My house: a cautious reason to hope
By Stew
Many of you are well aware of my travails regarding the home that we own in another state. If you missed those posts, you can read them here and here. Many of GLBL readers have been very helpful with your suggestions and if you happen to be struggling with decisions regarding your house, I encourage you to read through the comment sections on the aforementioned posts. They are a great resource.
I have been working diligently in order to figure out the best plan for me and my family. Over the past fourteen months, we have spent close to $12,000 in order to stay even with our payments, insurance, taxes, utilities and repairs. Our savings is gone, our emergency fund is nil and I have cashed in about half of what little retirement we had put away. I am earning as much side income as I have time for and my wife babysits anywhere from one to five children (beside our own) everyday in order to make ends meet. At the moment, our credit is good and God has provided for our needs, but we are at the point where we are starting to incur major debt on behalf of this house.
Two weeks ago, I called the company who was holding our second mortgage to see if they would release the lien on our home and make the debt a personal loan. This would allow us to lower the price of the house to the amount of our first mortgage. I was surprised when they were unwilling to work with me – and the reason? Because they have insurance on the loan that does not payout unless I do a shortsale, default or foreclose! It is in the best interest of the company holding the note that a something bad happens to me and my family. Dead end.
So, three or four days later, I had made up my mind that there was nothing we could do other than just quit making payments on everything. We have no cash left. The only money in our savings account is from a 0% balance transfer that I did in March. Taking out balance transfer is not a strategy that I or glblguy recommend, but it was an emergency.
And then my realtor called.
Finally an offer
After fourteen months and fewer than six showings, a couple was about to make an offer on our home. As of today, we have an accepted offer on our house! The offer does not cover all that we owe, but the offer is greater than we ever thought possible even a month ago. Talk about the eleventh hour . . . The contract with my realtor was within a week of expiration, I had made the last payment that I intended to make, and there seemed to be no hope of avoiding a major financial calamity.
Now, there are still a lot of moving pieces that still have to fit together. The second mortgage company still has to approve the sale. If they do not accept our buyout offer, we are back to square one. The ironic thing is that if I was two or three months behind in our payments, it would be a cinch that the offer would be accepted. The fact that our loan is current means that the company believes there is more money to be squeezed out of us.
The buyer is not yet locked in, they are holding the earnest money until we find out what the second mortgage company will do. Furthermore, I am not sure of the state of their financing – it is possible that the bank can still refuse to fund their purchase. The buyer could still just cut and run at this point . . . stranger things have happened. This is not yet a sure bet.
Today, I am considering taking out a personal loan that will allow me to pay off the second mortgage on the date of the closing, this way the purchase will not be dependent on the accountants or actuaries employed by the lender. This strategy would also move up the closing date almost a month, which also reduces the risk that something might go wrong. We would be another $10,000 in debt, but at least we would no longer be home owners.
After the year that we have just finished, my faith in God is stronger than ever before and even without this offer to purchase, I do not think that I will ever doubt his hand of Providence.
Yet He keeps on giving.
Photo by goldberg
June 2nd, 2009 at 8:40 am
I’m glad to hear things might be working out. I’m also glad to see you giving credit where it’s due. Good luck and God Speed on the sale!
June 2nd, 2009 at 8:59 am
Good luck! I hope everything works out.
June 2nd, 2009 at 9:08 am
Stew,
I feel like I am invested in your story. Throughout your gut wrenching story you seem to have continuously made moves without seeking professional help. If you refer back to the 2 posts you had previously made I implored you to do such that, and I once again ask you, “Before you make any moves GO TO TALK TO SOMEONE!”
That someone can be a person IN YOUR STATE (or old state rather cause some where along the line you moved), an attorney admitted in the old state, a financial planner, a CPA. SOMEONE who can tell you the ramifications of each move.
Off the top of my head I can think of 2 or 3 issues that you can ask them:
1) What are the recourse options of a 2nd mortgagee (i.e. the bank holder)?
2) Can the 2nd Mortgagee prevent the sale?
