Multiple Mortgages, HELOCs

rolltimer · 03-18-2008, 06:39 AM

How many of you have more than one mortgage such as 2nd, 3rd, Home Equity Line of Credit or a mortgage on a second home? Do you feel any pressure to walk away from paying it due to decreased home value?

I am curious as to why so many foreclosures are taking place. I have always heard that as long as people have jobs, they will pay their mortgage even if they let everything else go. Where are the foreclosed-upon going? Apartments? Moving in with friends or relatives? Living on the streets? In their cars?

yourbeginnings · 03-18-2008, 07:38 AM

I have a 1st and 2nd mortgage. The 2nd was to avoid wasting $60 per month on PMI.

There are many reason for the foreclosure crisis we are going through. In my opinion there are lots of people to blame. However, I truly believe the people to blame is the consumer. Biting off more than they can handle.

When we purchased our place, neither of us wanted to spend all our paychecks on the mortgage. Thus we told our agent do not show us anything over $100K. He listened and we found a great place in a good neighborhood.

Too many people out there wanted the McMansion and had it for a couple of years until the foreclosure.

kav122 · 03-18-2008, 07:39 AM

I have a 1st and 2nd, also to avoid PMI

Quote:

Originally Posted by rolltimer

I am curious as to why so many foreclosures are taking place. I have always heard that as long as people have jobs, they will pay their mortgage even if they let everything else go.

I really don't think there are as many foreclosures as the media makes it seem. I know there are some, but I don't think that percentage wise there are as many as the media portrays there to be.

I know that by saying that, I might open myself to a lot of criticism.

The crisis isn't affecting me. Maybe I live in a bubble or maybe Mpls isn't as hard hit as the rest of the country, but I am not being affected. Maybe if I lived in Detroit or Stockton I would have it different.

Quote:

Originally Posted by rolltimer

Do you feel any pressure to walk away from paying it due to decreased home value?

I bought my house for the long run, so I don't care if the value is going down right now. I'm confident it will come back up. If I was in trouble with getting behind, I would not be on the computer right now. I would be cleaning houses or whatever I could do to get myself out. If I had to work 3 jobs to save my house I would, and never, under no circumstances would I "walk away." I think that I value my integrity more than that. **DISCLAIMER**This is MY opinion of what I would do. I am not passing judgement. Everyone's situation is different.

Quote:

Originally Posted by rolltimer

Where are the foreclosed-upon going? Apartments? Moving in with friends or relatives? Living on the streets? In their cars?

I don't know anyone that has been foreclosed on, so I don't know where the foreclosed-upon are going.

khorrell · 03-18-2008, 08:49 AM

We have multiple mortgage on multiple properties. We are very fortunate that we have owned them for a while and therefore are in a solid position. However, I agree that much of the responsibility lies with the consumer. We could live in the McMansion but I refuse to consider anything other than a fixed rate, full documentation, traditional loan. We might have missed out on some great opportunities to make a bundle by using creative financing as a tool. However, it was worth it to me to know that I can pay all my bills each month. I am very thankful that I never let real estate fever get to me!

rstlne · 03-18-2008, 08:51 AM

No mortgage yet. I'll move to an area with cheaper real estate before I buy.

yourbeginnings · 03-18-2008, 10:42 AM

Here is a video about tent cities poping up in LA. http://consumerist.com/369096/ex+sub...n-la-outskirts

It is from a BBC report.

Julie Rains · 03-20-2008, 05:01 PM

I have been curious about who is being foreclosed on also. There are public listings in the paper and I have cross-referenced them with property tax listings that are public record (just an odd hobby of miine). Very few in my area are McMansions -- most of the foreclosures are on homes that people have owned/lived in for many years and are valued at less than $120K. So I am guessing these are people in their 40's and older who refinanced their homes for whatever reason. There are a few homes that must have been investment properties (owners have several listings) and just a few that were higher end properties (in my area, $300K and above).

Kathryn · 03-20-2008, 05:25 PM

Quote:

Originally Posted by rolltimer

How many of you have more than one mortgage such as 2nd, 3rd, Home Equity Line of Credit or a mortgage on a second home? Do you feel any pressure to walk away from paying it due to decreased home value?

I am curious as to why so many foreclosures are taking place. I have always heard that as long as people have jobs, they will pay their mortgage even if they let everything else go. Where are the foreclosed-upon going? Apartments? Moving in with friends or relatives? Living on the streets? In their cars?

We had a HELOC for a while (almost never used it, though), then closed that and took out a straight home equity loan last fall to buy a very cheap vacation property ($40K), then consolidated that in a refi last month at a quite attractive rate. Our loan-to-value ratio is extremely comfortable, and it's difficult to imaging a scenario where we would face foreclosure.

My impression is that a big chunk of the foreclosures are on 2nd homes (either vacation homes, or investment properties; probably some people also who have moved and were carrying two mortgages, and were unable to unload the former residence in today's spongy market). As far as what happens to the rest--people who go through foreclosure on a primary residence--I'd image that they do any combination of the things you list.

72Tiger · 03-20-2008, 05:27 PM

Since last June, I am free and clear. Single mortgage before that.

gtwise · 03-28-2008, 08:14 AM

3 mortgages on the same property. The second mortgage was done to avoid PMI and do an 80-15-5 instead. The third mortgage was to build our pool. We're paying off our second mortgage as soon as we excercise some stock options (we're waiting for the value of the stock to go up even more before we pull the trigger). We'll probably pay off the pool loan next year with some more stock options.

