TFT: Buy and Bail?

The other day I stumbled across a blog (I honestly don’t even remember how I got there… one of those “click on a blog and then a blog on their blog and then a blog on that blog) that was talking about their plans to “Buy and Bail” on their house. I wasn’t sure what this meant so of course I googled it. Turns out its a recent trend…. people are buying a house (either together if they qualify or in one spouses name ) and then bailing on their current home that is upside down in this market.

Now… I know a LOT of people with their homes on the market. I actually think most of my friends have their houses for sale and I know a number of bloggers who do as well. The market sucks. I feel for them because a decent sale price is not exactly promising. I thank God everyday that we took the offer we got on our old house and sold when we did. Sure, we lost quite a bit of money, had to pay at closing, but I wouldn’t trade our new house for anything.

But…. what if we hadn’t sold. What if we’d thought we’d hold off for a better offer. What if we were still in our 900sq foot home with 2 kids and 2 dogs? Would I consider this new trend? Ruining one or both of our credit just to get out from under a house we’d outgrown?

I guess in some situations it might make sense… such as if someone is losing their house because they can’t afford the mortgage payment. Or if they are reloacting for a job and are unable to sell the old house. I guess I could possibly see taking the Buy and Bail route. But what I was reading on this blog… they just didn’t like their old house. They owed too much and it wasn’t worth nearly what they owed. So they wanted to buy in on the cheap market and then let their old “unliked” house go back to the bank. Ship their keys back to them.

WHAT? Am I the only one that sees this as nuts? I guess I am not in their shoes and maybe I’d think differently if I didn’t love my home. But I can’t help but thinking that voluntarily foreclosing on your home, ruining your credit voluntarily, is such an irresponsible thing to do. Not to mention all these “voluntary forecloseures” are not helping the market any… in actuality they are HURTING the market. And does it even matter that is is FRAUD?

So, what do you think? Have you heard of this “Buy and Bail” method before this? Would you ever consider it?


  1. And this is just my opinion, but how awful! Why would you ruin your credit and everything else. For what. I REALLY want to sell our home right now, but it never crossed my mind to return it like a sweater from Target. Plus, isn't a roof over our heads, better than none?! Like I said, just my opinion.

  2. I think the buy and bail thing is awful… Yes, people would love to sell their house and move into a better house, newer house, etc., but going about it that way, to me, is a completely irresponsible. To me ruining your credit, committing fraud, and not helping get the market back on its feet is not the right thing to do. Good thoughts Nic!

  3. Well, I've never heard of it and quite frankly I'm pretty appalled! Talk about screwing over your neighbor! Yeah, the market sucks but doing that just makes it worse. Plus, ever heard of accountability? You signed those papers, you are responsible. I'm not even talking about screwing up your own credit because that's a whole other story! Actually, my neighbor down the road bought his house with his business tax id, apparently it wasn't good enough so he foreclosed on that and up and bought the land across the street and built a new house. WHAT? Sorry bud, I don't know you nor do I want to! I have no respect for people like that. What a depressing topic though, seriously, I'd like to kick a few asses! There are people out there who are losing everything they have because THEY CAN NOT AFFORD THEIR HOMES. It's sad regardless of the circumstances and to think people are actually doing this on purpose because of selfish reasons!Ok, off my soapbox now.

  4. I totally agree with the other comments – absolutely ridiculous!! Our neighbor did this and the bank ended up selling the house for a very low amount – making the value of our house go down! Responsibility – these people who are buying and bailing need to find some!

  5. I know 3 couples who are doing this. Working at a bank– in defaulted loans- this is common and my first thought is the same– FRAUD! I couldn't live with myself if I did it.

  6. What a great post! It is an awful thing that these people are doing. Which is obviously why we didn't do it. I have read about people doing this and sure, I joked about it when I walked through my 'dream houses' during this past year and a half. My realtor would ask us if we wanted to put an offer on it, and I made comments about that I would love to get 'this' house but then we would not be able to afford the old house too because we dont have enough for for both mortgages. But Im sure these people are thinking, “Well, once you get the house that you DO want, just let the other one go”. Sure you ruin your credit and cant get another loan for quite some time.. Doesn't matter to them, They now have the house that they want! There have been houses that I have wanted sooo very bad, but I also have a conscious and know that this buy and bail is the wrong way about it. Instead, I wait for ours to sell. Good thing you took your offer when you did! 🙂

  7. wow. this is a great post. i read just a bit of this post and then mentioned it to my dad this evening. i had never heard of anyone doing this, but he started naming off people we knew in town that had done basically this exact thing. flipping UNREAL! and then, when they file bankruptcy – nobody can touch their new home or all their other assests – WTF!?!! even though i KNOW we have outgrown our home, i know we have too much left to do to it to get it ready to sell, so we have to make it work for us. i would NEVER even consider committing this type of fraud and financial suicide just to get a nice new house. great post nicole!

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