[turtle777]

Originally Posted by Cold Warrior 

What about writing it off on your taxes? If it's a second home, can you treat it as an investment property? (If investment property losses can be written off?)

Can only be written off against gains from other investment.
Passive losses against passive income. So it all depends where Cody's money comes from.

-t

[turtle777]

So, Cody, that's some sh!tty situation you're in. I feel sorry for you.

Since you got a lot of advice from family and friends, I would get a second opinion from a disinterested third party (lawyer etc). If they hint in the same direction, then go for it.

You were screwed, but unfortunately, you can' really go after them. You need to do what's necessary to regain sanity for yourself and your family.

-t

[♥]

turtle, you're great and I appreciate that post.

I'll be okay. I like the house. I hate the problems.

We'll see what happens. I need to move where there is s p a c e.

[OreoCookie]

I would wait with my advice until you give us real alternatives.
If I were you, I'd think through all the examples. There is no point in deciding to foreclose your home if you this gets you into more trouble than worth it.
(0) How much money in mortgage payments can you really afford each month? Use conservative estimates.
(i) What kind of homes could you afford to buy with that?
(ii) What area would that be (good place for children to live in)?
(iii) Is a move financially sensible?
(iv) What other things can you save money on?
(E. g. an expensive car you don't need, costs of fuel, etc.) Don't save money on your health, though! If you're sick, you can't work.

Lawsuits are pointless if you know that there is no money to get anyway. Plus, lawsuits may take a long time and a lot of effort. And (obviously) a good lawyer.

[Mrjinglesusa]

Originally Posted by ♥ 

Actually, the advice to walk away is coming threefold:

1. Very smart Jewish uncle CPA
2. Very smart lawyer whose specialty is bankruptcy and real estate litigation/foreclosure
3. Very smart mortgage broker (40 years working with the very smart Jewish uncle)

They are the ones suggesting that I roll out of the house and get out now.

If you have received advice from three "very smart" people, all of whom seem to be in a position to best advise you (CPA, lawyer specializing in real estate foreclosure, and a mortgage broker), why are you asking a bunch of random people on a Mac forum what you should do?

I don't see how you are going to get better advice here than from those three people you mentioned. I mean, hell, one's Jewish! <---not really sure how that is relevant but whatever

[turtle777]

Originally Posted by Mrjinglesusa 

If you have received advice from three "very smart" people, all of whom seem to be in a position to best advise you (CPA, lawyer specializing in real estate foreclosure, and a mortgage broker), why are you asking a bunch of random people on a Mac forum what you should do?

Why not ?

There are lawyers, CPAs and real estate pros here in the forums.
And secondly, nothing is more valuable than a second opinion from an uninvolved third party.

Yes, you sometimes have to dig for the nuggets here, and you'll see a lot of crap posted, but it can be worth it.

-t

[Mrjinglesusa]

Originally Posted by turtle777 

Why not ?

There are lawyers, CPAs and real estate pros here in the forums.
And secondly, nothing is more valuable than a second opinion from an uninvolved third party.

Yes, you sometimes have to dig for the nuggets here, and you'll see a lot of crap posted, but it can be worth it.

-t

True.

However, my point is that if I already received advice from a CPA, mortgage broker, and a lawyer specializing in foreclosure, I wouldn't take advice from people here over them.

To each his own though.

[MacosNerd]

Originally Posted by Mrjinglesusa 

However, my point is that if I already received advice from a CPA, mortgage broker, and a lawyer specializing in foreclosure, I wouldn't take advice from people here over them.

Agreed

[design219]

This is a great lesson for potential home buyers/builders.

My wife and I debated heavily about whether to try to self contract or hire a builder to build our house. We decided to self contract, and although it was a hair pulling experience many, many times, I know every single thing in the house is correctly built. After two years of living in the house, it is still performing perfectly.

For us, building a house was a serious financial plunge, and we took the time to learn about what we were doing before we started. That made a tremendous difference. We also invested in an architect, and that money was well worth every penny.

[peeb]

Originally Posted by Mrjinglesusa 

However, my point is that if I already received advice from a CPA, mortgage broker, and a lawyer specializing in foreclosure, I wouldn't take advice from people here over them.

