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Thread summary:

Mortgages: real estate, market, affordable, financial advisers, foreclosure.

 
 
Old 09-17-2008, 03:53 PM
 
Location: 27609
525 posts, read 1,114,484 times
Reputation: 541

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I hear you, and I feel for you....I, too, am tired of hearing about how everyone who bought an overvalued home was selfish and/or irresponsible. I bought a home last year in April (at the end of the "bubble" where I am - things didn't die down here until just this year). The home was (is) totally affordable, and my husband and I both had stable employment. The company where he works, however, after being open for 30 years, unexpectedly announced that they are closing at the end of the year, so he is looking for a new job, but there is little work to be had right now in his field. I work remotely, so I do worry that I may be one of the first to go if my company announced layoffs which, today, is a FAR greater threat than it was last year when we bought the house.

My husband has a fantastic opportunity in another town to help run a family business, but we can't sell the house without losing our (large) down payment, and we are unwilling to take on the risk of renting it out in this type of uncertain market. We may have to, in the end, but right now it seems safer to stay put.

We are certainly on very shaky ground, however, and it's just getting REALLY old to hear how irresponsible people were when things were SO totally different a year ago - people who bought homes that were TOTALLY affordable 1-2 years ago may be in bad shape now along with those who really did buy more than they could afford, and it's not fair to lump everyone who is in trouble as being selfish.....
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Old 09-17-2008, 04:19 PM
 
Location: in the good ol' South
865 posts, read 2,067,274 times
Reputation: 870
Quote:
Originally Posted by JerseyGirlinFL View Post
My story is NOT that of the commonly believed scenario of a greedy homeowner who, through creative financing, purchased much more house than could be afforded. On the contrary.

During the real estate hot market frenzy, I bought a house to relocate from one area of Florida to another. I listened to the advice of the builder, "when the drywall goes on in the new house, put your current house on the market." There was no reason to think I'd have any trouble selling my house as it is beautiful, and resales at the time were flying off the market within days of being listed. But (I'm sure you've guessed it) I missed the market, began "chasing" it, and my house never sold.

I've beat myself up for not selling sooner, or for not dropping the price quickly enough. But I had no way of knowing what was going on with the mortgage companies and the banks. I have been through normal ups and downs of the real estate market in my life, but never, ever have I seen nor could have imagined anything like this current market. Never.

For over 2 years, I took a very proactive role in trying to sell my house. I listed both houses out of desperation. I spent countless hours researching, listing, calling, and seeking adviced of attorneys, real estate professionals, financial advisers, auction companies, and anyone else I could find including the "buy your home for cash" companies. Yes, I dropped the price to rock bottom. I eventually considered renting but by then it was too little, too late.

My credit is excellent and has been so all of my life. I am a very responsible person who always tries to do the right thing. Now, after over two years of owning two homes, paying two mortgages, (NOTE: each of these mortgages has a great rate, and both are 30 year FIXED. Each mortgage alone is very affordable to me.) and paying two sets of expenses, including taxes, insurance, utilities, maintenance, and HOA's, I have had it. I have depleted my savings and am living month to month just barely making it. The stress has been enormous. My bank has refused to talk to me about this because my payments are all current.

So, I am about to sell short, or if that fails, to walk away. Yes I will be destroying my own credit, but I have no choice anymore. To continue this way will be an even worse financial disaster.

So you see, not all of us are irresponsible, greedy consumers. I was just minding my own business trying to buy and sell, when the playing field was suddenly changed and all of the customers were driven away. Now, the same banks who made a ton of money during the hot market are dumping their bank-owned properties for sale in my neighborhood at unbelievably low prices. I just can't compete with that, and I am not wealthy enough to ride it out as the cost of living continues to rise.
No, greed obviously isn't a factor. But unwise business decisions are, which would be having 2 mortgages at once, if you couldn't carry that load indefinately. I see that over and over again here, not that people were greedy, but that they bought one house before they sold the other, thinking that they'd just sell the original one, no problem.

My parents did exactly the same thing. For several years I had to watch them fret over expenses, worry about bankruptcy, renters that destroyed our old house, etc etc. It was terrible. And this was back in the 80s.

What have I learned from all this? I will never buy one house, before I've sold the other. Unless I can afford to pay for 2 mortgages indefinately, b/c you just never know. You may have to. Or not I guess. Hmmmm...
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Old 09-18-2008, 09:06 PM
 
Location: Pennsylvania, USA
5,217 posts, read 4,116,537 times
Reputation: 908
Quote:
Originally Posted by JerseyGirlinFL View Post
Thanks, Dave. I am absolutely considering deed in lieu of, but I hear that there is also a hassle getting a bank to accept this. If the short sale doesn't happen within a month or so, I think that will be the next approach. After that, I guess the only thing left is foreclosure. Unbelievable, but I don't see any other way out.
Deed in leui will go on your record the same as foreclosure would.. becasue basically you are foreclosing on the home for the bank by handing them the keys.

