Home Calling purrrfect pear....

[Miss Sparkly]

Our loan is without a doubt NON-NEGOTIABLE. None - at all. It is backed by bonds and those bonds can only be paid in full if 1) we pay off the loan 2)the loan is sold to an actual bank or 3)the house is short sold and the PMI company pays the difference. Nothing can be mofied on it.

I read all of PP''s posts and that''s what gets me the most. People seem to be saying that I should somehow look at all options and try to save my house, yet she didn''t have much of that crop up, when it looks like she COULD afford her house.

Why is it okay for somebody, keep in mind a long time pricescoper, to leave their house for "economic sense" and it''s not okay for somebody, keep in mind a newer pricescoper, to leave thier house for, well, economic sense?

 

[Loves Vintage]

SB - I hate to bring up prior threads, but are you really in that bad of a financial position, considering you recently bought a half carat diamond on what appeared to be a whim? Or, do you just want to move?

I have not read PP's thread and am not familiar with it. I am addressing your thread individually, as most likely are.

Also, you glossed over the lease option as a potential solution, on the basis that your mortgage says you cannot lease out your property. I believe that you can actually lease out the property after a specific period of occupancy, but that is beside the point. The point is that your mortgage also says you will pay it on time each month, yet you don't seem to have a problem with walking away from that obligation. You could at least call the bank and see if they will grant you a waiver to lease it out. I am sure the bank would rather get paid, if you were to lease it out, than not.

Another thing is that you did not mention your interest rates increased at all. So, I don't get it. You knew what your monthly mortgage payments would be. The fact that the value of your home declined seems quite irrelevant to me. It's happened to me and everyone else in this country, so something just isn't adding up here. Wait it out and value will eventually increase.

Also, you mentioned that you've both tried to find part-time jobs, but cannot. Since you mentioned in that earlier thread that you find diamond bargains rather easily, perhaps you should try buying one and selling it on eBay for profit. These are hard times. People need to be creative in looking for ways to make extra money. Plenty of people do this today. Have you considered it?

ETA: I'm sorry if you think are you are being treated unfairly because you are not a long time poster. I think a lot of people did post in your support here. For me, I just see a lot of open issues, and I am not sure that you are being honest with yourself about what this move will achieve. I'm really not trying to be mean at all, and hope it doesn't come across that way, but hopefully the posts that you perceive as negative will help you think about your decision more critically. You did mention that you didn't think everything through when you bought the house, and instead relied upon the opinions of others.

 

[Miss Sparkly]

I''ve sold all of my extra stuff and "I" didn''t per say buy the half carat diamond. My dad was visiting and knew that I was having a hard time emotionally with life and wanted to help to cheer me up because he knew that I sold a lot of my favorite pieces.

What I didn''t think about is that gas wouldn''t always be under $2 a gallon, that the cost of food woudn''t double in three years, that our property insurance would slowly raise our payments by $20 here $30 there when house prices are going down. I didn''t think of how our gas bill would nearly double, or that every year our W/S/T bill would increase. I didn''t EVER think that required time off without pay would happen, I''ve never had an issue finding a job and NEVER saw myself being cut to part time. I always thought that I would have no issues getting a second job, and that''s not the case. I sold my beautiful professional flute last year so that we could try to pay for things without drawing on a CC.

We can''t afford to lease our house. The best we could get for rent is around $700.

Thank you to everybody for your help on what to expect. We have found a great Realtor and are so happy to be able to move forward with them

 

[cara]

Sparkly, I did not go back to read PP''s thread for this one, but I think a number of people expressed some level of disapproval for her actions. Certainly many people expressed disapproval or contempt or poor opinion of people that walk away from their mortgages in general. However, key differences between PP''s thread and this one are: 1) she had already made her decision and initiated her walk-away and was asking for no one''s opinion on what she did or should do in the future. She was merely reporting her experience on the thread about the housing market collapse and 2) she stated pretty clearly that she didn''t care how many names people called her or moral lectures they gave her - it was not enough to make her stay and pay off an extra $100,000 or two on her condo and she was going to sleep well at night regardless.