Isn't this one of those self contradictory statements like "Everything I say is a lie, including this statement"? You are advising him not to take your advice. If he doesn't, then he is.

[peeb]

Originally Posted by design219 

This is a great lesson for potential home buyers/builders.

My wife and I debated heavily about whether to try to self contract or hire a builder to build our house. We decided to self contract, and although it was a hair pulling experience many, many times, I know every single thing in the house is correctly built. After two years of living in the house, it is still performing perfectly.

For us, building a house was a serious financial plunge, and we took the time to learn about what we were doing before we started. That made a tremendous difference. We also invested in an architect, and that money was well worth every penny.

Sounds like fun - I've wrestled with pretty massive remodel projects and always thought building a house would be cool, but haven't taken the plunge. Agree on the value of architects though!

[design219]

Originally Posted by peeb 

Sounds like fun

In spite of the headaches, it was fun. I learned how to do a lot of things and amassed a nice collection of good tools as well (we did the floors, trim, etc. ourselves).

[Eug]

Originally Posted by design219 

This is a great lesson for potential home buyers/builders.

My wife and I debated heavily about whether to try to self contract or hire a builder to build our house. We decided to self contract, and although it was a hair pulling experience many, many times, I know every single thing in the house is correctly built. After two years of living in the house, it is still performing perfectly.

For us, building a house was a serious financial plunge, and we took the time to learn about what we were doing before we started. That made a tremendous difference. We also invested in an architect, and that money was well worth every penny.

I know others who went with builders who did everything.

One ran out of money before they started the build. He got his deposit back... 2 years later, without interest.

The other got a great build... for lots of money. The notable point though was one family member was always around to police things as they were going in.

I personally just bought a lived in but recent house, cuz I didn't want to deal with the build process. I went through that with my townhouse condo, and it was a big enough pain as it is, and a much bigger detached home would be several times worse. (I've got some of my own headaches of course with the house, but nothing earth shattering.)

[Timo]

Originally Posted by design219 

This is a great lesson for potential home buyers/builders.

[snip]
we took the time to learn about what we were doing before we started. That made a tremendous difference.

Yes. Buildings are not like retail or consumer goods.

Originally Posted by design219 

We also invested in an architect, and that money was well worth every penny.

though I'm obviously biased, I think this is great advice. Architects bring value to the building process in two distinct ways: first, they interpret needs and design for a specific audience (the client) rather than a general "buyer", as a builder typically does. Second, they safeguard during construction the ideas and designs arrive at with the client -- they make sure that things are built to your specifications, and not however the builder is used to doing it.

[Big Mac]

♥, you seem like a nice person, but you don't appear to be among the more rational portion of the population, and I don't think you should be making weighty financial decisions if you think voluntary foreclosure is a great option.

[finboy]

Originally Posted by peeb 

Really? As bad as this is, why is "responsibility" in scare quotes? You don't think people have a responsibility to pay back money they borrow?

Absolutely they do. But that's also why we have credit scores and all the other certifications that accompany one's credit history. Those are the consequences, and there shouldn't be a stigma attached to not paying ones debts. Just consequences.

[Chuckit]

Originally Posted by finboy 

Absolutely they do. But that's also why we have credit scores and all the other certifications that accompany one's credit history. Those are the consequences, and there shouldn't be a stigma attached to not paying ones debts. Just consequences.

A stigma is a consequence, isn't it?

[turtle777]

Originally Posted by Chuckit 

A stigma is a consequence, isn't it?

I don't get the difference either.

-t

[finboy]

Originally Posted by turtle777 

I don't get the difference either.

-t

Sure. Sorry I got caught up and couldn't express it clearly.

There shouldn't be some vague "responsibility" attached to it -- if you walk away, you pay the cost (in this case, your borrowing ability). It's not "good" or "bad" but it limits your ability to borrow in the future.

[peeb]

Well, I hate to sound like a moral absolutist, but I think that not paying your debts is 'bad', don't you?

[Mrjinglesusa]

Originally Posted by finboy 

Sure. Sorry I got caught up and couldn't express it clearly.