Here's what I suggest.. from someone who went through it myself..

First.. the banks not talking toyou because you are current are so so true. I would stop paying the mortgage on the house you will let go. They will talk to you then... and you will tell them the same things you've been telling them and tell them you want to sell it and it will be a short sale.

Then.. list the house with a Realtor, if you haven't had it listed already ... the bank should send out for an appraisal...

Once the bank gets the appraisal in to you , you'll know exactly what they expect it;s worth to be in todays market..and they are being VERY conservative with the numbers. Find out what their minimum acceptable offer is..it's usually 90% of the market value price.

Then.. drop your price to either the appraisal price or 10K above that price..

Guaranteed your house with that new appraisal price will be an attractive price because again.. banks are being conservative..

My story is a little differnet than yours.. you can read my posts to get thefull story..but I stopped paying in January as i could not longer afford the payments... when I listed hte home it went on for 1 month with only 1 show..then I got the market appraisal price and dropped my asking price.

I then got showings left and right and turned out I got 3 offers all right around the market appraisal price.. it ended up right at the banks appraisal price..so full market price according tomy banks appraisal.

Since you are leaving the home short.. with no money and owing more on the home than it's worth.. stop paying the mortgage and start the short sale procedure.. Your credit will reflect a "sold in less than full" and will take a hit.. but it will take an even BIGGER hit with a deed in leui or foreclosure (all of which reflect the same on your report).

I don't know if Fl they can come after you for the difference.. In NY they can't.. the mortgage is secured only by the property itself. Fortunately GW passed a bill earlie this year that forgave any taxes on teh forgiven debt with some stipulations..like it must be your primary residence, on the primary mortgage etc. Check with an accountant to make sure you'd qualify for that Mortgage debt Forgiveness Relief that was passed.

Good luck! and of course consult an attorney. I am just a person going through it and offering advice from my experience.. but I can tell you that a short sale is the BEST way out.. walking away completely is last resort.. deed in leui is really no different than foreclosure.
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Old 09-18-2008, 10:54 PM
 
Location: Yardley PA
689 posts, read 1,998,965 times
Reputation: 182
Is one of the homes in an area you could potentially rent it out and have it cover some if not all of the mortgage? Just a thought to allow you to ride out the market until one sells.
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Old 09-21-2008, 08:54 PM
 
52 posts, read 97,149 times
Reputation: 21
Quote:
Originally Posted by dgfurman View Post
No, greed obviously isn't a factor. But unwise business decisions are, which would be having 2 mortgages at once, if you couldn't carry that load indefinately. I see that over and over again here, not that people were greedy, but that they bought one house before they sold the other, thinking that they'd just sell the original one, no problem.

My parents did exactly the same thing. For several years I had to watch them fret over expenses, worry about bankruptcy, renters that destroyed our old house, etc etc. It was terrible. And this was back in the 80s.

What have I learned from all this? I will never buy one house, before I've sold the other. Unless I can afford to pay for 2 mortgages indefinately, b/c you just never know. You may have to. Or not I guess. Hmmmm...
I agree with you, and what a hard lesson it was. If I had known better, I would have sold my house immediately, and rented another place until the new house was finished, despite paying for 2 moves. But the market was so hot, it never occurred to me that there would be ANY trouble whatsoever in selling. As I said before, I've seen fluctuating real estate markets in my lifetime, but I NEVER could have imagined this "shutdown," never in a million years. In a normal down market, I would have just lowered the price until the house sold, end of problem.
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Old 09-21-2008, 09:10 PM
 
52 posts, read 97,149 times
Reputation: 21
Quote:
Originally Posted by boocake View Post
I hear you, and I feel for you....I, too, am tired of hearing about how everyone who bought an overvalued home was selfish and/or irresponsible. I bought a home last year in April (at the end of the "bubble" where I am - things didn't die down here until just this year). The home was (is) totally affordable, and my husband and I both had stable employment. The company where he works, however, after being open for 30 years, unexpectedly announced that they are closing at the end of the year, so he is looking for a new job, but there is little work to be had right now in his field. I work remotely, so I do worry that I may be one of the first to go if my company announced layoffs which, today, is a FAR greater threat than it was last year when we bought the house.

