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My job is to watch dreams die (2011)

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Re: My job is to watch dreams die (2011)

#111

Post by throwaway2037 »

rayiner wrote: post #27
Denvercoder9 wrote: post #23

Earlier quoted context omitted.

> If you're a tenant that's renting, you get no such legal protections In the USA. Many countries in Europe have renters protection similar to that of mortgage holders.

Depends on where you are in the U.S. Some places have extreme renter protections. Tenants can refuse to pay rent for months before you can even start an eviction proceeding. Then it takes months more. E.g. New York. https://www.reddit.com/r/Landlord/comments/15nn6o0/landlordu... . Landlords may forgo six months of back rent just to get the tenant out of the unit.

In my experience, the worse the winter weather, the stronger the tenant laws. The goal is to prevent eviction during winter months.

Re: My job is to watch dreams die (2011)

#112

Post by throwaway2037 »

alphager wrote: post #32
pkaye wrote: post #28

Earlier quoted context omitted.

How long can renters go without paying their rent in those countries?

In Germany, the process to evict may start after three months of unpaid rent. The eviction process itself takes about two years.

Real question: Do landlords resort to "hired help" to encourage non-paying tenants to leave more quickly? Two years sounds crazy. Many people who only own a second home for rent might go bankrupt without rent to pay the loan.

Re: My job is to watch dreams die (2011)

#113

Post by throwaway2037 »

dredmorbius wrote: post #71
Sohcahtoa82 wrote: post #59

Earlier quoted context omitted.

Maybe you have some insight over something that's always confused me. During the 2008 crash, I heard of a lot of people seeing their home value plummet, end up underwater on their mortgage, and decide to just abandon it. I've never understood why someone would do that, rather than ride it out and keep paying while the value recovers? I could MAYBE understand going "Nope, I'm out" if you had an adjustable-rate mortgag…

Balloon mortgages and an inability to refinance on attractive terms. It wasn't a matter of holding the property. Most simply couldn't make payments. Walkaways worked because real estate debt (in most of the US) is non-recourse debt. You leave the mortgage, the bank (or present mortgage holder) gets the property. Debt is settled. (Lender in this case, or the present mortage holder, itself a rather complex question giv…

    > Walkaways worked because real estate debt (in most of the US) is non-recourse debt. You leave the mortgage, the bank (or present mortgage holder) gets the property. Debt is settled.
It is rare this simple. You will likely be required to file bankruptcy, or something equally disruptive to "walk away". And, it will trash your personal credit rating. What is the incentive for banks to allow walk aways? It is very low. The administrative burden of taking ownership of a home, then trying to sell it will nearly guarantee losses for the lender. In most US states, if you cannot pay your mortgage, the bank will sell the home. Most of the time, any shortfall can be forgiven, but not easily. If there is a gain, you will be repaid, minus expenses, but this is exceptionally rare.

Re: My job is to watch dreams die (2011)

#114

Post by throwaway2037 »

sgerenser wrote: post #87
Sohcahtoa82 wrote: post #79

Earlier quoted context omitted.

> Balloon mortgages I remember seeing those. As far as I was concerned, I thought they were an absolute scam and I can't believe anybody chose one. > It wasn't a matter of holding the property. Most simply couldn't make payments. I know that was the case for most people, but I certainly heard about people that still could, but chose not to, simply because they were underwater. I was trying to understand those people.…

Look up the difference between “recourse” and “non-recourse” states. In a non-recourse state, the mortgage lender gets the house in a foreclosure, and there is no other recourse available (like suing for the remaining debt). Only 12 states are non-recourse, but some of the big players in the 2008 financial crash are among them (California, Arizona, Texas).

I wasn't aware of the divide between recourse and non-recourse states. Google tells me: >

Ref: https://www.financialsamurai.com/non-recourse-states-walk-aw...

It looks like resource vs non-resource also impacts the likelihood of foreclosure.

Re: My job is to watch dreams die (2011)

#115

Post by nullindividual »

DaiPlusPlus wrote: post #5
analyte123 wrote: post #4

During this same time period I had a project at a part-time gig which involved updating document templates and adding a few fields here and there for a legal application. The application was used by a law firm which specialized in mortgages. So I saw the details of various documents one is served in these situations: notice of default, acceleration notices, notice to vacate, and ultimately evictions and foreclosure a…

> you probably would have had to completely ignore probably a dozen of these documents for at least 6 months, not paying your mortgage all along. Fun-fact: thems the benefits of being a mortgage holder. If you're a tenant that's renting, you get no such legal protections - let alone discretion from whichever faceless entity actually owns the property: where I am in King County WA, I think, at most you can get 30 days…

Depends on where you live in King County and on the property. In Seattle, certain property owners must inform the City 90 days prior to sale (“Intent to Sell” city ordinance).