There shouldn't be some vague "responsibility" attached to it -- if you walk away, you pay the cost (in this case, your borrowing ability). It's not "good" or "bad" but it limits your ability to borrow in the future.

Umm, not paying your debts is bad. Period.

"Bad" means, among other things unfavorable, injurious in effect, detrimental, etc.

So, not paying your debts is unfavorable, injurious in effect, and detrimental because...

...you signed a contract to pay someone back and you chose not to (i.e., injurious in effect to the person you owe);

...it negatively affects your credit (i.e., unfavorable and detrimental to your credit);

...it negatively affects your future borrowing power (i.e., unfavorable and detrimental to your future borrowing power).

[Chuckit]

Originally Posted by finboy 

There shouldn't be some vague "responsibility" attached to it -- if you walk away, you pay the cost (in this case, your borrowing ability). It's not "good" or "bad" but it limits your ability to borrow in the future.

You're basically saying, "Let's ignore morality. From that perspective, there is no moral angle to this." It's a truism. It's "bad" in the sense that it shows lack of responsibility to those for whom you have made promises (this is essentially what a bad credit score reflects) and it's taking something from the lender without paying, which causes him injury. The "stigma" attached is that you'll be considered a person who does these things.

[analogika]

Originally Posted by peeb 

Well, I hate to sound like a moral absolutist, but I think that not paying your debts is 'bad', don't you?

Just like anything criminal or immoral, it's only "bad" if you can't afford to get away with it.


Right?

[Big Mac]

Originally Posted by analogika 

Just like anything criminal or immoral, it's only "bad" if you can't afford to get away with it.


Right?

Next time use a or something to indicate that your message should be taken as a joke.

[peeb]

I'm not sure it was intended as a joke.

[Jawbone54]

So basically the general response of this thread seems to be "DON'T LET YOUR HOUSE FORECLOSE."

[Dakar the Fourth]

Particularly if you're well off enough to suffer the blow.

[analogika]

Originally Posted by Big Mac 

Next time use a or something to indicate that your message should be taken as a joke.

I figured the "Right?" might be a tip-off.

Not entirely sure if sarcasm qualifies as a "joke" - I apologize for the confusion.

Sincerely, etc.

""

[torsoboy]

+1 for the advice to NOT let the house foreclose. Take a loss on it if you have the money anyway (which you seem to be indicating that you do). It is very irresponsible to foreclose on a house that you don't have too.

Basically you are saying "My builder robbed me (or tricked me), so that means that I am free to rob the bank that I got the money from to pay the builder." Two wrongs don't make a right. The bank did nothing wrong, and you want to punish them for something someone else did to you.

Seems like you should try talking with some people that are a different kind of "smart" than you mentioned.

[analogika]

You didn't use a "" - OMG I CANT TELL YOUR JOKING OR NOT!

[sek929]

I'd advise most people NOT to get homes built in developments. For those contractors the bottom line is all they care about. When they are slapping together 400 homes how much effort do you think went into yours?

Do like design did, hire your contractor (preferably by referral) and get an Architect involved. Doing some of the work yourself is a good idea too. Some things need a professionals touch but much of the stuff is done by unskilled laborers anyways.

[peeb]

Originally Posted by sek929 

I'd advise most people NOT to get homes built in developments. For those contractors the bottom line is all they care about. When they are slapping together 400 homes how much effort do you think went into yours?

I agree - one issue with designing and building yourself is that you can build a house for the long term - insulating and passive heating / cooling etc, rather than the cheapest $/sq ft ratio. You save money on the long term, which the builder doesn't care about in a development.

[sek929]

Exactly, my father built his own house with 2x8 outside walls and extra insulation. I see people with apts. spend more on heating.

It comes down to 2 things:

1. How much money extra are you willing to spend to save money down the road
which ties into
2. How long do you plan to live in this home? If it's a long time then spend extra money and get a quality house.

[sek929]

Our company has been out-bid by a lot of jokers over the years.

Of course we've had million dollar jobs done by the hour, see if those low-bidders can say the same.

[Timo]

Originally Posted by sek929 

I'd advise most people NOT to get homes built in developments. For those contractors the bottom line is all they care about. When they are slapping together 400 homes how much effort do you think went into yours?