My husband has a fantastic opportunity in another town to help run a family business, but we can't sell the house without losing our (large) down payment, and we are unwilling to take on the risk of renting it out in this type of uncertain market. We may have to, in the end, but right now it seems safer to stay put.

We are certainly on very shaky ground, however, and it's just getting REALLY old to hear how irresponsible people were when things were SO totally different a year ago - people who bought homes that were TOTALLY affordable 1-2 years ago may be in bad shape now along with those who really did buy more than they could afford, and it's not fair to lump everyone who is in trouble as being selfish.....
Oh you are so right! People who are not involved themselves seem so smug and judgmental about all of this. As I said, I've been through good and bad real estate markets in my lifetime, but I have never seen nor could have imagined a total "shutdown" like this. Who could have?

Thanks for sharing your story. I really hope it works out for you! Is commuting possible for your husband until you ride out this terrible market?
I agree with you about the renting issue also, its another tough choice to make. Best of luck to you, sincerely.
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Old 09-21-2008, 09:14 PM
 
4 posts, read 10,474 times
Reputation: 14
Hi, I am going through the same sort of thing. I am a brooklyn girl in florida. I have a lot of compassion for you.
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Old 09-21-2008, 09:17 PM
 
52 posts, read 97,149 times
Reputation: 21
Quote:
Originally Posted by ooodsie View Post
Is one of the homes in an area you could potentially rent it out and have it cover some if not all of the mortgage? Just a thought to allow you to ride out the market until one sells.
I did consider renting, but the market was flooded with rentals too. The rental money of course would have cut some of the losses but not enough to make it worthwhile. But thanks for your suggestion!
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Old 09-21-2008, 09:19 PM
 
52 posts, read 97,149 times
Reputation: 21
Quote:
Originally Posted by loubo View Post
Hi, I am going through the same sort of thing. I am a brooklyn girl in florida. I have a lot of compassion for you.
Thank you. Did you want to share your story with us? Most people on this forum have been so nice. Sometimes it helps to talk about it with others. Best of luck to you too.
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Old 09-21-2008, 09:23 PM
 
52 posts, read 97,149 times
Reputation: 21
Quote:
Originally Posted by TristansMommy View Post
Deed in leui will go on your record the same as foreclosure would.. becasue basically you are foreclosing on the home for the bank by handing them the keys.

Here's what I suggest.. from someone who went through it myself..

First.. the banks not talking toyou because you are current are so so true. I would stop paying the mortgage on the house you will let go. They will talk to you then... and you will tell them the same things you've been telling them and tell them you want to sell it and it will be a short sale.

Then.. list the house with a Realtor, if you haven't had it listed already ... the bank should send out for an appraisal...

Once the bank gets the appraisal in to you , you'll know exactly what they expect it;s worth to be in todays market..and they are being VERY conservative with the numbers. Find out what their minimum acceptable offer is..it's usually 90% of the market value price.

Then.. drop your price to either the appraisal price or 10K above that price..

Guaranteed your house with that new appraisal price will be an attractive price because again.. banks are being conservative..

My story is a little differnet than yours.. you can read my posts to get thefull story..but I stopped paying in January as i could not longer afford the payments... when I listed hte home it went on for 1 month with only 1 show..then I got the market appraisal price and dropped my asking price.

I then got showings left and right and turned out I got 3 offers all right around the market appraisal price.. it ended up right at the banks appraisal price..so full market price according tomy banks appraisal.

Since you are leaving the home short.. with no money and owing more on the home than it's worth.. stop paying the mortgage and start the short sale procedure.. Your credit will reflect a "sold in less than full" and will take a hit.. but it will take an even BIGGER hit with a deed in leui or foreclosure (all of which reflect the same on your report).

I don't know if Fl they can come after you for the difference.. In NY they can't.. the mortgage is secured only by the property itself. Fortunately GW passed a bill earlie this year that forgave any taxes on teh forgiven debt with some stipulations..like it must be your primary residence, on the primary mortgage etc. Check with an accountant to make sure you'd qualify for that Mortgage debt Forgiveness Relief that was passed.

Good luck! and of course consult an attorney. I am just a person going through it and offering advice from my experience.. but I can tell you that a short sale is the BEST way out.. walking away completely is last resort.. deed in leui is really no different than foreclosure.
Thanks so much for your advice. I have just skipped my first mortgage payment, and it nearly killed me to do so. But as you said, thats the way to get the bank to talk to you. I am waiting now for the letters and the phone calls. I am working with a company who specializes in short sales and bank negotiating. This whole thing is a nightmare.
Thank you for your comments. I'll make sure to read your postings.
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