Coffeehouse for desis
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How does this work?

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Post by Hellsangel Fri Mar 23, 2012 12:17 pm

if they can't pay the mortgage, how can they pay the rent?

http://money.cnn.com/2012/03/23/real_estate/bofa-mortgages-foreclosures/index.htm?hpt=hp_t3
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Post by indophile Fri Mar 23, 2012 12:22 pm

Probably they are thinking - with renting they pay only PI (principal and interest), and no TI (taxes and insurance), and of course no PMI (private mortgage insurance they pay if their original down payment on the loan had been less than 20%). The big assumption here is that the rent doesn't exceed the PI, a reasonable assumption given today's real estate market.

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Post by Marathadi-Saamiyaar Fri Mar 23, 2012 12:46 pm

They come out looking good as though helping the unfortunate.

Yet another Yem Bee As trickery.

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Post by indophile Fri Mar 23, 2012 12:54 pm

May be their offer is genuine. That is because most real estate investments result in negative cash flow for the investor. The investor only bets on appreciation of the property value over time, and that the appreciation more than neutralizes the negative cash flow (Rent-(PITI+maint+opportunity cost)) over years.

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