Wow. Myth partially busted. Thanks. California = yes. Florida = no. But more importantly is the Irish experience. Okay. Sold. Australian RE is just as turtled but still won't be primarily forced by the banks.
Maybe not even suck you dry reno, just a strategy to ensure they get back some of what they are owed. The town of Limerick in Ireland was heavily dependent on Dell Computers. When Dell moved it's manufacturing base to Poland, 2000 workers in Limerick were left with no income and loans for life's luxuries that they could not pay back. For every 1 person employed by Dell, up to 4 others were reliant on Dell employees for their income. So what did the finance companies do with all those cars that were paid with borrowed money? Did they repossess them? No, they renegotiated the contracts and let people pay off as little as AU$20 (equiv) per week. Why would you repossess a declining asset when you couldn't recoup the replacement costs? The same will happen with homes.
Maybe we could write a limerick for that ...." there was a man from nantucket who had a girl he could ".....ahh forget it :
The builder working on our house is from Limerick. I asked him about Ireland, his story was the one above about cars, he said Ireland is "rhymes with nantucket", but he also said the irish are used to living in "natucket": "We've been leaving Ireland for the last 200 years looking for work all over the world." So it's nothing new to them. It's all new ground for Kanuks, Aussies and Yanks though - this is what is most unpalatable and unbelievable I suppose for most Australians. Even Kiwis have a history of leaving NZ looking for work.
i have been following one property for a number of weeks now... this is in point cook, mortagee sale... agent auction it off and the guy win it at about $380k. i guess the reserve is not met, and it is back on the market for quite some time now.. price asking still $484500 http://www.barryplant.com.au/pointc...0471&rqst=80F27108-9206-E83D-7B0F474F02B0A32C i wonder with the mortage holder.. does the interest payment stop the day he/she declare bankrupt, and cannot pay any more mortage ? if it is selling less than the original purchase price, does the mortage holder still liable for the difference ?
Once in bankruptcy, the bankruptee has to informed the trustee of all the owners of the debt, the trustee then informs all the debt owners that the debtee is bankrupt. It is up to the trustee to then excercise all powers to recover all monies that is owed. Any outstanding debt is to then be forgiven. However all fines, government debt and the trustees fees are not absolved. So to answer yes the interest should be stopped, however the holder is not liable for the difference. There is a law in the bankruptcy act whereby, if the total debt is greater than $5,000, involuntary bankruptcy can occur.
My take is the bottom will be around 2017. Our goal is to be in a position to act as our own bank from that time on. At the moment we are setting up another business with a cash flow that is sheltered. No employees, no new borrowings and an income stream directed at our entities resulting in a tax rate around 13 cents in the dollar. Just like renovator I will stick with my properties that are not only paying me but also the non cash deductions that my REAL estate generates. The gold bullion will never represent more than 5% of my total assets. Kind Regards non recourse
