Friday, February 20, 2009

Non-Immigrant visa and the housing bubble

I was browsing Murthy.com forums and came across this unfortunate situation of a laid of H1-b visa holder. Its painful to see the implications of of a temorary visa and iliquid assets backed by debt. The poor laid off employee probably did everything right but still coudn't escape the deathly spiral of foreclosure, layoffs and a temporary visa. Its a reminder for everyone to keep debt levels manageable, regardless of Visa status. If you have a housing loan, make sure you have atleast six months or more of emergency funds. Sometimes life comes at you hard, when you are not looking.
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I got laid off from a Job almost a week ago. I just have 2 months left on my 6 year H-1B expiry.The chances of finding a new job in this market are very slim. I have a home and car in US. It will be extremely difficult for me, if not impossible, to continue with paying mortgage w/o any source of income. What if I have to go back to India in order to avoid being "Out of Status", in the event I am unable to find a new job. Do I need to file for bankruptcy/foreclosure for the home? I can still sell off my car, but to go thorugh the home foreclosure process may take months..I will not have that much time in the event I have to leave the country..What happens in a case like mine? I genuinely want to stay in US and find a job to pay my mortgage, but in the event, I have to leave the country, who eventually is responsible for the home? And what implications it could have on my future visit to US?Prompt reply will be really appreciated.

13 comments:

Anonymous said...

This guy is stupid to buy a house on H-1B. He bought it thinking he would sell it, now he should walk away from it. All that money is gone that he had as equity in the house. Moreover, in India also he is not gonna find any job soon.

Well, decisions like buying a house and investments have to be made carefully and not looking at what other people are doing.

HB

Anonymous said...

For the love of God, I have no idea why people buy homes when they do not have a Green Card.

Vik said...

HB,
It was not uncommon for guys on H-1b to buy houses during the boom. I know several friends who did that but almost everyone got a green card then. In early 2007 I rememeber an realtor friend of mine in the bay area suggest to me that buying houses on H1-b was the way to move up the housing chain. Everything looked rosy for these folks, except the weakest link, the temporary visa.
Given the crackdown of the Feds on the H1-b bodyshops, I expect to see hundreds more of these cases.

Anonymous said...

I have friends who have bought houses on H1b in the last 2-2.5 years and all of their houses are down by @20%. Thankfully, they still have their jobs. It's scary, for them because any loss of job pushes them to a situation where they might have to leave the country immediately.

Sri said...
This comment has been removed by the author.
Anonymous said...

It will be interesting to know the salary and the size of their homes.I'm always surprised by the size of the homes people buy when they are on H1..When will people learn to live within their means.
TMZ

Anonymous said...

Couldn't agree more with TMZ@1:40 PM.
I have been saying the same to all my friends who bought all these grandiose homes paying close to half a million $. Even if I have GC, I wouldn't buy that. All I need are 2 bedrooms and little space for family.
I just don't get it. I think lot of people buy because of the peer pressure.

Shriniwas K said...

in US you can buy a house at 20% down payment. In Arizona I can now buy a house for 120000 US$ to 170000US$ (check websites for prices). By just paying 25000 to 35000 down payment (one year salary savings). The rest is financed at 5-6%.

These are great houses (2-3 BHK 2 bath) with 2 car garage, HVAC, back and front yards and usually 2 - 3 miles from freeway and 12-14 miles from work place, decent school district. If husband and wife are both working, then its a nice bet. Your mortgage payment will come slightly more than the rental payment. (My apartment rent is 900-1100 $ if I buy house it will be 1100 pm for mortgage). So worst case when I sell my house if I am laid off I should be able to get back the down payment I made. (Assume its a rental house) .. So there is no need to fuss! Such sales are called Short sales where I may take a loss of 5-6000 US$ on my return. but get back the money I put on the house.

Anonymous said...

Sriniwas:
Arizona is Ground Zero for the US housing bubble. You should get houses at 80% below the peak value soon.

Hb

Vik said...

The immigration officials are now making house visits to check on the immigration status of existing h1-b holders. No doctor visits in this country, the ICE official only rings once.

Anonymous said...

The immigration officials are now making house visits to check on the immigration status ..

Vik:
where did you hear that? any links?

Anonymous said...

murthy.com has some discussions on that. Immigrationvoice.com too has some discussions

Desi Guy said...

Hi guys

I see a real bad situation in one of our fellow citizens in genuine trouble asking for advice - And we stand with our hands on our hip and start moralizing and I could not believe it - we are even abusive.


Let us not shed croc tears that that Indian guys live beyond their means while in H1. I dont know what you guys are smoking. I am in IT and live with H1s all the time for the past 10 years or so; Many H1s try to carry more commitments back in India taking care of their parents/ummarried sisters than sloshing in unashamed extravaganza. If anything I see in majority of H1 is miserliness and not the other way round.

I think many of us here have evolved out of H1 and are totally out of sync. We have no constructive solution to offer either . So the best we could do was to shut up and leave the forum to those with better ideas or at least leave it to normal human beings.