Consequences of fooreclosure

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Maybe cawacko can answer this best. Went out to dinner last night with one of my good friends who's self employed. Super nice guy but absolutely irresponsible with money.
Anyways he tells me it looks like he will have to foreclose on his McMansion he bought before 2008. He never should have gotten the loan but that was then. I'm amazed he held out this long.
Just wondering what can he expect?
(Just noticed I spelled foreclosure wrong)
 
Basically the bank takes the home back and your credit is F'd. When I've rented my place out I've noticed a number of people applying who had had a home forclosed upon previously.
 
cawacko said:
Basically the bank takes the home back and your credit is F'd. When I've rented my place out I've noticed a number of people applying who had had a home forclosed upon previously.
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Do you rent to them?
I saw where not only your credit is fucked but what you owe the bank and is forgiven is considered taxable income. I'm thinking he might be better off declaring chapter 7 BK.
 
I condemn racists & Nazis said:
u didnt ax me but ur friend should talk 2 an attorney 4 that kind of advice

not some1 on a internet forum

http://www.experian.com/blogs/ask-experian/the-impact-of-foreclosure-on-your-credit-report/

https://www.debt.org/bankruptcy/
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Oh I know. I'm just curious and I figgered cawacko could give me some insight. Foreclosure or BK will not solve his problems anytime soon. I've seen this coming for yrs. He just can't help himself. Last yr. he bought some rare breed of dog for $3500. The inside of his house looks like a museum. His basement is a movie theater. Wife drives a BMW SUV. He drives a Lexus SUV.
He always paid for Hawaiian vacations for his entire staff. It goes on and on. It's some kind of sickness. And he's 55 yrs. old to boot.
 
aloysious said:
Oh I know. I'm just curious and I figgered cawacko could give me some insight. Foreclosure or BK will not solve his problems anytime soon. I've seen this coming for yrs. He just can't help himself. Last yr. he bought some rare breed of dog for $3500. The inside of his house looks like a museum. His basement is a movie theater. Wife drives a BMW SUV. He drives a Lexus SUV.
He always paid for Hawaiian vacations for his entire staff. It goes on and on. It's some kind of sickness.
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i think itz gonna b hard 2 convince a bk judge that he mertiz a discharge

just sayin

wherz he gonna live?
 
I condemn racists & Nazis said:
i think itz gonna b hard 2 convince a bk judge that he mertiz a discharge

just sayin
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He won't have a problem. He's behind on his income taxes, payroll taxes, house note.
I condemn racists & Nazis said:
wherz he gonna live?
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Good question. He's gonna have to rent. I'd rent something affordable now before he has to f/c or bk . Incredible waste on his part. Before he built his McMansion he was doing fine in a house he mortgaged probably for about $400,000, valued at $530,00 now.
 
aloysious said:
He won't have a problem. He's behind on his income taxes, payroll taxes, house note.
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u might wanna check that

if he haz a lotta hi $ assetz & haz been spending like u say a judge iz not gonna grant him relief from all hiz creditirz

and putting stuff in hiz wifez name aint gonna fool no buddy

http://jeannemariecella.com/bankruptcy-mistakes/


aloysious said:
Good question. He's gonna have to rent. I'd rent something affordable now before he has to f/c or bk . Incredible waste on his part. Before he built his McMansion he was doing fine in a house he mortgaged probably for about $400,000, valued at $530,00 now.
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wow hez in a tite spot but it soundz like he wont lissen anyway
 
aloysious said:
Maybe cawacko can answer this best. Went out to dinner last night with one of my good friends who's self employed. Super nice guy but absolutely irresponsible with money.
Anyways he tells me it looks like he will have to foreclose on his McMansion he bought before 2008. He never should have gotten the loan but that was then. I'm amazed he held out this long.
Just wondering what can he expect?
(Just noticed I spelled foreclosure wrong)
Click to expand...

A lot depends on in which state he lives in. Some states require judicial foreclosure, some do not. Some are one-action states; some are not. Basically if he is not in a judicial foreclosure state, they will start the process once he is 6 months delinquent (thanks to a change in federal law a couple years ago if he has a regular lender). He will get a letter accelerating his loan with the exact payoff. The rest is dictated by his deed of trust/mortgage or state law if there is not specified process in his mortgage. Generally the ads will run in the paper for however long is required there, they will have an auction. Nobody will buy it at the auction probably if he has a pre-2008 fat mortgage on an over-valued property. The trustee will convey it to the bank. The bank will begin the eviction process if he is not out by then, list it with a realtor, and it becomes an REO property. Depending on the bank, after awhile if nobody buys it after a few price drops, they may auction it off to the highest bidder and take the loss.
 
aloysious said:
Oh I know. I'm just curious and I figgered cawacko could give me some insight. Foreclosure or BK will not solve his problems anytime soon. I've seen this coming for yrs. He just can't help himself. Last yr. he bought some rare breed of dog for $3500. The inside of his house looks like a museum. His basement is a movie theater. Wife drives a BMW SUV. He drives a Lexus SUV.
He always paid for Hawaiian vacations for his entire staff. It goes on and on. It's some kind of sickness. And he's 55 yrs. old to boot.
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55 years old, good time to start your life over, almost from scratch w/ bad cred......... Well it's better than doing it @ 60 or 65 anyways.......

I agree sounds like he was living the dream & would not have listened. Now it's wake up time...
 
Nomad said:
Sounds like a materialistic douchebag.
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Yeah, I don't know what to think of him. Super nice fella, very conscientious and honest with his patients.
Sounds very knowledgeable when speaking, can't really get a word in. After it's over you think, "Somebody needs to slap some sense into him."
Me and others always come up with obsessive compulsive personality disorder.
 
aloysious said:
Yeah, I don't know what to think of him. Super nice fella, very conscientious and honest with his patients.
Sounds very knowledgeable when speaking, can't really get a word in. After it's over you think, "Somebody needs to slap some sense into him."
Me and others always come up with obsessive compulsive personality disorder.
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Some people are just hung up on having a lot of fancy stuff. The trappings of wealth.

I guess the more expensive stuff they acquire, the more successful they feel. I don't know.

The happiest people seem to be the ones who don't need or want a lot, even if they can easily afford it.
 
aloysious said:
Do you rent to them?
I saw where not only your credit is fucked but what you owe the bank and is forgiven is considered taxable income. I'm thinking he might be better off declaring chapter 7 BK.
Click to expand...

Yeah, I'd rent to them. The reality is they may have to put up either a larger deposit or pay a couple of months of rent up front. Of course the market they are in will dictate that. In a hot market an owner can choose who they like. In a regular to slower market an owner has no leverage and will accept who they can get
 
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