY it takes 450 days. in CT 45 (TX is the fastest i think). so... make sure you buy in NY, no NJ, no CT.

FYI. I know of an owner Who is basically asking the current renter a 'solid' bid as she is so underwater and is savvy enough to 'get' the bank would rather do a quick short sale rather than get foreclosed upon. Let's call this a strategic anicipatory abort sale.

Yeah, this little thing called moral hazard.

Okay, "simple" method:

1) You decide to stop paying.
2) Foreclosure proceedings set in motion.
3) You stay in your house rent free while foreclosure proceedings occur.
4) This is where it gets tricky. Assume that you want a reduction in principal. Are banks automatically
giving these out or are they looking at your employment situation, your other debts? When the mortgagor takes a look at your job situation, and sees that you can afford the original payment, will they give you the reduction in principal? And if not, aren't you running the risk that they don't, they institute garnishing of your wages for missed payments + penalties? Thereby costing you more money?

Say they are not giving reductions in principal, but moving (slowly) towards a short sale. Is everyone qualifying
for the loan forgiveness program where you don't pay tax on short sale? Or does the gov't look at your
tax returns to figure out that you have enough income to pay.

also consider that you should have the least skin the game possible. basically, you are buying a call option of appreciation. if it doesn't work, you walk away. hence, you should use FHA, "Current FHA loan limits are as high as $729,750 in high cost areas". so there's your buying limit.

I'm just not sure how it would work if your income is higher than your debt service payments. It seems to me that the only way that you could protect your paycheck would be to max out credit cards, get HELOCs, etc.

i think that even without using HELOCs and the like it might work. consider that many are gonna literally live rent free for a couple of years. if you save that housing cost, you end up winning big time. 3 to 5 years later you can buy again. it's a stupid system, but i guess that's how it's working now.

Can't see how it would work if you are getting a steady paycheck > mtge payment.

until states don't make mtgs recourse, you have the upper hand if the value of your property goes down say... $200k (of the $700k purchase that you financed through the FHA with only say now... 5% down: $35k). if walk aways become common, the gov will push principal cuts to what house prices are regardless of what your income is.

imho many could walk away when htey are underwater even $100k. htat's a drop of 15% (which could happen imho in the nyc area)

interesting scenario. How about this one? Let me know if it sounds familiar...

First, divorce your wife. Next, find someone who owns a building in harlem but lives in the Dominican Republic. You make fake papers pretending that you are a partial owner. Line up cash from investors who think they're getting a great deal. Skip town with the money before anyone catches on, but pick some island other than the DR. While making your getaway, sneak some money to your ex-wife which she passes off as gambling winnings if the IRS catches on. If not, then you meet up in a few years somewhere else. But definitely, do not return to Harlem or DR.

to gain extra karma credits, try to line up financing from some evil people.

He's talking about an FHA loan. Is the Gov. going to foreclose and go after wages? That won't look very good in the next campaign ads.

f**kinloser: Are you the guy that took the hooker wannabe to ACORN?

First, until foreclosure proceedings start or eviction comes you get to live for free. At this moment one can apply for adjustment even if one does not fulfill requirements thereby delaying it further. I believe the amount of time you get to stay rent free is significant. Especially now that 10% of mortgages are delinquent, banks withhold foreclosures, gov is trying to renegotiate loans, etc. How long will it take to evict you? Again I believe that they won't evict anyone soon as they are afraid of the backlash. Has anyone here done it? Would you think that it can be possible to stay for years kicking the can? We need personal experience.

Umm, isn't this one of those [many] fake threads, where the OP is basically full of it? I imagine fkloser is an alias.

"will a foreclosure affect my wife's score if she does not appear in docs? Does anyone know?"

I happen to know the answer, but I can't answer an alias-type thread seriously.

Who cares if I am an alias or not? We are all aliases...

It's a legitimate question. I would like to explore further this possibility seriously. It's good for all of us to know the limitations of this system and how we can take advantage of it as others have been doing all along. If you know something please share. Otherwise you make no sense.

"how we can take advantage of it as others have been doing all along"

agreed. it's cool that while popping up prices is damaging to the incoming, those having to put up with inflating prices at least have a way to get compensated by playing the game well.

On a semi serious note, how is this any different than allowing banks to 'convert' non performing assets into performing with a magic wand even if it is pik( ed) paid in kind - ie they are given more loans to pay back the old loans?

It's happening all over the f'n place. Seriously it's becoming comical when there is NO stigma or 'costs' associated with over- leveraging. It's almost like why didn't you overleverage yourself when you had a chance in 2001-2008?

Timmy have you sold your home yet?

"how is this any different than allowing banks to 'convert' non performing assets into performing with a magic wand"

it's not different at all. In fact systemic corruption is worse.

Can we devise a strategy that will allow us to live rent free for three-four years possibly longer? Does anyone know whether FHA will go after wages? Did it ever happen? 90% of mortgages are now issued by government backed insolvent entities. Will it affect wife's credit score?

She should leave you. You are an ass. Then her credit and her credibility will be whole.

"Does anyone know whether FHA will go after wages? "

of course not, but the IRS can. so if they don't extend the loan forgiveness exclusion (is not considered income for tax purposes temporarily) your wages are safe.

"It's happening all over the f'n place. Seriously it's becoming comical when there is NO stigma or 'costs' associated with over- leveraging. It's almost like why didn't you overleverage yourself when you had a chance in 2001-2008?"

no kidding. bragging taxpayers about the loan mod that's about to come will become the new bragging to renters about being a homeowner and the increasing value of the home...

I'm waiting for the New Yorker cartoon.

http://www.latimes.com/classified/realestate/news/la-fi-harney20-2009sep20,0,2560658.story

http://www.foreclosurefish.com/blog/index.php?id=349

http://www.fhfa.gov/webfiles/15051/wp09-10.pdf

http://bobstahl.topproducerblogs.com/?cat=473

Moral questions aside, it would be interesting to see if the bank could come after you for a def. judgment in NY.

Financial Incentives to Stem the Surge of Foreclosed Houses
by Danny Gibson on October 15, 2009

The unabated spread of foreclosed houses across the country is putting so much pressure on the Obama Administration that it eventually gave in by announcing financial incentives to both troubled borrowers and real estate lenders.

Industry experts have been calling on the Obama Administration to do something immediately to curb the tide of foreclosure properties across the country before it could derail housing recovery efforts.

Experts have been predicting that the number of foreclosed houses would reach two million in 2010 and would peak at 7.2 million in 2014.

Did Barney Frank put you up to this?