The house in Illinois is scheduled to close at 11:30 this morning. Hopefully, this will be the last posting I will make with the "house disaster" tag.
Because tomorrow night is Yom Kippur, just about my entire work this season has been on letting go of my residual bitterness about this whole situation. I think I've mostly done so. It will be a great relief to be able to go into the new year with this situation resolved, without the fears of lawsuits and foreclosures and everything else.
I now need to call Nicor (the power company) and the city of N-ville to indicate my intention to pay all the utilities that we've accumulated since we moved out of the house. So it's not completely over, and it's not like I have an extra $50 a month or whatever it's going to be to devote to this, but you do what you gotta do, I guess.
A couple of days ago there was a post on Get Rich Slowly about his brother who bought a house before he had sold his other house and is now likely to foreclose on both of them. There was a lot of talk about how irresponsible he was, and I suppose that's true, although I think we were brought up with the idea that the bank wouldn't give you the money if they didn't think you could pay it back. (I also think he's incorrect to say that the amount forgiven by the bank via the short sale is taxable income - I've had legal advice telling me so.)
But anyway, I'm fairly confident this criticism doesn't apply to me - we played by the rules, but the rules changed in the middle. It's common to look for a reason that something like this happened to someone, some personal flaw within them, because it makes people feel it won't happen to them. Or because it justifies their political me-first-ism. But of course it could happen and it does happen, every day. Not because people are bad actors, but because they acted under a certain set of circumstances and the cirumstances changed.
I'm not happy, I'm not relieved, I'm just exhausted. And poor. Where's my bailout, Henry?
Showing posts with label house disaster. Show all posts
Showing posts with label house disaster. Show all posts
Tuesday, October 7, 2008
Thursday, September 18, 2008
House of Horrors
The situation with the house in Illinois finally seems to be coming to an end. When last we checked in, the bank had done an appraisal that drastically overvalued the house, by about $30,000, and based on that had turned down the latest short sale offer. Soon after that, the lawyer who was working on it told us that she was going to ask them to have another appraisal done, because the first one was so ridiculous, but that we had to pay for it. My brother-in-law, our main financial Smart Guy, advised us to do it, saying that selling short, even after being in default for a year, was a lot better than foreclosure. "It's a small investment with a potentially big upside" is how he put it.
So we put $475 on the credit card for that, but he was right, because lo-and-behold, the appraisal came back at a whopping $50,000 less than the other one (and $25K less than we paid for the house, which sounds about right, given the market). That was about a month ago. Then the bank had to have it explained to them why there was such a great disparity between the two appraisals, and that took awhile (the appraisal company explained it based on a misinterpretation of the square-footage of the house by the first appraiser). Now we're just waiting, supposedly, for the last guy at the bank to put his initials on the agreement. And it's really the last minute, because the foreclosure sale is scheduled for next week!
The one thing I don't think I've said before is that we had a second mortgage on the house, from the synagogue, which lent us money in the hopes that we would stay there a long time - ha ha. (They kicked me to the curb after the first contract.) If the house had sold everything would have been fine but it didn't, and in a short sale situation they have to be enticed to release their lien. So we had to offer them a settlement; we offered about 10% of what we owed, which they accepted because, we speculate, the situation is embarrassing to them. About the kindest thing I I can bring myself to say is that I'm sure it wasn't their intention to ruin us financially, even though that's what ended up happening. If the house forecloses that lien isn't covered and they could still sue me; I don't really want to give them $5K to watch the house foreclose, but that's a bridge I'll have to cross when I get to it.
Now (if everything goes "well") I have to come up with 5 grand which, if you've been paying attention, I don't have. By next week. Fortunately we have some relatives who actually don't live paycheck to paycheck - can you imagine? - and they've promised to help us out. So there's another debt to add to the pile. But - and I say this much more in weariness than in any kind of happiness - it looks like the albatross will be off our necks, one way or the other, by the end of next week. Famous last words, as I know better than anyone.
So we put $475 on the credit card for that, but he was right, because lo-and-behold, the appraisal came back at a whopping $50,000 less than the other one (and $25K less than we paid for the house, which sounds about right, given the market). That was about a month ago. Then the bank had to have it explained to them why there was such a great disparity between the two appraisals, and that took awhile (the appraisal company explained it based on a misinterpretation of the square-footage of the house by the first appraiser). Now we're just waiting, supposedly, for the last guy at the bank to put his initials on the agreement. And it's really the last minute, because the foreclosure sale is scheduled for next week!
