Buy and Bail - Business Decision or Fraud?

By
Real Estate Agent with Silver State Realty & Investments

Some homeowners are buying new homes only to let their current home go into foreclosure.  They may be able to buy a better home and have a lower payment than the home they currently feel "stuck" with because they're $200,000 upside-down.

So while their credit is still good they buy another home and then try to short sale or just walk away from the first home.  Should they keep paying $3500 a month when they can pay $2500 for what might be a nicer home?  Is it fraud or just a good business decision?

Revised Fannie Mae guidelines which could go into effect next week may make the buy and bail more difficult by requiring supporting evidence that the borrowers can continue to pay both mortgages, but will that really stop someone who chooses to bail?  and is that a choice they should be free to make?

What do you think?

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Tags:
buy
fraud
bail
fannie mae
foreclosure
mortgage
short sale

Spam prevention
Show All Comments
Anonymous
Anonymous

A lot of people ask me if they can get away with this.  I simply answer "why take the risk" if they really wanted a lower monthly payment, they could try to do a loan modification with their current lender.  But why don't they.  Too much work?  In any case, 9 out of 10 homeowners I work with either lbail to rent another low cost home or buy another home, move into it then stop paying the mortgage on the first home thus going into foreclosure.  But they don't care at that point because they've already moved on.  Personally I think it is a form of fraud.  "Cheating the system" if you will.  Sometimes I feel for the people who feel the need to make this decision but mostly I think people have gotten spoiled, lazy, unwilling to take responsibility.  it will catch up with them.   Sad.

Jul 02, 2008 06:44 PM #1
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
145,160

Damon Botticelli

Realtor - Las Vegas Real Estate
Ask me a question
*
*
*
*
Spam prevention

Additional Information