Housing update: short sale, foreclosure, etc.

By Stew

hang-on

I am on the road once again and my internet is a little shaky, so I am not going to run the post that I had originally planned for today. Furthermore, Sheila asked for a housing update on this post and since there have been some developments, I thought I would write about our house once again.

As most of you know, we have been trying to sell our house in another state for 15 months without success. A month ago, I was trying to decide what to do. My attempts to ask our second mortgage holder to release the lien on the home in order to allow it to sell in exchange for my promise to still repay the money were unsuccessful. It seemed like we were going to have to stop making payments and suffer the consequences.

Offer still pending

At the last minute, we recieved an offer – not for the amount of money that we owe on the property, but an offer none-the-less. We requested a short sale from our second mortgage holder, asking them to settle the debt for approximately one third of what we owe them, but it seemed like they were not interested in anything less than the full amount. I then learned that the mortgage holder had insurance on the note that would only pay out if there was a short sale, a default or a foreclosure. Those were all options that I have been trying to avoid. We have good credit and I want to keep it that way.

Short sale or no short sale?

In order to avoid a true short sale, we would have had to come up with approximately $12,000 out-of-pocket on the date of the closing. I was making preparations to do this via a 0% APR balance transfer. A risky strategy, certainly, but I could not afford to risk losing a potential buyer while the mortgage company dragged its feet making a decision.

Falling into place

And then, out of the blue, the company holding the second mortgage called me and agreed to accept the short sale amount on the date of the closing AND allow me to repay the balance of the loan over time.

This will allow us to protect our credit from the effect of  short sale or default and allow us to sell our home – exactly what I had asked for originally!

Still hanging on

I have scraped together enough money to keep all of our payments, insurance, taxes, etc. current through July in order to not jeopardize the proceedings. I have had to incur some debt as a result, but it will be worth it if the house is finally sold. You might recall that we had planned to stop making payments in June. If this offer to purchase falls through, we will be in worse shape than before.

So, we are on pins and needles while the buyer lines up financing, conducts the final house inspection and bank appraisals. We are praying and hoping that things proceed according to the plan that has been laid out and we hope to conclude this matter three weeks from now.

We covet your prayers.

Photo by L.Marcio_Ramalho


16 Responses (including trackbacks) to “Housing update: short sale, foreclosure, etc.”

  1. Sheila Says:

    –And then, out of the blue,– :) God’s hands are around you.

    ‘Peace I leave with you; my peace I give you. I do not give to you as the world gives. Do not let your hearts be troubled and do not be afraid.’ John 14:27

    ‘Commit everything you do to the Lord. Trust Him, and He will help you.’ Psalm 37:5

    ‘Indeed, the very hairs of your head are all numbered.” Luke 12:7

    ‘Never will I leave you; never will I forsake you.” Hebrews 13:5

    While I honestly believe that God is working this out for you, even more importantly I want you to know that no matter what, God is with you and loves you. He is unchanging no matter what our circumstances.

    ‘I have told you these things, so that in me you may have peace. In this world you will have trouble. But take heart! I have overcome the world’. John 16:33

    Peace be with you.

  2. Gina Says:

    “Out of the blue” is definitely God working this out for you. We’ll keep praying. You keep focused on the goal. Thanks for the update. I had been wondering too.

  3. Neal Frankle Says:

    You have my prayers…….absolutely.

  4. Kika Says:

    I will pray today for your situation. I am impressed by your conviction to keep working hard at this and trying to do “the right thing”. I also feel for you and imagine the stress that you and your wife have been under as you wait for a resolution/sale on your property.

  5. Marsha Says:

    Wow, this is really interesting. Looks like things are lining up for you all – I’ll keep my fingers crossed!

  6. Phil Says:

    I guess I haven’t stopped by in a while… since the early Spring at least. Last I heard you had a renter and you were going to rent the place out for a few years while you waited for the market to come back – what happened to that plan?

  7. Dave Ramsey Says:

    Folks, this is why you never, ever purchase another home to move to before selling your current home. The only exception might be if your current home is paid off and has no mortgage.

  8. marty Says:

    We have been praying for you and your family all along and hope this resolution works for you very soon. Believe!

  9. ABCs of Investing Says:

    Wow – exciting stuff. Good luck on the sale – my fingers are crossed.

  10. Stew Says:

    Wow, I really did not know that all of you were this invested in the story . . . I appreciate and I am humbled by your concern and prayers. We continue to rely on Providence. What other choice do we have?

  11. Stew Says:

    Phil, even if we rented the house for the maximum possible in our current market, we would have still had a budget deficit every month.

    Dave, not sure if you really are the Dave Ramsey . . . there is no denying the common sense of your advice, but it might be too simplistic. Our financial situation might actually be worse had we stayed, even if that did not turn out to be the case, I moved to a job that paid better, allowed for more family time and represented advancement within my field. Had I stayed at my old job, I most certainly would have been “downsized” in the last year. Not saying you are wrong, but . . .

    The other issue is that of faith. Our move was a step of faith and while we are certainly tap-dancing on the edge of financial oblivion at the moment, God has met our needs for the last months and I believe that He will order our steps for the next 15, at least.

  12. Christine Says:

    I think Phil has confused Stew with Glbl. Glbl also has an extra house, which he has successfully rented out. If Phil hasn’t been around, he may not even know that Stew is not Glbl. I still get confused, and I’ve been reading daily since sometime in January.
    Hope that helps, Christine :)

  13. Dave Ramsey Says:

    Stew said: “there is no denying the common sense of your advice, but it might be too simplistic. Our financial situation might actually be worse had we stayed, even if that did not turn out to be the case, I moved to a job that paid better, allowed for more family time and represented advancement within my field. Had I stayed at my old job, I most certainly would have been “downsized” in the last year. Not saying you are wrong, but . . .”

    Perhaps the move was warranted, but you could have rented instead of buying in the new location.

  14. Stew Says:

    Christine, thanks for the help, I wasn’t sure where that came from.

    “Dave” – I don’t want to feed a troll, but so that others understand, we did not purchase a house in our new location. We are renting and plan to rent for a long time.

  15. LAL Says:

    Stew, really what other option can there be if you move other than renting out your house?

  16. SingleGuyMoney Says:

    Stew – Good luck on the sale.

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