Hey Everyone,
Pleae be kind.. don't rip into me.. I've had enough of that here on these threads. I will tell my story briefly for those who don't know it already and offer and udpate...
2005 bought a small starter home on LI that needed fixing up. Self employed, no open lines of credit ( I paid off my credit mistakes from my early 20's and swore off cards). Decided it was time to buy a home after moving from rental to rental on LI and was ready to have my first child.
Was told by mortgage broker that while my score was not bad,it wasn't good enough to qualify for a FIXED interest rate mortgage and was offered and Alt-A 2 year fixed ARM. Was advised that if I pay my mortgage on time, open a line of credit or two my score will pull up significantly and I could refi before it resets into a fixed interest rate. Figured that with the equity built in from th downpayment AND the improvements we would make to the house (needed new bathrooms,kitchen..etc) that we would be fine, even if the markte stayed at it's current level (never imagined a sharp dip).
Well..as you all know things started unfolding in 2006 just around the time I was looking to refi. While my score was improved by my mortgage payments made ON TIME at a 6.95% fixed interest (with escrow my payments were approx $3300/month) the equity in my home dissappeared. I suddenly found myself at 100% LTV and being self employed even with a good score i no longer qualified for a fixed mortgage..heck even another ARM was slim with a low LTV and the market in a decline. So. .I was locked out.
Started calling in Sept to BEG the current mortgage company to keep the rate fixed at 6.95% . AFter months of back and forth they refused..so I stopped paying at the first adjustment but never gave up on getting them to fix it. We realized they wouldn't budge and we decided short sell was our only option.
Now.. we did get a little over our heads because while we were fixing up te house we did fall behind on income taxes (as happens with alot of self employed individuals.. guilty of that!) plus some stuff from my husbands pre marriage taxes that caught up to him (hey.. men are terrible withthose things!!) So there was now a tax lien on the property..ouch!
But.. put it on the market. It appraised for $120K less than what it was appraised for whenwe got our mortgage. We lowered the price and we started showing it like mad. Got 3 offers.. all went to full appraisal price and WELL over the minimum that the bank would have accepted (they usually accept no less than 90% of the appraised value).
met with a roadblock when we submitted the offer with the HUD that included a lien payoff. They came back said they woudln't do it. To that I answered .. well as I see it ,I do not have time nor the money to remove that lien so we'll loose our buyer, we'll loose the sale and go to foreclosure and you will get ALOT less for the house than you have now.. which even with the lien is well above the minimum (as my lien isnt' even half of the difference between what they got and what they would hav eaccepted as a minimum). At this poitn I had nothing toloose. The credit I built was gone, the home was pretty much going to be lost to me.. NOT TO MENTION.. the 80K in repairs and renovations we'd done since buying it. I was looinsg my home and $100K out of my pocket when all was said and done. Itold them at this piont only they had more to loose than I did.
So offers were submitted (in the meantime a third offer came in..). Took awhile but today the bank accepted the offer with the lien payoff worked into the HUD.
Thank GOD that the bank saw the light of day and saw that foreclosing would only hurt them and everyone involved.
Ii'm happy that I was able to get out from under this as best as possible for ALL involved..the bank AND myself.. AND someone else, who really loves the home and wanted it so badly (because we really did a nice job) gets to enjoy it.
I will then work on repairing my credit, rent for awhile and hopefully will purchase with many lessons having been learned from this experience. Hopefully the next house I purchase I will be able to put down more cash and maybe even find something owner financed..so I don't have to deal with banks, large fees etc. it's apossibility with the house we're renting, I think.. should we like it.
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