2010-08-10bloomberg.com

Harvey Collier, a mortgage broker in Fort Lauderdale, Florida, says he gets as many as 10 calls a month from people planning to default on their loans. The twist: They first want financing to buy another home.

Real estate professionals call it “buy and bail,” acquiring a new house before the buyer’s credit rating is ruined by walking away from the old one because it’s “underwater,” or worth less than the mortgage. It’s an attempt to escape payments on a home whose value may never recover while securing a new property, often at a lower price with a more affordable loan.


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Comments:

mortgagemess at 08:17 2010-08-10 said:
This is nothing new..however, for those buying homes for other family members to live in...REMEMBER...on the mortgage app it asks if you the applicant are going to occupy the property...later on if things go sour YOU may face mortgage fraud.... Permalink

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