[Hamtramck House] buy and bail

[hamtown mike]

Hey Yes'ers

Detroit and Hamtramck have finally 'beaten' me. I've tried for 7 years. The only thing I can change in this situation is me. So I started looking for a new home, gulp, out in the burbs. I have really good credit and was pre-approved for a decent second mortgage.

After looking at the feasibility of renting out my current home [[0% chance) I realized that if I proceeded, despite my best intentions, I would in short time be pulling a buy and bail. [[I owe far more on my house than what it would appraise for and carrying both mortgages is not possible.)

I've called off my mortgage broker and realtor, whom were both very sympathetic and understanding.

I would love to hear any stories of folks doing this in Detroit-The risks. The consequences. The results. Any legit ways of getting out from under a house without destroying my credit for the next 3-7 years?

[bailey]

Hey Yes'ers

Detroit and Hamtramck have finally 'beaten' me. I've tried for 7 years. The only thing I can change in this situation is me. So I started looking for a new home, gulp, out in the burbs. I have really good credit and was pre-approved for a decent second mortgage.

After looking at the feasibility of renting out my current home [[0% chance) I realized that if I proceeded, despite my best intentions, I would in short time be pulling a buy and bail. [[I owe far more on my house than what it would appraise for and carrying both mortgages is not possible.)

I've called off my mortgage broker and realtor, whom were both very sympathetic and understanding.

I would love to hear any stories of folks doing this in Detroit-The risks. The consequences. The results. Any legit ways of getting out from under a house without destroying my credit for the next 3-7 years?

well, one risk of walking away is that the bank can still come after you for the deficiency. Michigan is a recourse state, meaning the bank can [[although for some reason they dont/havent really availed themselves of the option) come after you personally for the deficiency between what you owe and what they recovered in a foreclosure sale.

Have you looked at short sale? its a long process and still dings you, but iirc, not as badly as a foreclosure. Also, through calendar year 2012 the amount written down by your bank will not be taxed as income to you.

in any case, I dont think you're getting out with your credit unaffected.... unless you find a buyer and can eat the loss.

p.s quick question, how did you get qualified for the second mortgage if you can not afford the second mortgage payment?

[Eric_c]

Mike -

I'm curious to know why you're so certain there's no way you could lease the place? Is it in good shape? What part of Hamtramck/Detroit? Are you north of Carpenter or...?

The only reason I ask is because I've been relatively successful as a landlord in Detroit and may be able to lend some advice on how to make an asset out of what you currently only perceive to be a liability.

As shitty as you think the place may be, maybe someone else from 'outside' can see value...?

[iheartthed]

in any case, I dont think you're getting out with your credit unaffected.... unless you find a buyer and can eat the loss.

Absolutely will not get out without messing up his/her credit.

To the o/p, the banks will probably not come after you for the loss they take on the foreclosure unless you have a substantial net worth. Otherwise, it's a waste of money for them. Even if you do go into another mortgage you probably won't have a positive net worth for quite some time [[unless you already have a positive net worth, in which case I would say it's not a good idea to walk away).

[hamtown mike]

p.s quick question, how did you get qualified for the second mortgage if you can not afford the second mortgage payment?

That's a good question. Somehow I have amazing credit, like top 10% credit. And maybe maybe maybe if I ate ramen noodles, quit smoking and never traveled ever again I might have a teensy-tiny outside chance of carrying both, but I have no desire to be house poor. It would be far more than the recommended 25% of take home. I think the new lender was considering potential rental income from property #1 as real income. Or some other form of gypsy magic like that. I came across an interesting quote this weekend about that. "Sharks don't care if the shark that made the original kill gets to eat."

[hamtown mike]

I looked into deficiency settlements. There have not been many. The cases I did find were high dollar developments that fell through. I would guess my house would go for 5k in a foreclosure despite being the best house on the street. Things have gotten that bad.

A short sale on my house could leave me $30k in the hole, at least. I've been told that banks have been selling that debt [[often for pennies on the dollar) over to collection agencies.

It all comes down to stress. To hell with morals-those went out the door the day I found a sh#t filled pair of underpants in my back yard-Presumably some form of retaliation after I called the police to report a crime that I witnessed.

The potential financial stress of short sale or a deficiency settlement is still greater than the stress of living among extremely poor, angry, violent people.

It just bugs the living beejeebees out of me that month after month I keep dumping money into a losing proposition.