Her reputation on PS did probably work in her favor in this regard as she comes off as secure in herself, opinionated and not especially malleable. So it would make it less likely for people to try to change her mind with moralizing, as they realize its kind of a futile effort.

So... this is a public forum, you chose to share your situation and ask for advice. Now time to take your lumps when people say things you don''t want to hear.

I will repeat something I said on that thread, though, if it helps. The ''bank'' (whomever gave you the loan) also made an investment in that house when they gave you a 0% down loan on it, and their investment has headed south. I don''t think you are obligated to protect them from *their bad business* decision. Certainly part of what the bank was counting on/investing in was you and your DH, and you two are ''letting them down'' (whatever that means to a corporation) but if you are willing to take the hits coming your way to exercise the legal options available to you (of walking away/short-selling), well the bank will also have to take what is coming their way as market-punishment for their unfortunate loan decision. Obviously if the house had held its value, you could sell it or the bank could foreclose and then sell it and the bank wouldn''t lose money, but that''s not the case here.

Many businesses will make decisions from a bottom line perspective rather than a moral one, and I don''t think individual homeowners should be have to play by vastly different rules. Just make sure you have thought through the consequences thoroughly. Good luck-

 

[Hudson_Hawk]

SB, as someone who''s been in your place I want you to know I support you and I wish you the best of luck during this difficult time.

 

[cara]

LV, maybe I should just let SB reply, but it seems she has already reported that she and her husband's situation has changed significantly since they bought the home. They have lost income and their commutes have increased, thus their home value *is* relevant, as if their home had not fallen in value they could sell it, pay off the mortgage, move closer to their new jobs and rent something cheaper. Adjustable mortgage going up is not the only valid 'change' reason for needing to sell a home.

 

[D&T]

Date: 3/26/2010 12:23:02 AM
Author: cara
Sparkly, I'd read PP's thread start to finish if I were you. There are some nuggets of information in there.

OK, first off, at least here in CA as a potential buyer, the word on the street was that houses offered for short sale in which the buyer has PMI would almost never go through, as the bank generally would stand to gain more by foreclosing, collecting PMI, and then reselling. My understanding was they didn't collect a payout from the PMI unless they foreclosed so they would draw out the short sale process as long as possible, eeking more mortgage payments out of the desperate owners, dallying dallying with any offers, but ultimately deny all short sale offers and eventually proceed with foreclosure. IF you are going to pursue a short sale make SURE SURE SURE your real estate agent is experienced in actually closing short sales as they are a whole different ball of wax from regular sales. I'd love for someone more knowledgeable to contradict me on the PMI issue I have it wrong. Also, I *believe* that a short sale will also cause a substantial hit to your credit score. It is not that much better than a foreclosure IIRC.

Second, PPear had done her research about what hit her credit score would take, and was also confident she didn't need a good credit score in the near future *for her situation*. She entirely stopped paying the mortgage a good 6 months or so before they foreclosed on her, living rent free during that time and saving her mortgage payment so that she could offer large cash sums upfront to a future landlord. Cash talks! and she had other savings, so she wasn't worried about where to live or, say, a car emergency that would require her to try to buy a new car on credit. She also is older than you and your DH and gave the impression that she was secure in her job and didn't need to worry about a potential future employer running a credit check.

Last, in that thread, PP emphasized that as the owner she was legally liable for the home until the bank took possession. Which they didn't do immediately when she stopped paying - it took months and months even though she declined all offers for negotiation and loan mods. So I don't think you want to move out until you have legally transferred possession to someone else.

If you are going to consider walking away, make sure you go through everything with a fine tooth comb and consider all the ramifications. Credit score, savings cushion, need for credit for other things (like emergencies, future laid-off periods, rentals, jobs, etc), potential tax hit, recourse the bank might be able to come after you. You just don't want to be surprised by some of those consequences.

Good luck!

