[Pfish]

$this->bbcode_second_pass_quote('dbarberic', 'H')ow were negative equity situations handled in the 80’s when the housing bubble popped and many did the same thing when the owners realized that they owned more on the house than what it was worth and left their house keys on the kitchen counter, walked out the front door, and never returned letting the bank take possession of the house? Were these people prosecuted? Were they considered fraudsters for doing this?

[bruin]

There's another flaw here: inflation.

After you cash out, where do you put the money while you wait? If it's in your mattress, inflation is going to wipe out its value in no time, especially as PO takes hold. If you invest it somewhere, waiting to scoop up another house, after TSHTF, you'll probably lose the investment anyways.

So if you believe the economy is going to tank, it's a very hard game to win. The only real winners, are the ones who find the investments that hold their value through the turmoil.

[ab0di]

$this->bbcode_second_pass_quote('Pfish', '')$this->bbcode_second_pass_quote('dbarberic', 'H')ow were negative equity situations handled in the 80’s when the housing bubble popped and many did the same thing when the owners realized that they owned more on the house than what it was worth and left their house keys on the kitchen counter, walked out the front door, and never returned letting the bank take possession of the house? Were these people prosecuted? Were they considered fraudsters for doing this?

[SinisterBlueCat]

$this->bbcode_second_pass_quote('dbarberic', 'H')ow were negative equity situations handled in the 80’s when the housing bubble popped and many did the same thing when the owners realized that they owned more on the house than what it was worth and left their house keys on the kitchen counter, walked out the front door, and never returned letting the bank take possession of the house? Were these people prosecuted? Were they considered fraudsters for doing this?

[rogerhb]

It shows you how silly things have become when people worry about this mystic thing called a "credit rating". If you don't live on credit you don't need one.

Years ago in the UK, Hire-Purchase was called "the never never" and it was something that only "poor people" did.

[Doly]

$this->bbcode_second_pass_quote('rogerhb', 'I')t shows you how silly things have become when people worry about this mystic thing called a "credit rating". If you don't live on credit you don't need one.

[peaker_2005]

$this->bbcode_second_pass_quote('Doly', '')$this->bbcode_second_pass_quote('rogerhb', 'I')t shows you how silly things have become when people worry about this mystic thing called a "credit rating". If you don't live on credit you don't need one.

[Ludi]

If you don't want the house, sell it now and use the money to get what you want/need. Don't try to default, this isn't going to work. As others say, during tough times there will be plenty of lawyers, etc going after debtors, possibly with even more vigor than they do now. Debtors' prison, here we come!

[peaker_2005]

Yeah. Personally, I would avoid Equity Lines of Credit like the plague... I haven't used them (what with being 20 and all, I haven't even rented yet!) but I suspect they have ridiculous fees anyway.

If you can, sell the house, and invest the cash somewhere of use (personally, I'd recommend investing in things useful Post Peak, but that's me.

[spear]

I think my post was mis interpreted.Thats what I meant was sell the house and buy a cheaper one now that suits your needs,and save the headaches.
But plan A does have a kind of SHTF flair to it

[Ghog]

If houses are flooding the market, your $273k home is no longer worth $273k....hence you do not have $99k in equity from your house. Another thing to consider, when homes are being foreclosed on en'mass, banks may change their lending criteria. Where you now can get 125% of your homes' worth, they may go back to lending 80% of its current value leaving you with little or no equity. As times get progressively worse, lending institutions will want to reduce their risk.

Better to just sell it now while your home has that value and use the equity to purchase something that you could pay off if TSHTF.

[jenko]

If the market where you live is holding up -- i.e., you can get a price equal to or greater than the outstanding mortgage plus the equity loan --why don't you just sell it now? Rent for a while if you have to.
I just sold mine, at what could be the top, more-or-less, of the market here (northeast USA). Some advice: bite the bullet and hire a broker: we did "for sale by owner" and it took us months to sell, very stressfull (I'm a pretty severe doomer, so each passing week meant more yellow stains in my undies ). Now we've got a decent chunk in the bank (or will, we close next week), and all the bills paid off. Ahhhhhhhhh, it's a nice feeling.

[ChumpusRex]

A word of warning.

If you have debts secured on a house, and the bank reposesses your home, then they will give you in cash any equity that you have remaining in it (after they've taken hefty foreclosure fees, etc.)