As for walking from the house and leaving the mortgages behind, here in TX the housing market has yet to be hit and home values are still pretty stable so my house probably worth as much is not more than what I paid for it.

View Poll Results: How many mortgages do you have?
No mortgage. Pay rent or have housing supplied by employer.	4	26.67%
One mortgage	6	40.00%
First and second mortgages on the same property	2	13.33%
Three or more mortgages on the same property	1	6.67%
One or more mortgages on multiple properties	1	6.67%
No mortgage; own property free and clear	1	6.67%
Voters: 15. You may not vote on this poll

03-18-2008, 06:39 AM	#1
rolltimer Senior Member Join Date: Dec 2007 Location: Alabama Posts: 136 Thanks: 0 Thanked 0 Times in 0 Posts Reputation: (24)	Multiple Mortgages, HELOCs How many of you have more than one mortgage such as 2nd, 3rd, Home Equity Line of Credit or a mortgage on a second home? Do you feel any pressure to walk away from paying it due to decreased home value? I am curious as to why so many foreclosures are taking place. I have always heard that as long as people have jobs, they will pay their mortgage even if they let everything else go. Where are the foreclosed-upon going? Apartments? Moving in with friends or relatives? Living on the streets? In their cars? Last edited by rolltimer; 03-18-2008 at 06:48 AM.

03-18-2008, 07:38 AM	#2
yourbeginnings Senior Member Join Date: Mar 2008 Location: Atlanta, GA Posts: 121 Thanks: 0 Thanked 0 Times in 0 Posts Reputation: (41)	I have a 1st and 2nd mortgage. The 2nd was to avoid wasting $60 per month on PMI. There are many reason for the foreclosure crisis we are going through. In my opinion there are lots of people to blame. However, I truly believe the people to blame is the consumer. Biting off more than they can handle. When we purchased our place, neither of us wanted to spend all our paychecks on the mortgage. Thus we told our agent do not show us anything over $100K. He listened and we found a great place in a good neighborhood. Too many people out there wanted the McMansion and had it for a couple of years until the foreclosure. __________________ http://www.yourbeginnings.com - Free Genealogy Hosting Software Last edited by yourbeginnings; 03-18-2008 at 07:39 AM. Reason: spelling

03-18-2008, 10:42 AM	#6
yourbeginnings Senior Member Join Date: Mar 2008 Location: Atlanta, GA Posts: 121 Thanks: 0 Thanked 0 Times in 0 Posts Reputation: (41)	Here is a video about tent cities poping up in LA. http://consumerist.com/369096/ex+sub...n-la-outskirts It is from a BBC report. __________________ http://www.yourbeginnings.com - Free Genealogy Hosting Software

03-20-2008, 05:01 PM	#7
Julie Rains Wise Bread Blogger Join Date: May 2007 Location: North Carolina Posts: 401 Thanks: 1 Thanked 0 Times in 0 Posts Reputation: (189)	I have been curious about who is being foreclosed on also. There are public listings in the paper and I have cross-referenced them with property tax listings that are public record (just an odd hobby of miine). Very few in my area are McMansions -- most of the foreclosures are on homes that people have owned/lived in for many years and are valued at less than $120K. So I am guessing these are people in their 40's and older who refinanced their homes for whatever reason. There are a few homes that must have been investment properties (owners have several listings) and just a few that were higher end properties (in my area, $300K and above). __________________ Wise Bread and Parenting Squad blogger

03-18-2008, 08:49 AM	#4
khorrell Senior Member Join Date: Jan 2008 Location: near Washington DC Posts: 608 Thanks: 0 Thanked 1 Time in 1 Post Reputation: (84)	We have multiple mortgage on multiple properties. We are very fortunate that we have owned them for a while and therefore are in a solid position. However, I agree that much of the responsibility lies with the consumer. We could live in the McMansion but I refuse to consider anything other than a fixed rate, full documentation, traditional loan. We might have missed out on some great opportunities to make a bundle by using creative financing as a tool. However, it was worth it to me to know that I can pay all my bills each month. I am very thankful that I never let real estate fever get to me!

03-18-2008, 08:51 AM	#5
rstlne Senior Member Join Date: Jan 2008 Location: New Jersey Posts: 368 Thanks: 0 Thanked 0 Times in 0 Posts Reputation: (115)	No mortgage yet. I'll move to an area with cheaper real estate before I buy.

03-20-2008, 05:27 PM	#9
72Tiger Senior Member Join Date: Jan 2008 Location: Knoxville, TN Posts: 301 Thanks: 0 Thanked 0 Times in 0 Posts Reputation: (38)	Since last June, I am free and clear. Single mortgage before that.

03-28-2008, 08:14 AM	#10
gtwise Member Join Date: Jan 2008 Posts: 46 Thanks: 0 Thanked 0 Times in 0 Posts Reputation: (14)	3 mortgages on the same property. The second mortgage was done to avoid PMI and do an 80-15-5 instead. The third mortgage was to build our pool. We're paying off our second mortgage as soon as we excercise some stock options (we're waiting for the value of the stock to go up even more before we pull the trigger). We'll probably pay off the pool loan next year with some more stock options. As for walking from the house and leaving the mortgages behind, here in TX the housing market has yet to be hit and home values are still pretty stable so my house probably worth as much is not more than what I paid for it.

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