I don’t do real estate closings, but I have seen with my friends sometimes short sales can take months…then you will be stuck with the home AND the outstanding personal loan.
Then, the eventual question comes up…how are you paying off the personal loan?
I wish you luck, and am anxious to get a response.
June 2nd, 2009 at 9:14 am
Good luck! I hope things really do work out for you. Isn’t it awful that these companies set us up to fail? I also think it’s terrible that it would be easier to take care of this issue if you were less responsible with your money. More evidence that the whole system is messed up…
June 2nd, 2009 at 9:26 am
I’m so very happy to read this. God is good! I have been concerned for you. I have been in a similar situation that didn’t quite get to this point (5 months owning 2 houses), and so I do have a great deal of empathy for you. I will continue to pray for your situation.
June 2nd, 2009 at 10:19 am
Stew– take the money and run. Take a small loss to cut your losses if need be. The last thing you want to have happen is to bleed out slowly.
I hope it works out for you.
June 2nd, 2009 at 10:44 am
We are just hoping that things continue to move forward . . .
My Journey, I believe that I have consulted with enough people. Several mortgage brokers, several realtors and several friends who are in the industry. Surprisingly enough, a number of them counseled me to quit making payments two or three months ago. The second mortgage holder can block the sale unless I provide satisfaction on the closing date.
Sheila, this has been a real test of faith, I just hope it is over.
DDFD, you got it!
June 2nd, 2009 at 12:49 pm
Hurray for the offer! I will keep my fingers crossed that this all works out. Your story is both scary and hopeful. I know you all are committed to doing the right thing, and it really chaps that the lenders just want to use people up – without any concern for the human consequences. I know they have a business to run, but they are essentially trying to make up for the bad decisions they made in the past by inflicting further abuse on their customers. JMO. (and I’m not implying their “bad decisions” were with respect to you!!)
June 2nd, 2009 at 12:58 pm
Very best of luck! Hope this works out for you.
We’re putting our home on the market in a month (we’re going to live full time in our RV). We’re fortunate in that we don’t need to sell and can wait this out for awhile. It really is tough out there – will also keep fingers, toes and eyes (when I’m not writing) crossed for you.
June 2nd, 2009 at 1:22 pm
I agree w/DDFD – take the offer & run. Good luck and God speed on getting to closing. We’re praying for you and your family!
June 2nd, 2009 at 5:14 pm
Fingers and toes crossed for you…
June 2nd, 2009 at 5:40 pm
I am so happy to hear that. I pray that things will go smoothly. I am sure it is a very nerve-racking time. God is great, and ultimately, His will be done! :)
June 2nd, 2009 at 6:13 pm
I, too, am so very happy to hear about this possible offer. When all is said and done and some time has gone by, please take the time to go over your housing saga and see what lessons, if any, can be learned. For me, the tough times bring the greatest gifts. They can just be hard to find at first.
June 2nd, 2009 at 10:51 pm
I really appreciate your honesty and your willingness to share this story. It’s obvious that you are clinging to God – just like you should.
June 2nd, 2009 at 11:18 pm
I really hope the sale goes through. I’m also glad that you had decided to do what you needed doing (stop making payments).
Mike
June 3rd, 2009 at 11:36 am
Stew,
I hope this offer pans out for you. I have some questions though. If you knew then what you know now and how much it would have cost you (financially as well as the stress and other factors), would you have done it anyway?
If so, what would you have changed about the situation?
June 3rd, 2009 at 12:31 pm
Wow. good question, I will have to think about that.
June 10th, 2009 at 11:05 pm
Sometimes I feel like God brings us to our KNEES and then rewards us – when we probably should have been on our knees praying from the start. God is so good….
I hope that your house sale goes well…it’s going to take time, hopefully the buyer is willing to wait it out with you! I agree with DDFD – take the money and the outstanding loan will work itself out over time. $10,000 is really not a lot of money in the big scheme of things – it could be so much worse.
Good luck!
June 22nd, 2009 at 12:52 pm
Hey, can you give us an update?