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Buy and Bail, or “Let’s Screw Up the Mortgage Industry Even More”

I saw a news bit on television yesterday about something called “Buy and Bail.” Apparently, folks that bought homes at inflated prices with adjustable rate mortgages in the last couple of years are now buying new, more affordable homes with new fixed-rate mortgages. Once they close on the second house’s mortgage, they quit paying on the original home and let it go into foreclosure. Illegal? I sure hope so.

In reality, none of this surprises me. The money people (banks, credit card companies, mortgage companies, etc.) insist on inviting Clover [Canis lupus familiaris, 49 in dog years, health excellent, no credit/work history] to apply for a credit card, buy life insurance, and refinance her mortgage.

I wonder how much her monthly payments would be on a $1M fixed-fixed rate 30-year mortgage? Two Thousand Dog Bones a Month?

Idiots.

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9 thoughts on “Buy and Bail, or “Let’s Screw Up the Mortgage Industry Even More”

  1. I am not a lawyer, but if they’re in a state where creditors can’t take your “primary residence”, they probably get to keep the new house after walking away from the old …

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  2. Well, I’m not the smartest person in the world, but if I had a house and was paying a mortgage on it and I wanted to buy another house and pay a mortgage on it, I would think the bank would wonder how you can afford the mortgage on two houses. They might not qualify, unless they lied and said they were going to rent the house. But then, they have to come up with a down payment on the new house.

    Not many people would qualify, nor could they afford it.

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  3. It’s unfortunate, but it happens. I had it happen to me, I sold a house in good faith many years ago. It was an assumable loan and they walked away a few months later. I wasn’t notified about it until months later, the mortgage company eventually auctioned it off. Otherwise, my credit would have been affected and it would have been a big mess. I think it’s more common today, with the housing market like it is. Never, ever sell a home by letting someone else assume the mortgage!

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  4. That doesn’t surprise me either…although I do think it’s illegal the way a lot of banks are handling our mortgages….
    have a great evening!
    Robin

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  5. I am a moron. I feel enormous guilt. I do have your books STACKED UP HERE THOUGH! LoL. I have NOT forgotten about you. I need a daily email apparently. **snort!** I promise I’m sending them. :-) Beth

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