Well, I guess there will always be a way to get around ‘the system’.
Have you heard about buyers that are buying and then bailing? Good idea or not? Illegal or not?
Many around the country are in the same predicament. They bought a house at the peak of the market in 2005 – 2006 and paid an overinflated price for it. Today, as we all know, many areas of the country are experiencing market corrections. In some areas that’s putting it lightly, I know. Okay, in many areas the “proverbial real estate bubble” has burst, and owners are losing their shirt – there, I said it.
Well, these owners know there is no easy way out of this seemingly impossible situation, so what are they doing? They are going out and buying a second home, at today’s lower, more realistic prices. In order to qualify, they are informing their lender that they are going to be renting out their existing property. Some even produce a “dummy lease” for their “dummy tenant”.
When they finish with the purchase of their new home at today’s lower prices then walk away from the first home, and let it go back to foreclosure. They are dumping it.
Who cares? Right? They already have a new property. What difference does it make to them?
No big deal, OR IS IT?
We have heard that tighter guidelines could keep this from happening in the future. But, are they?
Isn’t this just costing the taxpayers more money?
Isn’t this driving property values down around the country…when homes are coming back on the market as foreclosures?
Or are we putting buyers in the market that wouldn’t have been there otherwise? Or are a large percentage of these owners going to lose their home to foreclosure whether they do this or not? I know in our area of South Brevard County Florida, foreclosures are driving prices down because banks are becoming more aggressive with properly pricing them to quickly move them off the market.
So, what do you think?
Should owners who paid overinflated prices for their home be able to buy and bail? Or is it fraud?