[bailey]

..what Eric said.

Also, your situation just sucks. that is a lot of time, money and effort invested to have it stolen by shitheads.

[hamtown mike]

It's a great house- I've put a lot of work into it. I would hate to leave all the effort behind. Sadly it is south of Holbrook. [[waa waaaa goes the trombone)

The windows [[original) are in rough shape. The utility bills, linked to shit windows, are pretty steep. The place would not earn a certificate of occupancy without dropping 5k into the place. The same 5 k I was planning on using as part of the down payment for house #2.

I've spoken to a couple rental agencies that seem a bit "scammy." They get paid whether there is a renter in there or not. They kept on saying they have a contract and that with a $500 check from me, we could sign right now and get started. Plus they wanted a certificate of occupancy as well.

And I agree. I don't want a kid chewing on the walls and getting the dain-brammage.

So I think I'm left with a resounding "not now"

[Eric_c]

It's a great house- I've put a lot of work into it. I would hate to leave all the effort behind. Sadly it is south of Holbrook. [[waa waaaa goes the trombone)

The windows [[original) are in rough shape. The utility bills, linked to shit windows, are pretty steep. The place would not earn a certificate of occupancy without dropping 5k into the place. The same 5 k I was planning on using as part of the down payment for house #2.

I've spoken to a couple rental agencies that seem a bit "scammy." They get paid whether there is a renter in there or not. They kept on saying they have a contract and that with a $500 check from me, we could sign right now and get started. Plus they wanted a certificate of occupancy as well.

And I agree. I don't want a kid chewing on the walls and getting the dain-brammage.

So I think I'm left with a resounding "not now"

I think you *could* be blinded by your sense of desperation, Mike and that an opportunity may exist. While things like utilities will come in to play, in the end, that's not your responsibility unless you make it so. Additionally, just because you might not be a good fit with your neighbors doesn't mean that someone else won't.

Finally, you're luckier to be "south south" of Holbrook than a lot of other places! Always could be worse.

If you feel like divulging a *little* more info, I'm sure I could offer some free advice on how to better leverage your current home in order to achieve your goal!

IM or e-mail and I can toss you some scenarios. Ecriteser@hotmail.com

[gazhekwe]

Options, options, there is more than one way to skin a cat. It sounds like you might like the area OK, but some of the people around are making it difficult, scary and negative. Is it possible to determine what good neighbors might be around you and suffering like you? Without addressing the ones who are making trouble, could you start confabbing with the ones who seem more stable and see if maybe you can all band together to try and create some positive pressure on the street? There are some community ways to address things. Charles Pugh gave a good list of options for community members who have gotten together to decide to work on the problems together. Thing is, even just two or three other households can start showing some positive action.

I'm not trying to be Pollyanna, just casting out something that might be workable if you decide you have to stay there.

[Jason]

Options, options, there is more than one way to skin a cat. It sounds like you might like the area OK, but some of the people around are making it difficult, scary and negative. Is it possible to determine what good neighbors might be around you and suffering like you? Without addressing the ones who are making trouble, could you start confabbing with the ones who seem more stable and see if maybe you can all band together to try and create some positive pressure on the street? There are some community ways to address things. Charles Pugh gave a good list of options for community members who have gotten together to decide to work on the problems together. Thing is, even just two or three other households can start showing some positive action.

I'm not trying to be Pollyanna, just casting out something that might be workable if you decide you have to stay there.

Hey, maybe it would be cheaper just to buy THEIR houses and kick them out of the neighborhood, lol

[Jason]

If you can I think you should pay back the money that you owe, somehow. Otherwise you're basically stealing however many tens of thousands of dollars you owe.

[iheartthed]

If you can I think you should pay back the money that you owe, somehow. Otherwise you're basically stealing however many tens of thousands of dollars you owe.

Unless he takes the house and hides it from the bank, he is not stealing money from the bank. I'd personally like to see some of these banks eat the losses on a mess that they had a large role in creating. Unfortunately, the government policy thus far has been to protect the banks and let the homeowners swallow the losses.

[Jason]

It's true that the bank will get the house, but they weren't investing in the house, they were investing in the debt. All they want is the tiny bit of interest that people pay. Maybe he's not stealing from them but he'd be screwing them over.

