The Church advises walking away from your house if you're underwater

[YOhio]

Just to clarify, I do not believe it was Elder Cook that gave this counsel, but rather the Stake President. Elder Cook also spoke, but I'm not certain of his topic. I don't want to give the impression that any of this came directly from Salt Lake.

Then great job on the thread title!

[smokymountainrain]

Then great job on the thread title!

[falafel]

Then great job on the thread title!

I accept your hearty congratulations.

[kccougar]

Just to clarify, I do not believe it was Elder Cook that gave this counsel, but rather the Stake President. Elder Cook also spoke, but I'm not certain of his topic. I don't want to give the impression that any of this came directly from Salt Lake.

People hear what they want to hear. Too bad you weren't at the meeting to repor what was actually said.

[Jeff Lebowski]

Yikes. This is what happens when you let lawyers speak at church.

[mUUser]

So the congregation was treated to his opinion. Big whoop.

[byu71]

So the congregation was treated to his opinion. Big whoop.

It would be a big whoop to me if I held a second mortgage on some guy in the Stake and he came to me and told me his ecclesiastical leader just told him he should default on my mortgage.

[falafel]

People hear what they want to hear. Too bad you weren't at the meeting to repor what was actually said.

I'm glad that you agree that I hear what is said, as opposed to what I want to hear.

[falafel]

So the congregation was treated to his opinion. Big whoop.

Well, the same could be said about every Stake Conference talk then. There's a line (somewhere) between spiritual guidance from ecclesiastical leaders and opinion. Some people have a difficult time finding that line, making comments like these problematic.

[mUUser]

making comments like these problematic.

Extremely!!

I appearantly did a very poor job of reflecting my disgust in his counsel over the pulpit.

[jay santos]

I wonder if this what some people mean by wanting to hear more meat and less milk.

More faith, repentance, baptism please.

[falafel]

Extremely!!

I appearantly did a very poor job of reflecting my disgust in his counsel over the pulpit.

Ah. Yes, I thought that you were saying this was a non-issue.

[Drunk Tank]

Really it boils down to 2 questions...

Ethics vs. Reality

Fortunately we aren't in this situation, as we bought our house in 2001. The builder actually gave us money to be able to qualify.

But look at this scenario...

Let's say you buy a house for 300k in 2007. You have a 30 year loan and a payment right around 2k. You make good money.

3 years later...

Your house is now worth probably 160k. You still owe 296k. (Just grabbing numbers out of the backside folks.)

In 7 more years, you are still going to owe 20 years on the house. You will probably owe 220k at least still on the principle. If you are fortunate, the house may be work 170-180k. 10 years into it and you are still 50k in the hole.

The house may never be worth the purchase price. The house will never be worth the 500k you are going to pay with interest involved.

The bank wont work with you because you make good money. Regardless if you make good money, you are involved in a bad investment. Yes...you signed a contract, but people walk away from contracts all of the time.

What do you do?

I can respect someone that wants to stick it out. I really do.

I also don't begrudge the person for walking away. They weren't very smart in purchasing the house for 300k in the first place. But neither were the other 50 million people who are losing their houses. So this isn't an isolated event.

If you file for bankruptcy, and you let the bank take your house back, you have to ride out 7 years of bad credit. But after those 7 years you owe 0.00. The system rewards you for hitting the reset button.

I know multiple people in this exact situation. The Obama housing plan was an epic failure and hasn't helped a single person I know. I talk with my friends, and I tell them that if I was in their situation I would be walking. No questions asked and with no guilt. Just simply doing the math.

I am in this very situation. Bought our home in Nov. 07 for 290,000 with $30k down. We still owe 255,000 and my mortgage payment is $2045 which I can afford to pay. A house identical to mine is for sale at $150,000 right across the street, and my neighbors house is now a forclosure and is signifigantly less, even though it is a larger home.

I have had people tell me to walk away, and others tell me you havnt lost any money until you sell the house.

I could seriously rent twice the house with a pool, for the same price as my mortgage. But I choose to stay where I am.

Am I stupid for doing this? Possibly. It is very doubtful I could ever get out of this house, and it is definatly not the home of our dreams, but its the bed I made, so I'll lay in it.

[Moliere]

It would be a big whoop to me if I held a second mortgage on some guy in the Stake and he came to me and told me his ecclesiastical leader just told him he should default on my mortgage.

Well, if that happened then you would be the proud owner of his old house. Sure you would be out some money, but some of that would be your fault for allowing him to borrow 100% of the equity of his home. This is part of the reason why banks used to require at least a 20% downpayment, to make sure they cover their butts in case there is a default and the house has gone down in value.

Also, they guy would have just destroyed his credit. Sure 7 years later it will all be wiped clean, but good credit is a huge issue for certain things such as background checks for new jobs, getting a credit card, getting a cell phone, etc.

[beelzebabette]

Well, if that happened then you would be the proud owner of his old house. Sure you would be out some money, but some of that would be your fault for allowing him to borrow 100% of the equity of his home. This is part of the reason why banks used to require at least a 20% downpayment, to make sure they cover their butts in case there is a default and the house has gone down in value.

Reread. Return. Report.