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The Death of Common Sense

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Anonymous
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The Death of Common Sense

I truly think big business & FICO have killed Common Sense altogether.  Big Business can screw up, go bankrupt, only to be bailed out or given a kiss on the cheek to come right back.  Main Street on the other hand...............We've had our house up for sale for 26 months, trying to save our credit.  Seems as though a short sale is the only way to sell it. Market's dropped so far down.  We have a high FICO score, always paid on time.

 

But when we do a Short Sale, no lenders will lend us $$ -- I've already contacted several.  So, they don't take into account THE ONLY REASON we're doing a short sale, is becuz the market has dropped SO MUCH -- something WE have no control over, but suffer from it anyway.  Personally, I think perhaps Wall Street has known this would happen and didn't care, didn't care to avoid it.

Message 1 of 9
8 REPLIES 8
tcbofade
Super Contributor

Re: The Death of Common Sense

If you have to do a short sale, why are you trying to sell it?

 

I'm confused...

02/01/24 Fico 8: EX 757, EQ 803, TU 783.
Fico 9: EX 760 12/16/23, EQ 790 02/04/24, TU No idea.

Zero percent financing is where the devil lives...
Message 2 of 9
drkaje
Senior Contributor

Re: The Death of Common Sense

Homeowners got thrown under the bus during the housing boom.

 

IMO; we have to kill (and bury dead) the old notion of one's home as an investment. That being said, I don't know what basis people will make buying decisions on after accepting the market's volatility.


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Message 3 of 9
cashnocredit
Valued Contributor

Re: The Death of Common Sense

I've bought 3 homes during my lifetime. Two of the three increased in value and I am living in the last one. It has decreased in value even though I bought it in 2003. When I bought them it wasn't for investment purposes and I committed to either pay off the mortgage when I moved whether they were underwater or not. The IRS already gives you a break on imputed income from a short sale. The notion one can short sale a house without any adverse effect, especially on credit, seems to me to not be common sense.

I have reestablished credit over the last couple years
so my moniker is, well, rather out of date.

WM Discover $1800, WF Plat 12k, Chase Freedom Siggy18k, Amex Plat (60k H/B), Citi AA EWMC 25k
Message 4 of 9
marty56
Super Contributor

Re: The Death of Common Sense


@cashnocredit wrote:
The notion one can short sale a house without any adverse effect, especially on credit, seems to me to not be common sense.

Me too.

 

Everyone needs a place to live and having a home that is PIF, regardless of wether it is worth less then when you first purchased it, should be on anyone's short list of financial goals.   If you purchased at home that you really couldn't afford, the fault is your street, not Wall street or FICO street.  Homes as an investment always have risk and the people I know who flip homes tend to do that sooner then later. 
 

1/25/2021: FICO 850 EQ 848 TU 847 EX
Message 5 of 9
thankfulheart
Established Contributor

Re: The Death of Common Sense


@drkaje wrote:

 

IMO; we have to kill (and bury dead) the old notion of one's home as an investment. That being said, I don't know what basis people will make buying decisions on after accepting the market's volatility.


In my mind, a home has NEVER been an "investment", but a place to hang my hat at the end of the day; that is common sense to me.  My buying decision for my current home = rent > house payment.  Pretty simple equation. I have not been able to understand the sudden need to sell a home simply because one is "underwater" in it.  You agreed to the payment, signed the contract, it's done.  If you choose to reneg on the contract (for whatever reason), then yes, there will be consequences. I would tend to be more understanding if there was an involuntary job loss and in that case, I believe that banks should be able to work out a refinance of the CURRENT AMOUNT DUE (not a new appraisal) with a lower interest rate to help income-damaged people stay in their homes. 

Starting Score: 10/1/2011 EQ 568 TU 593
Current Score: EQ 664 TU 700 EX 701 (FAKO)

Message 6 of 9
Obt3wKLq5t
New Contributor

Re: The Death of Common Sense

When a business go bankrupt, they don't just get a kiss in the cheek and come back without any consequences.  The stockholders usually lose everything while the bondholders lose part of their principal.

 

As others have said, buying a home if your choice, if it is underwater, that doesn't give you a ticket to get out without any consequences.

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Message 7 of 9
drkaje
Senior Contributor

Re: The Death of Common Sense

A guy from work left FL and let his house go. Pretty much said the mortgage was affordable but paying made no sense because there was no way to get his money back. He just didn't see a home as something long term. Smiley Happy


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Goal Score: 776 FICO


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Message 8 of 9
cashnocredit
Valued Contributor

Re: The Death of Common Sense


@drkaje wrote:

A guy from work left FL and let his house go. Pretty much said the mortgage was affordable but paying made no sense because there was no way to get his money back. He just didn't see a home as something long term. Smiley Happy



It's called strategic default. FICO has a score for that too.  One of the attributes of a "high" strategic default risk score is that you currently have good credit, much like the OP.


I have reestablished credit over the last couple years
so my moniker is, well, rather out of date.

WM Discover $1800, WF Plat 12k, Chase Freedom Siggy18k, Amex Plat (60k H/B), Citi AA EWMC 25k
Message 9 of 9
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