The government policy has been to bail out the banks during this crisis because the economy would have fallen apart if they hadn't. But the government constantly bails out individuals through safety net programs, and has spent a lot more money doing that in however many decades than it has bailing out banks. And are homeowners really swallowing their own losses if they can just walk away with only some damage to their credit? Not only that, but no one has to own their home. So I think everyone is part of the system and had a part to play.

The housing system is definitely screwed up, to an extent that even after all this most people don't [[I sure didn't) realize. There's a really good discussion of it here. http://www.cyburbia.org/forums/showthread.php?t=42378 [[if I sounded biased towards the banks earlier, read this thread, lol)


But this is a different issue than that. He bought a house that he didn't want, and now he wants to buy another house, but doesn't have enough money. He didn't mention any money problems and he says he has good credit so it wasn't a shady loan, and he is capable of paying it off, even if he's upside down. He just doesn't want to live in Hamtramck anymore.

So he made a mistake and got unlucky with the timing, and I think if he can pay for the house he bought, he should, that's all. That's just my opinion though, and obviously he can do whatever he'd like.

[iheartthed]

But this is a different issue than that. He bought a house that he didn't want, and now he wants to buy another house, but doesn't have enough money. He didn't mention any money problems and he says he has good credit so it wasn't a shady loan, and he is capable of paying it off, even if he's upside down. He just doesn't want to live in Hamtramck anymore.

So he made a mistake and got unlucky with the timing, and I think if he can pay for the house he bought, he should, that's all. That's just my opinion though, and obviously he can do whatever he'd like.

You're right, it is your opinion. You're using your moral judgment to reason through his matter of practicality. If Congress had done that in debating whether to bail out the banks then they would have surely let them all fail.

The bottom line is that he could walk away from the house because he doesn't like the way the sun hits his window in the morning and it wouldn't matter, so long as he's prepared to deal with the pre-determined ramifications. There is no law against what he wants to do; here in the free world we don't have things like debtors prison that they do in the Middle East. The bank took a calculated risk on writing him a mortgage and now they may lose out on that. Their bad.

[hamtown mike]

But this is a different issue than that. He bought a house that he didn't want, and now he wants to buy another house, but doesn't have enough money. He didn't mention any money problems and he says he has good credit so it wasn't a shady loan, and he is capable of paying it off, even if he's upside down. He just doesn't want to live in Hamtramck anymore.

So he made a mistake and got unlucky with the timing, and I think if he can pay for the house he bought, he should, that's all. That's just my opinion though, and obviously he can do whatever he'd like.

7 years ago I bought a house that I loved. I still love and want my house. If I could fill enough balloons with helium and lift my house away I would.

The condition of my street has dramatically changed in those 7 years. Beginning with the actual street itself-it's literally crumbling. Every few weeks I have to vacuum out about a pound of pebbles that gets tracked into my car. The street was dead-ended to build the Henry Ford Rehab clinic years ago. Part of the deal was to build a turnaround at the dead end. To this day it is a mud pit thanks to Henry Ford's misaligned sprinkler system and parking lot runoff.

The garbage. OMG the garbage! shoes shoes shoes. Where do they come from? snack packaging, ice cream wrappers, big chug bottles, leaflets, shopping carts, children's toys, couches and on and on. [[At least twice a year I do a full pick of the street as slack jawwed children crowd around me asking me why I'm cleaning the street, usually with the conversation ending with "all christians should be killed.") I think I'll be giving the holiday lights a rest this season.

The renters. I would guess that 3/4's of the homes on my street are rentals. 3 abandoned homes-one right next door to me with an on again off again squatter and one burnt out shell of a house on this forgotten one block stretch. In the 7 years, 4 old polish lady hold outs passed away. Their out of state children sold the homes for dirt, to dirt bag scumlords just to be done with it. Thanks, love ya lots.

No neighborhood cohesion. Whomever said our differences make us stronger was gravely mistaken. There are at least 6 different ethnicities on my street so communication, which is key to stable neighborhoods, is not easy if even possible.

Thug-assed bass at 2 am. In Hamtramck a police officer's peace cannot be disturbed so it is on the resident to file the complaint and then go to court.

Unmaintained outdated single sewers that have backed up 4 times in the 7 years. Each time at least a foot of run off and human waste in my basement. With the city council's response of "that's just life in Hamtramck." Oh and my insurance adjusted to reflect the claim I made 3 years ago from the flooding, but hey, that's just life in Hamtramck. And oh, I bought a new vehicle a few months ago and that insurance bill jumped through the roof.

oh, oh and to add insult to injury I have the added joy of paying a 1% income tax for the privilege of living in such a utopia.

