CH7 question regarding 2nd Mortgage

[debtmonster]

I might be wrong in saying this, but that just seems to me like abusing the system...

It seems like banks only abused themselves by giving out loans that they shouldn't have.

I've been able to get many car loans with a high 600's credit score and $0 to $500 down. That should not be the case. These people should have all required thousands down.

I remember going to buy a Honda Civic once. They ran my credit and required $5,000 down. I bet you that the bank that required that is still doing great business from doing smart business practices. They were right by not approving us. I was mad for them turning me away then. Now I know they were right.

I am still wondering how people can afford a $300-400k home. My sister is a school teacher and bought a $260k home. She's following my footsteps. She's getting deeper and deeper into debt each and every month because she cannot afford the house on her small $42k salary.

At the time I bought my brand new home, we made about $40k/yr. at the time and my house was $120,000. 3 x $40k = $120k. The bank approved me at the right amount.

I don't know how people making my income are buying such expensive houses beyond this. They are all over Miami. Foreclosures are to the moon there. The bankruptcy courts are working overtime in Dade County.

[jessegirl]

Debtmonster - Ok, misunderstood you. You are right the houses are way out of line. But, maybe now what is going on the houses will come down to where they should be. The banks i should not approved all those high mortgages. I know someone that only makes 100K and purchased a 700K home. So now they are mortgage poor..

[debtmonster]

Really why??? Why is that abusing the system?? I cannot afford the payments. Did you file a BK? Why? Maybe you abused the system being you think like that? You do not know my situation at all, so by making a comment like that, is just totally out of line. Look, i am on here asking questions for help and then someone like you makes a wise a** comment like that, you shouldn't be on a forum with people who are looking for help.

Also, in request to my question, I am not judging jessegirl or anyone else by saying what they did is good or bad. I am simply asking, "How do you physically do it?"

In 2005 the bank would not qualify me for a $300k home. How are other people getting these homes on a similar income? How much money did you gross annually at the time of buying the home? I don't know if you posted where you live, but why are the homes so expensive there? This is why I moved out of South Florida. Around 2004 I remember seeing an ad int he paper saying the median price of a home was $260k. A year or so later is jumped to $400k. That's when I decided to leave the area altogether. I simply could not afford a house that was 6-8x my annual salary.

[jessegirl]

That comment is for NOWIMDOWNINIT, not you debtmonster. I am tired of people making assumptions about others on this forumn and not knowing there situation. Its just wrong...Who needs there wise A** comments, people are looking for answers to life crisis and you get these people that have no idea of someone financial situations and they make a stupid nonsense comment like that. Its wrong...

[NowImDownInIt]

Really why??? Why is that abusing the system?? I cannot afford the payments. Did you file a BK? Why? Maybe you abused the system being you think like that? You do not know my situation at all, so by making a comment like that, is just totally out of line. Look, i am on here asking questions for help and then someone like you makes a wise a** comment like that, you shouldn't be on a forum with people who are looking for help.

I was just stating my opinion.

[NowImDownInIt]

That comment is for NOWIMDOWNINIT, not you debtmonster. I am tired of people making assumptions about others on this forumn and not knowing there situation. Its just wrong...Who needs there wise A** comments, people are looking for answers to life crisis and you get these people that have no idea of someone financial situations and they make a stupid nonsense comment like that. Its wrong...

No need for the name-callings. It wasn't a stupid nonsense comment, it was my opinion. I just don't understand how that will fly in the post Oct. 2005 bankruptcy court. Also... IMHO (which means, in case you didn't know, that I am stating MY opinion) it's ridiculous to file a chapter 13 after filing a 7 for that purpose alone. If you are only being made to pay back 10% that's 513 a month over 36 months or a little over 300 a month over 60... Both are probably much lower than you were paying in minimum payments to the CC companies and you are still getting off paying $166,500 less than you owe. And that's just the credit card debt. Not to mention the 2nd mortgage being stripped. I just think it would be so much easier to only file the once and have it ALL discharged. You are right, I don't know your situation, but I can't see how what you are doing is better. AND filing just the Ch 13 would be less detrimental to your credit.

I am not trying to come off as judgemental, but I think that this is not the right way to go about this... and to ME it does look like abusing the system.

