Blog Somebody

Have you seen the commercials for John Cummuta. He claims to have a system where your debts can make you rich. Well I have a lot of debt, thanks to my failed investement in Homestead Florida. I am looking into a way to get rid of my debt too. I have found that there are actually companies that do loan restructuring negociations with your Bank. But first you have to be behind on at least a few payments. So does that mean that I should ruin my credit? Hopefuly not.

I mentioned in another post about 2 weeks ago, that I feel like I should just walk away. But since that time, I have sent the $6200 check to pay for the taxes and $800 for another year of insurance. I am giving this deal 1 more year to get better. My plan is to keep my credit good, long enough to refinance my principal home. I am also waiting for 30 year interest rates to drop back down to 5.5 % and it is getting close. All we need is a few more bad stock market days and poor economic indications to be posted, mayeb one that says that we are officially in a recession and hopefully We’ll get the 5.5 percent rate to come back for one more time. I will be closing that very same day.

By the way I use this link to keep track of the rates:

http://origin.bankrate.com/wsj/graphs/graph_trend.asp?product=1&prodtype=M&ad=mtg

Once I get to refinance my main house then I will do whatever it takes to sell that other house. Either a Short Sale or a loan restructure. The way I see it, my option arm payment will eventually go up and I will have to miss some payments. When that happens I will be elligible for a loan restructure and the bank will have to right off some of lost equity or principal. Or I will Short Sale this house for a 100 K loss.

As for paying of all my other Debts in 7 years. That remains to be seen. The idea behind that program is simple. Get rid of or reduce payments one at I time. The less bills you have the more you can send to the principal and the faster you can get completly out of debt. I am not sure if I can do it in 7 years, but I will try.

What do your think is better for your credit? a Loan restructure or a Short Sale?

Please post your comments below.

I am sure I am not the only one who is asking this question. Should I give my failed investment property back to the bank? I have 2 houses: One that I live in and the other one that I bought from a greedy Home Builder as an investment. This builder must have made killer profits. They even invented an extra tax call CDD.

This is for the Waterstone Community in Homestead. I have to pay an extra $1500 a year for this tax.  This is the South Dade Venture Community Development District (CDD) I think this tax should be illegal. If anybody knows a way that I can out of paying this tax. I will pay you money! Please let me know.

Well here is my situation I am loosing about $200 a month on negative equity. Also I do not see the prices in the area rising for at least 2 or 3 more years. I also have to pay over $6000 taxes a year. Part of this is the CDD tax.  I payed over 300 K for this house and it is not even worth 240 at present. So I lost over $70,000 already.

I am expecting about $5000 Federal tax refund this year. Instead of enjoying this money with my family. I will have to use this to pay my tax bill prior to April 1st 2008. I have a wife and 2 young children. They are the ones who have to suffer. We have to live like poor people. Sometimes we do not even have money to buy extra food or gas or even to eat out. But in reality I make a decent income, but it is jsut not enough thanks to this failed investment. I also have a high FICO credit score close to a 780. But is it worth it? 

Now I am trying to convince my wife to just stop paying the mortgage for this House. She thinks it is unethical and that it will ruin our credit for a long time.

We still have our primary home and it has a lot of equity. We can quickly refinance that one and lock in a low 30 year fixed rate of 5.9 percent, so this way any future credit score status will not be able to affect us. Or can it? I really need to know.  I also enjoy cheap auto insurance and a zero percent credit card, due to my excellent credit. But I am willing to sacrifise that if I can know that my credit will be restored in about 2 or 3 years. Is that the time frame for a foreclosure? I don’t think my bills will go up over $200 a month or will they?

Also consider that this is my second home? Won’t my good payment history on my primary home and all of my other bills, out shadow this?

I really need to know. And if nobody can answer these questions. Please just post the name of another blog or forum that can help me. I need to know this before I waste my money on that stupid tax bill.

Thanks in advance.

Please post your comments below.

What you can do about it? Well for starters, look at history. The last time we had a Real Estate Crash in Florida it was about 1920. Well it took over 10 years to clear the dust. The same thing happened in Japan several years ago and it took over 12 years to recover. The current Bubble burst in the Summer of 2006. So we are not going to see the bottom until late 2009.

So what does that mean? If you own a home and want to sell it, you have to offer it for a lower price than the competition. I am in the same boat. I bought a house in Homestead Florida Pre-construction and I closed in the Summer of 2006. What a big mistake.

I would have been much better off walking away that day. They would have kept my 30,000 deposit which I lost anyway. Well that is unless I am willing to keep this house for at least another 6 or 7 years! And then I payed over 20,000 closing costs and now the property went down even further and I will have to short sell it for $30,000 less than I owe the bank. So if you are interested in paying $250 K for a house that cost me over $325 K, you can have it. The builder won and I admit it.

The same thing goes for you if you are about to close on any type of Pre-construction property, house, condo etc. Go to another Realtor and pretend that you want to buy the exact same type of unit. If you can find one for a price that is less than your price that your contract says. Well that forget about your deposit. It is lost, unless you have 6 or 7 years time to wait for the Real Estate Market to pick up again. I mean some Miracles do happen, but don’t let that builder or Realtor leave you to believe that the Market will be back on track next year.

I say no way my friend. It just aint happening anytime soon. Not until 2010 or so.