I'll comment on the highlighted portion only as this is coming from First Hand experience from my own short sale as a real estate agent myself at the time. I had a PMI my bank took a $60k hit and PMI covered the deficiency. Many financial institutions do not want to hold bad assets on their books, so if they can get rid of it, they will. As for Credit score - yes, I show late payments, however with the motivation my bank had to remove bad assets off of their books, from start to finish of acceptance of a short sale - it took six weeks to close, I show three months of late payment on my credit score, my bank showed it as a loan paid and Closed. No Foreclosure was documented. So to those who review my credit report they will only see that the installment loan was paid off. In some instances, there have been talks that some will get reported as a foreclosure, If you want your credit scores to include a "Loan Paid and Closed" you might want to have something in writing from the bank that agrees to this, You don't know for sure how the bank will report something like this on a short sale with 100% certainty. I hope this somewhat helps from my own personal short sale not only from just a consumer POV but also from someone who has been in the real estate business.

 

[Loves Vintage]

Date: 3/26/2010 11:12:51 AM
Author: cara
LV, maybe I should just let SB reply, but it seems she has already reported that she and her husband''s situation has changed significantly since they bought the home. They have lost income and their commutes have increased, thus their home value *is* relevant, as if their home had not fallen in value they could sell it, pay off the mortgage, move closer to their new jobs and rent something cheaper. Adjustable mortgage going up is not the only valid ''change'' reason for needing to sell a home.

Hey cara, I see what you are saying and acknowledge that my comment re: relevancy of home value was a bit of an overstatement.

SB, Sorry for even bringing up the ring. That was very nice of your father to get you such a lovely gift. I had assumed you purchased it directly, so that assumption was in the back of my mind when posting my earlier post. You know your situation best and should proceed in your interests. I hope that everything works out for the best with your new realtor. Good Luck!

 

[steph72276]

SB, just wanted to wish you and your husband good luck with the short sale. Hoping the process goes smoothly for you guys.

 

[D&T]

Date: 3/26/2010 12:07:31 PM
Author: D&T
I'll comment on the highlighted portion only as this is coming from First Hand experience from my own short sale as a real estate agent myself at the time. I had a PMI my bank took a $60k hit and PMI covered the deficiency. Many financial institutions do not want to hold bad assets on their books, so if they can get rid of it, they will. As for Credit score - yes, I show late payments, however with the motivation my bank had to remove bad assets off of their books, from start to finish of acceptance of a short sale - it took six weeks to close, I show three months of late payment on my credit score, my bank showed it as a loan paid and Closed. No Foreclosure was documented. So to those who review my credit report they will only see that the installment loan was paid off. In some instances, there have been talks that some will get reported as a foreclosure, If you want your credit scores to include a 'Loan Paid and Closed' you might want to have something in writing from the bank that agrees to this, You don't know for sure how the bank will report something like this on a short sale with 100% certainty. I hope this somewhat helps from my own personal short sale not only from just a consumer POV but also from someone who has been in the real estate business.

sorry meant to say 'report' not 'score' in the highlighted area.

Edit: When I said the above highlighted, I don't mean to imply 'full' just a % amount of deficiency

One site I do like to browse through is activerain.com, type in PMI and short sale you'll find that it is a site dedicated to real estate and financial professionals. Only you know what is right for you, we can post all we want about your situation but unless we are in your shoes, we dont know exactly

what you are going through not to mention the heavy emotional strain this is adding. I feel for you, been there done that.

SB- Good luck!

 

[Dancing Fire]

Date: 3/26/2010 9:19:00 AM
Author: Sparkly Blonde
Our loan is without a doubt NON-NEGOTIABLE. None - at all. It is backed by bonds and those bonds can only be paid in full if 1) we pay off the loan 2)the loan is sold to an actual bank or 3)the house is short sold and the PMI company pays the difference. Nothing can be mofied on it.

I read all of PP''s posts and that''s what gets me the most. People seem to be saying that I should somehow look at all options and try to save my house, yet she didn''t have much of that crop up, when it looks like she COULD afford her house.

Why is it okay for somebody, keep in mind a long time pricescoper, to leave their house for ''economic sense'' and it''s not okay for somebody, keep in mind a newer pricescoper, to leave thier house for, well, economic sense?

i was one of the person whom disagree with PP''s decision. why should the taxpayers pick up your tab?

 

[Italiahaircolor]

I just wanted to stop by and share my somewhat similar story...

In late 2009 my husband and I listed our home for sale on a whim. We found another place we liked more and thought unloading our place would be pretty simple.