[debtmonster]

I still haven't gotten an answer to my question. How does one qualify for a $300-400k home without making a $150k/yr. income?

How is everyone doing this? They wouldn't let me do it when I went to get pre-approved How were you guys able to pull this off?

[jessegirl]

Your confusing this forum question with all your stuff. I already have my answer from HHM.

[NowImDownInIt]

I still haven't gotten an answer to my question. How does one qualify for a $300-400k home without making a $150k/yr. income?

How is everyone doing this? They wouldn't let me do it when I went to get pre-approved How were you guys able to pull this off?

That's a question I would like the answer to as well, but how about a separate topic?

[debtmonster]

That's answering my question with a question.

[NowImDownInIt]

That's answering my question with a question.

LOL.. I don't have an answer for you.. I gross 60k and am having a hard time getting approved for a apartment that rents for 700 a month. I wish I did...

[biotechsolution]

Jessegirl:

Please keep us posted on your progress because I just can't see how this would fly. If you were giving up the house then I could see it. Like HHM says if you're not affirming the loan then the 2nd because unsecured because you're walking away from the house and they will just take posession of the house since you've been relieved from obligation.

But..you're keeping the house. Plus at some point the dollar amount of the 2nd mortgage has to be discharged by the court, otherwise you're responsible for it.

Please keep up posted. My area of law is contracts not BK but after doing my business bk and other friends' business bks, I've never seen this tried post 2005 bk changes.

I wish you luck but I agree with bkparalegal.

Get an iron clad guarantee from your attorney because once you get your discharge in the 7 it severly limits your mortgage options.

[debtmonster]

LOL.. I don't have an answer for you.. I gross 60k and am having a hard time getting approved for a apartment that rents for 700 a month. I wish I did...

I'm in the same boat, but make less than you now. I haven't had a day job paying $60k or more since the Dot Com bust. If we left our house, we would not get approved for an apartment. I have 3 apartments that want money from me. I relocated for jobs or financial reasons and could not keep a job long enough to keep paying them. That's what amazed me about getting approved on our house. We can't rent an apartment, but they would approve us on a mortgage in 2005. Go figure.

If you're making $60k and paying $700/mo., that is very smart. That's what you should be doing instead of getting into a $2500-3500/mo. mortgage like many people have done.

I would love to do that right now. If I end up getting divorced, I will have to rent a room from somebody privately without a credit check. I would love for my rent to be 10% or less than my gross income!

[Dollar Bill]

debtmonster - During the housing boom many people who wanted to buy a home whether it be Miami, Los Angeles, Chicago, or any other desirable city with BIG home prices either could or couldn't afford them. At that time many mortgage companies such as the mom and pop small firms, to larger ones like Ameriquest were qualifying individuals for loans they could not afford. On CNN, I watched many people report on how they qualified for a mortgage with Ameriquest that they couldn't afford. They found out that Ameriquest loan officers would create paycheck stubs or even a mock tax return to get underwriting to approve them. I heard the smaller firms were the worst because they were all doing this. THAT IS HOW MANY WERE SLIPPED INTO MORTGAGES THEY COULDN'T AFFORD. They loved the house, and would make a call to a mortgage broker who would say "sure I can get you approved." That's all many people want to hear after being googly eyed over that lovely home they just toured.

It is easier for folks who make the money to qualify ofcourse.

Do you know about the more exotic mortgages? There are loans out there that have an interest only payment. That means you only pay the interest amount on the loan for a certain time period, say two years or five years etc. That means it is so much easier to purchase a home with a bigger price tag.

My house in Los Angeles cost $607,000. At the time I made over $170k a year plus other misc income from investment property etc etc. My wife brought a salary in as well. Now I am house poor, and only bring disabiloty from an temprary illness. Wife lost her job on 9/8.

I'm getting off track, I hope I answered your question.

[debtmonster]

Yes...

So basically many people simply lied or the people getting the loans done lied.

They should have done what they did to me and made everyone furnish 2 years of bank statements as proof.

I could never DREAM of making $170k. WOW!

We're in poverty mode hovering in the $50k range. I remember back in the 1990's when people said $50k was good. Nowadays it's like making $20k back then.

The dollar has no value.