If, however, the value of the house is less than the mortgage and other debts secured on it (i.e. negative equity, upside-down, whatever you want to call it) then the lenders can, and will, persue you for the difference.

You may not be able to pay the difference, and the bank will write off the debt. But, if you have any other assets, they will find out, and they will sue you to make sure they get their cash back.

When this happened in the UK, many people were forced to declare bankruptcy in addition to losing their homes. Even several years on, many others are still paying off mortgage reposession shortfall debts, with nothing to show for them.

[JBinKC]

Before you make some hasty decisions you have to ask yourself alot of questions like income and any potential income growth, job security in your line of work and I would find out the potential bankrupcy laws in your state like the amount of home equity you can keep and tie it into the new rules that take effect October 17th. One good thing about the new bankrupcy law is you can keep 1 million sheltered in a retirement account to include a Roth IRA which were in the past fair game for the taking in most states.

If you are thinking of the worst I think the best plan for now is to sell your home and downsize into a house where you can have 100% equity in a low cost of living state with reasonable housing costs like Arkansas, Kansas, Oklahoma where you can keep all of your equity in your house if you declare bankrupcy and overall energy costs will be somewhat lower. With the new bankrupcy law you will have a 40 month rule to overcome though.

[rogerhb]

$this->bbcode_second_pass_quote('Doly', 'I') had my credit rating checked before I could rent a flat. So you still need a credit rating anyway.

[GoIllini]

$this->bbcode_second_pass_quote('Pfish', '')$this->bbcode_second_pass_quote('dbarberic', 'H')ow were negative equity situations handled in the 80’s when the housing bubble popped and many did the same thing when the owners realized that they owned more on the house than what it was worth and left their house keys on the kitchen counter, walked out the front door, and never returned letting the bank take possession of the house? Were these people prosecuted? Were they considered fraudsters for doing this?

[FossilFool]

Assuming the peak was December 2005 {fixed- jato}, what would delay TSHTF like until a few years (minus other external forces)? Would it not be apparent? Like maybe at the end of the year (or fiscal year?), would they look and say ut oh we didn't have economic growth, than it happens? Would it merely be that there is a plateau that that doesn't happen?

[Ayoob]

Nothing. The slide begins. Nobody is going to help you.

[FossilFool]

Yeah, I meant 2005.

I know nobody is going to help me. That wasn't my question.

[gego]

There is a big difference to everyday life in how you view peak.

If you define peak as the day you have produced 1/2 of the total reserves you will ultimately produce, the half way point, then the peak date is not so significant when translated into everyday life. This is how Dreyfus calculated the peak date. Actual production can move higher after peak when defining peak this way.

If you define peak on a percapita basis, then we hit peak years ago, according to Duncan's calculations, but we are still producing an absolute amount of oil that is higher today than when this percapita peak hit. What this means is that someone near the bottom of the distribution curve is now suffering, while those nearer the top keep on trucking, unfettered.

Forget Dreyfus and Duncan; the long term curve may have already rolled over, but shorter term cyclical patterns may allow production to increase for a few more years. The long term curve involves some averaging. If however, we produce more each year for a few years, but the averaged curve has rolled over, then there will be a sharp drop to bring us back to or below the long term curve, so when things really break, they will break even more sharply. This is what I expect, because extreme measures are being taken to prevent production declines now, which must be paid for later (lots of water and steam injected now to artificially hold up production).

Forget about trying to be precise with imprecise data in this imprecise world. The big picture is that we are in the area of the peak of humanity's use of energy. We are in the area of the peak in human population supported only by this energy. We are on the precipice of the greatest collapse in human population ever experienced. Does it really matter if we fall off the cliff today or five years from today? I think not.

It is comical to watch all the wishes for something different. Even George Bush must finally have been confronted by the nature of the problem, as you can see him struggling with denial. According to him we are on the verge of major technological breakthroughs to save us. This is typical denial thinking. Look through the threads on this site and see how many times people have posted wishful ideas about how this or that will bail us out. I would venture to say that this site is full of denial and wishful deluded thinking.

TSHTF soon enough, so unless you are into the excitement produced by danger, enjoy what little time you can. Take a final trip to Disney World, have a few affairs, read a few more good books, live it up to the extent that does not impede your survival plan.