When I first bought the house I hosted a holiday party. More than 150 people came through. [[I did let the neighbors know, hell I invited them to stop by.) Today I am embarrassed to have people come by as well as fearful for their safety and the security of their vehicles.

I'm not rolling out this litany as a woe-is-me tale. I'm trying to describe the changes that happened to a fully occupied quiet and peaceful street over the past few years. And yes, I can financially afford my house, but spiritually I cannot. The atmosphere is changing me.

To those considering Hamtramck as a place to live- yes it is a fun place, but choose wisely. Look inside the core. North of Holbrook, south of Carpenter [[like way south), east of Lumpkin and west of Conant. and keep an eye of owner to renter ratio- not that you'd be able to tell. If you looked at the books most of the houses are homesteaded but the owners are not living in them.

[DetroitPole]

7 years ago I bought a house that I loved. I still love and want my house. If I could fill enough balloons with helium and lift my house away I would.

The condition of my street has dramatically changed in those 7 years. Beginning with the actual street itself-it's literally crumbling. Every few weeks I have to vacuum out about a pound of pebbles that gets tracked into my car. The street was dead-ended to build the Henry Ford Rehab clinic years ago. Part of the deal was to build a turnaround at the dead end. To this day it is a mud pit thanks to Henry Ford's misaligned sprinkler system and parking lot runoff.

The garbage. OMG the garbage! shoes shoes shoes. Where do they come from? snack packaging, ice cream wrappers, big chug bottles, leaflets, shopping carts, children's toys, couches and on and on. [[At least twice a year I do a full pick of the street as slack jawwed children crowd around me asking me why I'm cleaning the street, usually with the conversation ending with "all christians should be killed.") I think I'll be giving the holiday lights a rest this season.

The renters. I would guess that 3/4's of the homes on my street are rentals. 3 abandoned homes-one right next door to me with an on again off again squatter and one burnt out shell of a house on this forgotten one block stretch. In the 7 years, 4 old polish lady hold outs passed away. Their out of state children sold the homes for dirt, to dirt bag scumlords just to be done with it. Thanks, love ya lots.

No neighborhood cohesion. Whomever said our differences make us stronger was gravely mistaken. There are at least 6 different ethnicities on my street so communication, which is key to stable neighborhoods, is not easy if even possible.

Thug-assed bass at 2 am. In Hamtramck a police officer's peace cannot be disturbed so it is on the resident to file the complaint and then go to court.

Unmaintained outdated single sewers that have backed up 4 times in the 7 years. Each time at least a foot of run off and human waste in my basement. With the city council's response of "that's just life in Hamtramck." Oh and my insurance adjusted to reflect the claim I made 3 years ago from the flooding, but hey, that's just life in Hamtramck. And oh, I bought a new vehicle a few months ago and that insurance bill jumped through the roof.

oh, oh and to add insult to injury I have the added joy of paying a 1% income tax for the privilege of living in such a utopia.

When I first bought the house I hosted a holiday party. More than 150 people came through. [[I did let the neighbors know, hell I invited them to stop by.) Today I am embarrassed to have people come by as well as fearful for their safety and the security of their vehicles.

I'm not rolling out this litany as a woe-is-me tale. I'm trying to describe the changes that happened to a fully occupied quiet and peaceful street over the past few years. And yes, I can financially afford my house, but spiritually I cannot. The atmosphere is changing me.

To those considering Hamtramck as a place to live- yes it is a fun place, but choose wisely. Look inside the core. North of Holbrook, south of Carpenter [[like way south), east of Lumpkin and west of Conant. and keep an eye of owner to renter ratio- not that you'd be able to tell. If you looked at the books most of the houses are homesteaded but the owners are not living in them.

My neighborhood isn't doing that badly, but has varying degrees of what you describe.

My issue with all this is that you don't have to be rich to clean up your garbage or show respect for others. I've seen this kind of behavior creeping into my neighborhood. Lord knows those old Polish ladies weren't rich, but had decent values. It takes virtually no money to show respect for others.

Why not pick up the garbage when all you're doing is fucking sitting on your porch and mean-muggin' people all day, anyway? Flower beds and lawns full of weeds? Flower seeds can be had for pennies. Office furniture and barbeque grills do not belong on the front porch, period - you have a backyard. Nobody wants to hear your moronic loud music - maybe I should blast some Chopin for everyone. We have regular garbage days so do not leave your trash to decay wherever you feel like it and attract rodents. The sidewalk is not a place for you to sit, it is for people to walk. I don't get it, even a fucking dog doesn't shit in its own crate.

