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Under The Bus…, Other/Just Looking in 80202

A NEW OPPORTUNITY FOR REAL ESTATE AGENTS!!! YAY!!!

Asked by Under The Bus Capital Investments, 80202 Fri Jun 13, 2008

Help people avoid the bus!:

Some Buy a New Home to Bail on the Old

http://online.wsj.com/article/SB121314811278463077.html?mod=…

By NICK TIMIRAOS

Next month, Michelle Augustine plans to walk away from her four-bedroom house in a Sacramento, Calif., subdivision and let the property fall into foreclosure. But before doing so, she hopes to lock in the purchase of another home nearby.

"I can find the same exact house as what I live in right now for half the price," says Ms. Augustine, 44 years old, who runs a child-care service out of her home. She says she soon will be unable to afford her monthly payments, which will jump to $4,000 from $3,300 in August, and she doesn't want to continue to own a home that is now worth $200,000 less than what she paid for it two years ago.

...Lenders and brokers are discovering a new phenomenon: the "buy and bail," in which borrowers with good credit buy a new home, often at a much lower price, then bail out of the...old house.

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3
I have heard that lenders are catching on to this. They know what is going on in the market. They also know that people are doing this. I know of a few borrowers that this backfired on. I don't think it is ethical for a mortgage person to do this anyway. On the loan application you still have to deal with the home on the 1003.
Web Reference: http://GetPrequalified.com
0 votes Thank Flag Link Fri Jun 13, 2008
Good article but I wanted to point out a few things. California is a non-recourse state but only on the purchase money loan. any refi and its recourse all the way. Second lenders can verify the rental amount, so if I declare that the rent will cover 75% of the payment and I'm lying then it is clearly fraud and these people should be prosecuted not written up.
0 votes Thank Flag Link Fri Jun 13, 2008
Jed Lane, Real Estate Pro in San Francisco, CA
MVP'08
Contact
Greetings,
Thanks for the posting....Great Article.

A common sense approach to mortgage modifications, actually selling some of the short sale requests and all things not = GREED could shed some light at the end of the tunnel. But for now, survival of the fittest.

The article Reads to me like the visual of watching a dog chase his tail.
0 votes Thank Flag Link Fri Jun 13, 2008
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