Do like design did, hire your contractor (preferably by referral) and get an Architect involved. Doing some of the work yourself is a good idea too. Some things need a professionals touch but much of the stuff is done by unskilled laborers anyways.

THis is solid advice. Anybody listening?

[ghporter]

We paid more for our place because we researched the builder, actually watched their houses going up, MET THE CONSTRUCTION SUPERVISOR, and were pretty certain that they were going to do it right. But still I stopped by EVERY DAY during construction and took at least one picture of the place. The subcontractors and their workers knew I was paying attention, and that I'd be in contact with the construction supervisor if I saw something I didn't like. And I was. So our house is solid, the walls are about as straight as anyone makes 'em, flat spaces are level, verticals are plumb, and everything works. That's how you manage to get a great house in a development-it takes work, but it's worthwhile.

[Railroader]

I can't believe anyone who is financially able to pay their mortgage is considering purposefully foreclosing. Talk about moral decay and not honoring your commitments!

I work with a family that has dedicated to paying their mortgage in a house they aren't living in, even though after paying for utilities and mortgage their take home pay is about $100/month. Luckily their basic living expenses are covered by the organization (food, housing, health care), but they still need clothing and entertainment money. Some very generous people have been donating and taking them out.

[design219]

Originally Posted by peeb 

one issue with designing and building yourself is that you can build a house for the long term - insulating and passive heating / cooling etc, rather than the cheapest $/sq ft ratio. You save money on the long term, which the builder doesn't care about in a development.

Exactly. No builder would have built our house. Our house is passive solar, environmentally friendly and of the highest quality construction. There was no profit to any builder, but I'm getting a great return on investment with my miniscule heating and cooling costs.

[torsoboy]

Originally Posted by Railroader 

I can't believe anyone who is financially able to pay their mortgage is considering purposefully foreclosing. Talk about moral decay and not honoring your commitments!

My thoughts exactly.

[♥]

There are lawyers, CPAs and real estate pros here in the forums.
And secondly, nothing is more valuable than a second opinion from an uninvolved third party.

Great point and that's why I posted.

Anyway, as far as my "not honoring a commitment," I had a "commitment" with the builder to be honest and DISCLOSE that this house was previously razed and then was rebuilt, don't you think?

I mean, I actually have legal grounds where that alone is concerned.

Here is the "real deal": I would sell the house - even at a loss - if I could.

The problem is that I cannot, morally and ethically, sell this house to someone else knowing that the house is probably going to shift and crack further.

So, knowing that, why should I take feel badly about the fact that the loan - a loan provided because of a relationship with the builder - is defaulted on, especially when they have $100K of my money?

[Railroader]

Originally Posted by ♥ 

Great point and that's why I posted.

Anyway, as far as my "not honoring a commitment," I had a "commitment" with the builder to be honest and DISCLOSE that this house was previously razed and then was rebuilt, don't you think?

So, because a builder has done a poor job, you think it's right to not honor your commitment with the bank?

Originally Posted by ♥ 

I mean, I actually have legal grounds where that alone is concerned.

So, pursue those legal grounds. Don't not honor your agreement to pay for something you agreed to pay for that you are financially able to pay for.

Originally Posted by ♥ 

Here is the "real deal": I would sell the house - even at a loss - if I could.

The problem is that I cannot, morally and ethically, sell this house to someone else knowing that the house is probably going to shift and crack further.

I hope you do the morally correct (and legal) thing and put the issue on the real estate disclosure statement.

Originally Posted by ♥ 

So, knowing that, why should I take feel badly about the fact that the loan - a loan provided because of a relationship with the builder - is defaulted on, especially when they have $100K of my money?

I don't care how you feel. You should honor your end of a legally binding agreement. You are financially able to pay the loan, pay it. To use the statement that has been thrown around here lately, "man up". Don't be a morally degenerate loser.

[brassplayersrock²]

good use of the statement

[Face Ache]

Originally Posted by Railroader 

Don't be a morally degenerate loser.

Hey don't bunch her in with us moral degenerates. I pay my bills.

Cody (♥) is trying to convince herself of the validity of her decision. Considering someone talked her into buying a dodgy house in a swamp* in hurricane-land, using credit, that shouldn't be hard to do.




