Since I was a kid growing up on Keesler AFB in Biloxi, MS, I have been enamored with the A-10 Thunderbolt. I used to watch those guys fly over my school and neighborhood and imagine what it would be like to fly in one. Since then I have had the chance to see them up close and, thanks to my dad, "fly" in a training simulator. Since it is a single seat aircraft and I am not an Air Force pilot, the chances of me actually flying in one are pretty slim.
But, I digress. I really do not want one of those magnificent birds to crash, I just want one of the pilots to "accidentally" drop a five hundred pound concrete "bomb" onto my house in Tucson. Yes, that would be the house on Bellatrix, the one in which I do not currently reside. I do have renters in it and I wish them no harm, but it would be very convenient if one of the practice 500 pound bombs was to land on the house (while unoccupied) and demolish it.
As convenient as that would be, I know it won't happen. And since I have blogged about it, if it does happen I will be investigated for fraud. So I just want to make it clear that, other than praying for it to happen, I am not making any other arrangements for it to happen.
Besides, I have a much better plan. I draw some inspiration for this plan from the experience that my buddy, Sean, had with the place he was renting while he lived in Tucson. About a month before his lease was up, he found a foreclosure notice posted on the garage of his house. He contacted his landlord and found out that she was indeed in foreclosure. So this means that all the time that she was collecting rent from Sean she was not making any payments on the property to her mortgage company.
And now I unveil my "$20,000 in 6 Months" plan. If I were to stop making payments on the mortgage for my Bellatrix house I figure I would have about six months before I would need my renters out of the house so the bank could take possession of the house. In that six months I would not pay my mortgage payments which would save my X dollars per month. And as we all know, a penny saved is a penny earned. But unfortunately X does not equal a penny or I would not have these problems.
So now for the next 6 months I save X dollars per month but I still collect my rent payment of Y dollars per month. So now I am making/saving X+Y dollars per month as long as I can keep the bank from forcing me (my renters) out of the house. And since I will be defaulting on one real estate loan, I might as well take full advantage and stop making payments on my dream crushed five acres in Benson which will save me another Z dollars per month. That would also allow me to do a little stick-it-you to Flagstar bank. Have I mentioned that I hate, yes HATE, Flagstar bank. May maggots consume its flesh while it is still alive! Did I say that out loud?
And where will we stand in 6 months if I can convince Lesley to follow me on yet another adventure? We will have roughly an extra $20,000 in our pocket, be debt free, and able to decide where we want to live instead of moving back into a place out of necessity. Sounds pretty good to me. I know my credit will take a hit, but who cares? I have excellent credit right now what did it do for me? Absolutely nothing. Besides, I figure, in this economic climate, that soon there will be so many foreclosed aliens that the banking industry/American government will have no other option than to grant credit amnesty to the countless masses and wipe the slate clean. Why not take full advantage of our government's idiotic decisions?
One last note on honesty. This little tid bit was given to me by my coworker, Bill. Is foreclosure dishonest? When I signed my mortgage with the bank on the Bellatrix house, the deal was that I would pay them back the amount borrowed plus interest. If I failed to do so, they would take possession of my house. They agreed that repayment was option A and taking my house in lieu of repayment was option B. Now that I do not want my house (and neither does anyone else for the amount of money that I owe on it) why can't I just give them back my house? This is not dishonest because they agreed to it as a part of the mortgage agreement. I would merely be exercising option B.
Please feel free to let me know what you think of my plan in the comments section. Also, if you have any ideas on how to improve this plan, I am all ears.
6 comments:
That bad, eh? I feel for you guys... I'd talk to a lawyer before I went too far down the "walk-away" route, the danger of turning your back is you sometimes get shot in it. Any lawyers in the family? =)
Haaa! Any good story has its low point and 2009 has provided that (well Pima County, Flagstar Bank and just bad timing). This is the first I have heard of option B, I likey. So we can go anywhere now, where to? I like Arizona put Pima County has litterally taken our money for services not rendered. Now that we are rich the sky is the limit!
Here is another tidbit of info for you. There is a renters protection law that went into affect this year that allows renters to remain in the house after the home has been foreclosed on for the duration of the lease agreement. However, if the house is purchased by someone as a primary residence, the renter than has 90 days to leave whereas if the home is purchased by an investor, the investor must honor the lease agreement.
Oh and with $20,000 you could buy a mansion up here for less than what we paid for our house. :)
I'm still working on scheduling that A10 accidental drop for you.
My landlord was collecting rent on multiple rental properties and paying off their primary residence in her fiancee's name. I wondered why they weren't married and had a 1 yr old. (call me old-fashioned). So I assume she walked away from her rental properties with a credit hit, but their main place was intact so no fear of going homeless. Scammers. Sean
I had the following email conversation with a couple buddies in reference to this post:
Mark says:
Benj,
I saw your blog....great idea and this might help "save" more.......
After the initial 6 months of faulting on your Belletrix mortgage
you'd
then qualify for the affordable house program Obama has set up. This
will
allow you to get a lower interest rate even if your in a negative
equity
situation and get back on track with payments to the bank for a couple
months then you can start the payment faulting all over again so
maybe you
could stretch your plan out to 12 months of "savings" ($40k?)
instead of
just only the forecasted 6 months for $20k.
Are you paying rent now?, you can fault on that too for the last 6
months
or until you get tossed out for additional "savings"... (about $46k
savings
total?)
I say:
Mark,
Thanks for the info. I'll keep it in mind.
Mark says:
Consider this....let's say you can stretch out the plan for up to 12 months for a total savings of $46k.
To pocket that amount of money otherwise as an employee you'd have to make about $70k? then get taxed.
Sean says:
All sounds suspect to the high ethical standards I hold you to
Benjamin. I like it...you'll be Catholic soon enough. Welcome, brother.
I say:
Isn't it great how adversity helps unite us!
Mark says:
yup...we're all thinking like executives.....just maximizing in the
best interest for the shareholders.
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