[princealbert]

All they want is the tiny bit of interest that people pay. Maybe he's not stealing from them but he'd be screwing them over.

You're joking, right? The "tiny bit" is more than 1.5 times the price of the house.

http://www.bankrate.com/calculators/...alculator.aspx

[rjk]

Just a few months ago we went for a bike ride and hit the street just south of the strip mall at Holbrook and JC. I don't think I've ever seen a street with as much littler as this one. Garbage piled up everywhere. Three of the houses had adults sitting on the porch with numerous kids playing in the street. I'd go absolutely nuts if I lived on that street because I'd be picking up litter and confronting people who are doing the littering which would probably just lead to problems. I could see where someone just gives up and says the hell with it. No matter how much effort you putting into you're home you can just get to the point where you feel outnumbered.

[Jason]

You're joking, right? The "tiny bit" is more than 1.5 times the price of the house.

http://www.bankrate.com/calculators/...alculator.aspx

That's because the value of the house went down. The bank still payed X amount of money to buy the house. In return, over a period of time the home "owner" pays back the X plus some interest. The interest is their profit. The current value of the house doesn't change how much it was originally bought for or how much money the bank is out of.

[rondinjp]

That's because the value of the house went down. The bank still payed X amount of money to buy the house. In return, over a period of time the home "owner" pays back the X plus some interest. The interest is their profit. The current value of the house doesn't change how much it was originally bought for or how much money the bank is out of.

That was why the bank got a lien on the property. It was so if the owner walked they got the property. The banks created the current mess just as much as the homeowners. If they were being prudent like in the past they would have realized how inflated prices were, how bad the investment in the loan was, and would have never agreed to the financing. Plus just like how they dumped a lot of their bad investments on Fannie and Freddie Mac they are getting stuck with these houses. It's a game of musical chairs in which the banks thought they were smarter and they lost.

[princealbert]

That's because the value of the house went down. The bank still payed X amount of money to buy the house. In return, over a period of time the home "owner" pays back the X plus some interest. The interest is their profit. The current value of the house doesn't change how much it was originally bought for or how much money the bank is out of.

If you just pay your regular monthly payment on a 30 year loan, the mortgage company will get back the original value of your home PLUS at least 1.5 times the original value [[depending on the interest rate). That does not constitute a "little bit" of interest in my book. The banks cover their risks by selling this scheme to borrowers. If the value of the property drops by 50% or more, and you continue to pay regular monthly payment on the mortgage, the bank will get back the original value + at least THREE TIMES the real value of your home. If you are not comfortable or happy in your home, or with this financial arrangement, it is not worth your risk to stay, get the 4377 out. If you are happy in your home the best thing to do is pay a little extra each month on your mortgage, if you can afford it, since each extra dollar you spend eliminates about $1.50 to $2 interest. Remember, the bank already got a bunch of your money and they have insurance to cover their loses.

[rjk]

Hey Yes'ers

Detroit and Hamtramck have finally 'beaten' me.

Have you considered moving to another part of Hamtramck? I'm curious to hear your views on the city as a whole.

I love to visit Hamtramck, but blight really seems to be creeping into many of the neighborhoods. There also seems to be a lack of civic pride with the amount of litter that one can see throughout the city.

[Detroitej72]

Have you considered moving to another part of Hamtramck? I'm curious to hear your views on the city as a whole.

I love to visit Hamtramck, but blight really seems to be creeping into many of the neighborhoods. There also seems to be a lack of civic pride with the amount of litter that one can see throughout the city.

I live down the street from Polish Village Cafe, and our neighborhood is stable. We have a mix of immigrants and long time residents and everyone tends to watch out for each other. I like to walk the perimeter of the city in the evening, or stroll to a neighborhood bar, and I have never had any problems. Overall, my only regret about living in Hamtown is that I didn't move here sooner.

[rjk]

I have a few relatives and some friends that live in Hamtramck so I spend a decent amount of time there. Actually we had dinner at PVC last night and went for a walk, we probably passed by your house. Hamtramck has always been one of my favorite cities to visit.

Anyone clued in on the finances of the city? With the settlement on the taxes from GM are they out of the woods yet financially?