*Okay I won't make a Shrek joke.

[notyourtypical]

Let me get this straight: You bought a second house in Jupiter Inlet, FL at the height of the housing bubble (Summer 2006). Your house has devalued 20% ($150k plus?) and is probably still overvalued by 20-30%.

Lets call a spade a spade here. You made a bad investment and got burned; and the burning probably won't stop until 2010 or 2011. You gambled with your money on property you thought would appreciate forever, it didn't, and now you've lost money and stand to probably lose at least another $150k. That hurts, we get it. Just like it hurts that my portfolio and many many others has lost about 15% since August too.

So your solution is to leave your bad decisions with the bank. Nice. Make a bad investment (if real estate can even be considered an investment, historically it outpaces inflation by about 3%, not a great return) and dump it on someone else to foot the bill. Now the bank is left with another problem that we, the general public that didn't make idiotic housing decisions, will probably pay for in government loans to banks and a recession. Thanks a lot. To make it even better, this is your second home. Clearly you could afford payments a year ago, and you don't mention financial hardships (illnesses, losing jobs) so you can probably afford payments now.

Suck it up and sell the house for a loss and remember not to buy in a bubble.

As for the neighborhood problems, too bad. Maybe they could have been avoided by a bit more research? You did buy a house in Florida (swamp) less that 1 mile from the ocean (water) which is probably 10 feet above sea level. If your property management sucks take legal action. But these aren't the real reasons you want to walk away are they. If your house was worth 20% more now you'd sue the builder to fix your foundation. You'd move out away from your neighbors. The real reason you want out is you are going to have a mortgage thats two times what the house is worth.

The real reason you want out is you are stuck with a mortgage that will be twice as much as your house is worth.

Well, sucks to be you; reaping the harvest of your crappy financial decision. But to pass the buck to the bank who will probably be bailed out by people like me is maddening. I lose money, my friends lose money, my parents lose money for retirement because of idiots like you. Thanks.

Rant over.

[Eug]

Originally Posted by ♥ 

Anyway, as far as my "not honoring a commitment," I had a "commitment" with the builder to be honest and DISCLOSE that this house was previously razed and then was rebuilt, don't you think?

Worst logic ever.

The problem is that I cannot, morally and ethically, sell this house to someone else knowing that the house is probably going to shift and crack further.

So, knowing that, why should I take feel badly about the fact that the loan - a loan provided because of a relationship with the builder - is defaulted on, especially when they have $100K of my money?

The bottom line is you're saying you have to screw someone over to deal with your own financial issues, and you've decided it's the bank.

Fine, but don't expect everyone to support your decision from an ethical standpoint.

[Railroader]

Originally Posted by Face Ache 

Hey don't bunch her in with us moral degenerates. I pay my bills.

Point well made!

Originally Posted by Face Ache 

Cody (♥) is trying to convince herself of the validity of her decision. Considering someone talked her into buying a dodgy house in a swamp* in hurricane-land, using credit, that shouldn't be hard to do.

Anyone else remember how excited Cody was when she bought the house? She did tons of research, it's a gated community with great security... ahhh, those were the days. I guess the honeymoon is over.

Originally Posted by Face Ache 

*Okay I won't make a Shrek joke.

... and in the mornin', I'm makin' waffles!

[Mithras]

Well, I really am bummed to hear about the situation, ♥/Cody/(what was your first handle again)
I also try not to lean on family for financial advice, even though my wife's family are Jewish.

[Face Ache]

Originally Posted by Mithras 

Well, I really am bummed to hear about the situation, ♥/Cody/(what was your first handle again).

Yeah, her misfortune sucks. She has my sympathy there.

But how we handle our misfortunes reveals our character.

[♥]

I'm sorry that I'm not more ethical.

I'm just tired and have a health problem that makes arguing and fighting impossible.

Speaking of which, I have to sleep.

[Railroader]

Originally Posted by ♥ 

I'm sorry that I'm not more ethical.

I'm just tired and have a health problem that makes arguing and fighting impossible.

Speaking of which, I have to sleep.

Don't be "sorry". Owe up to your responsibilities and do not foreclose on a mortgage you can afford.