These laws are hyperlocal and making a sweeping statement about the County, State, or the US will ultimately be providing incorrect information.

Re: My job is to watch dreams die (2011)

#116

Post by throwaway2037 »

hervature wrote: post #104
Sohcahtoa82 wrote: post #59

Earlier quoted context omitted.

Maybe you have some insight over something that's always confused me. During the 2008 crash, I heard of a lot of people seeing their home value plummet, end up underwater on their mortgage, and decide to just abandon it. I've never understood why someone would do that, rather than ride it out and keep paying while the value recovers? I could MAYBE understand going "Nope, I'm out" if you had an adjustable-rate mortgag…

@dreadmorbius already mentioned nonrecourse loans but even recourse loans it should be obvious that if something made your property worth $0 (say Chernobyl real estate) then paying any amount of money to the bank is just a waste. Now, it may not be worth it to declare bankruptcy to absolve yourself of the loan, but the example is meant to illustrate that if the value loss is large enough, the recovery slow compared t…

    > In the US, this is normally offset by the fact that the government tries to make mortgage rates very close to the Fed rate
I assume you are talking about Fannie Mae, Freddie Mac, and Ginnie Mae. To me, there true purpose is the allow US home loans to be predominantly fixed rate. That is exceptionally rare in the world. In most countries, it is hard to get a fixed rate for longer than 10 years. In the US, 30 year fixed is normal. Part of the magic is unwritten gov't guarantees and clear rules that allow commercial banks to sell risky (fixed rate) loans to them. Mind you: This isn't free. It requires expert level interest rate risk management by those big three orgs. As we saw during 2008 GFC, they failed.

Re: My job is to watch dreams die (2011)

#117

Post by mc3301 »

throwaway2037 wrote: post #112
alphager wrote: post #32

Earlier quoted context omitted.

In Germany, the process to evict may start after three months of unpaid rent. The eviction process itself takes about two years.

Real question: Do landlords resort to "hired help" to encourage non-paying tenants to leave more quickly? Two years sounds crazy. Many people who only own a second home for rent might go bankrupt without rent to pay the loan.

I think that may be the point: to discourage owning a second home for rent.

Re: My job is to watch dreams die (2011)

#118

Post by throwaway2037 »

howard941 wrote: post #6

I worked the other side of this thing, as a debtors' bankruptcy attorney. Sometimes I could save the house but usually it wasn't in the cards: The income wasn't there and the bankruptcy laws were skewed by GWB. Fortunately there were many times when - if a house wasn't an issue - the debtor was much better off without an albatross around his neck. Overall it was a rewarding occupation - not monetarily, the rules kept…

Thank you to share your first hand experience.

    > bankruptcy laws were skewed by GWB
Can you explain this more, including "GWB"?

Re: My job is to watch dreams die (2011)

#119

Post by throwaway2037 »

ThunderSizzle wrote: post #67
pram wrote: post #62

Earlier quoted context omitted.

Oof, that sucks. My parents managed the exact opposite. We had a house in the middle of nowhere. Their business was slowly going under so they decided to sell and move in with my mothers father (lol) and did this at the absolute top of the market (2006) The person who bought it is still holding the bag if Zillow is any indication, it’s still about $30k under what he bought it for. I often think about how many people…

Its an interesting tale, because we might be in a very similar bubble. Or not. It's hard to tell, because the dollar has been so devalued, while housing is over-inflated, and money is expensive. It's a cruel joke when money is worthless and expensive at the same time.

    > because the dollar has been so devalued
Can you explain? The USD vs EUR FX rate has barely changed in 10 years. If you believe the US dollar has been "so devalued", then you must believe the same for Euro.

Re: My job is to watch dreams die (2011)

#120

Post by mingus88 »

Sohcahtoa82 wrote: post #41
jopsen wrote: post #35

Earlier quoted context omitted.

No amount of laws can protect renters from a stupid landlord :) I could certainly see places where using a master key without authorization is a stupid move.

Some landlords have a HUGE superiority complex which makes them look down upon or even despise their tenants for no reason at all.

Landlords have a financial incentive to dehumanize their tenants. Every repair or improvement they make directly affects their take.

This is probably the #1 reason I haven’t bought a second house or investment property, despite it being the easiest way for me to kickstart some passive income. 20 years of renting has really embedded some class warfare into my psyche.

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