Foreclosure and Second Properties

What Does it Mean to Buy and Bail?

ôBuying and bailingö refers to the act of buying a second property and allowing a first home to fall into foreclosure. Homeowners who purchase second properties in this scenario are typically ôupsidedownö on their primary residence, meaning they owe more on their first home than it is worth in the current market. It's likely that they had an adjustable rate mortgage and their monthly mortgage payment grew to a payment they could no longer afford. For some, an easy solution appears to be buying a second property at a depressed price with a fixed rate mortgage in order to lower their monthly mortgage payments. At the same time, they let their first home fall into foreclosure û hence the term buying and bailing.

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