After 8 weeks on the market we found a buyer. We were thrilled. The buyer haggled our price, but in the end we agreed on a doable price and pushed forward.

Everything came to a blinding halt after the appraisal. We live in a very developed area, homes in our area have been around for awhile and most are owned by "lifers" --not much for sale--so the only true comparable homes we had were foreclosures. At many, many thousands of dollars less than our home, we were lumped in with distress sale places. Our home appraised for 100k less than what we had agreed to sell it for.

Our situations are similar in that our home is valued at less than what we would want to sell it for. We'd break even (including our renovations) selling it for the appraised price, so we're not upside down **yet**...but we'd be bringing about 75k to the table to cover closing cost. That was a very scary figure for us...we're a young couple who would prefer to put cash into a new place instead of buying ourselves out of our current home.

For us we never considered walking away from the home and letting the bank sort it out. We're not in a distress situation, so leaving really would be just because we wanted too.

I understand your disappointment and your frustration. Believe me, I remember standing in the doorway of my bedroom crying hysterically telling my husband that we were trapped. But you need to remember your long term financial health when making this decision. Although carrying a credit card balance isn't the best thing, the ramifications of doing so are less then a foreclosure.

I would encourage you to explore refinancing your rate, short sale or other options before walking away. With being a FTHB, it is true that you cannot rent when you've opted to 100% finance--however, if you purchase another property for your primary residence, you can rent your first home with approval. A lot people don't use their credit score, but if you do, you need to really consider and find out what the recover process is.

I wish you the best...you're absolutely not the only one in this position, and just need to decide what's best for you, not just in the here and now, but forever.

 

[Miss Sparkly]

Date: 3/31/2010 3:45:53 AM
Author: Dancing Fire

Date: 3/26/2010 9:19:00 AM
Author: Sparkly Blonde
Our loan is without a doubt NON-NEGOTIABLE. None - at all. It is backed by bonds and those bonds can only be paid in full if 1) we pay off the loan 2)the loan is sold to an actual bank or 3)the house is short sold and the PMI company pays the difference. Nothing can be mofied on it.

I read all of PP's posts and that's what gets me the most. People seem to be saying that I should somehow look at all options and try to save my house, yet she didn't have much of that crop up, when it looks like she COULD afford her house.

Why is it okay for somebody, keep in mind a long time pricescoper, to leave their house for 'economic sense' and it's not okay for somebody, keep in mind a newer pricescoper, to leave thier house for, well, economic sense?

i was one of the person whom disagree with PP's decision. why should the taxpayers pick up your tab?

I do have to LOL a bit at this - taxpayers shouldn't have to pick up my tab, however, if taxpayers paid their taxes like they should DH wouldn't have have to take time off without pay.....

Anyway, sorry if my next blurbs don't make much sense - I've been living off lack of sleep, ramen noodles (salt - I love salt too much), zingers and coke

The house has been on the market for four whole days and the traffic isn't too bad. We found a wonderful rental 1.5 miles away from our work, MUCH lower rental payment and we move in mid may. It's in a beautiful historic part of town and our landlords will only be a few blocks away

We really like them and hit it off right away. I didn't realize how much stuff we don't have. I bought the UHaul moving kit with 10 small boxes and 10 medium boxes and we have three medium boxes left over! I did end up with another sparkly from all this - my best friend from childhood gave me a Jared gift card as a thank you for helping her move here, get her wedding stuff together and showing her around. She used to work for Kay's - we have fun fighting over what is "good" as far as jewelry.

I am also working on selling my car - with us living so close we can now use the bus system or bike to work when it is nice outside.

One thing we did was apply to a couple of the larger property management companies as our good credit files would stay active for 90 to 120 days and give us time to find a place to live. Thankfully, we were able to find the small house for the same price as an apartment

which gives our dog babies a yard to run in.

Not much else has happened as we're still 15 days away from missing a payment....

ETA: something else has happened...DH has to take 20 hours off without pay before June, then between June and August another 40 hrs no pay and after that the budget will be reexamined to determine if more furloughs will be required. Thankfully they're not letting people go and DH is the top in his department and second as far as seniority