The one thing I don't think I've said before is that we had a second mortgage on the house, from the synagogue, which lent us money in the hopes that we would stay there a long time - ha ha. (They kicked me to the curb after the first contract.) If the house had sold everything would have been fine but it didn't, and in a short sale situation they have to be enticed to release their lien. So we had to offer them a settlement; we offered about 10% of what we owed, which they accepted because, we speculate, the situation is embarrassing to them. About the kindest thing I I can bring myself to say is that I'm sure it wasn't their intention to ruin us financially, even though that's what ended up happening. If the house forecloses that lien isn't covered and they could still sue me; I don't really want to give them $5K to watch the house foreclose, but that's a bridge I'll have to cross when I get to it.
Now (if everything goes "well") I have to come up with 5 grand which, if you've been paying attention, I don't have. By next week. Fortunately we have some relatives who actually don't live paycheck to paycheck - can you imagine? - and they've promised to help us out. So there's another debt to add to the pile. But - and I say this much more in weariness than in any kind of happiness - it looks like the albatross will be off our necks, one way or the other, by the end of next week. Famous last words, as I know better than anyone.
Thursday, July 17, 2008
The shortest of sales
It's been a while since I posted on the house-in-Illinois situation. After the short-sale offer was turned down in April, we started to look into doing a deed-in-lieu, which is what we would call in the vernacular "turning the keys back over to the bank." Then in mid-June I got a call from the RE agent telling us we had a better offer, and we were going back to the bank.
Here's the stat sheet: We bought for $309K in 2004. The best offer we've been able to get in the 500+ days that the thing has been on the market is $281. As part of the short sale process, Sovereign Bank had an appraiser come in, and the number he came up with is - get this - $330. In other words, our house apparently has appreciated in value by 10% at the same time that nobody has wanted to buy it and the bottom has dropped out of the housing market nationally. Somebody should tell the buyers how valuable the place is!
So that was the end of that - Sovereign turned down the latest short sale offer based on their fairy tale appraisal. Now we're asking them to go forward with the deed in lieu. I have no idea whether that will happen - no one seems to understand Sovereign's behavior or why they're making the decisions they're making.
I'll be very interested to see what they end up getting for this house after it's all said and done. I'll bet you anything it ain't gonna be no $330K.
Here's the stat sheet: We bought for $309K in 2004. The best offer we've been able to get in the 500+ days that the thing has been on the market is $281. As part of the short sale process, Sovereign Bank had an appraiser come in, and the number he came up with is - get this - $330. In other words, our house apparently has appreciated in value by 10% at the same time that nobody has wanted to buy it and the bottom has dropped out of the housing market nationally. Somebody should tell the buyers how valuable the place is!
So that was the end of that - Sovereign turned down the latest short sale offer based on their fairy tale appraisal. Now we're asking them to go forward with the deed in lieu. I have no idea whether that will happen - no one seems to understand Sovereign's behavior or why they're making the decisions they're making.
I'll be very interested to see what they end up getting for this house after it's all said and done. I'll bet you anything it ain't gonna be no $330K.
Monday, June 23, 2008
Rent
Op-ed by Paul Krugman in today's Times - maybe home ownership isn't all its cracked up to be.
In addition to the regular tax breaks that all home owners get (the deduction of mortgage interest), if you are clergy with a pulpit and no parsonage you get to knock the costs associated with homeownership (furniture, utilities, the lot) off your taxable income. This obviously made buying a home all the more attractive in the situation we were in in Illinois. Not to mention that at the time, prices were rising - not skyrocketing, but rising steadily. Then, of course, things went off a cliff - both for us, and in the housing market.
Krugman is right to point out the dangers. Home ownership can be a very effective way to build a nestegg, if you are planning to stay in your home for a long time and if you don't keep dipping into the equity. For people who can't or won't make that commitment, it's a big gamble that home prices will rise enough for you to make something out of the deal, or even just make back what you put into it. Or even, as in our case, that you'll be able to rid yourself of the house at all.
The one financial advantage to renting is that one doesn't have to pay property taxes. I suppose in most cases this is figured into the cost of the rent.
I'm not saying anything that anyone else doesn't know. But while we were in seminary we were constantly inundated with the "knowledge" that because we were renting, we were "throwing our money away" - and we believed it. Then there's the language of "putting down roots" - that if you don't buy, you're not doing it, as if one's presence in a place is only verified by a deed. All these factors led us to buy as soon as we landed in a job, which led to the distastrous situation we're in now - and now there's no danger that we're going to buying another house anytime soon. So I guess the real answer is - there's no such thing as a sure thing. Despite the civic-religious tenet of home ownership, sometimes renting is indeed the right thing to do.
In addition to the regular tax breaks that all home owners get (the deduction of mortgage interest), if you are clergy with a pulpit and no parsonage you get to knock the costs associated with homeownership (furniture, utilities, the lot) off your taxable income. This obviously made buying a home all the more attractive in the situation we were in in Illinois. Not to mention that at the time, prices were rising - not skyrocketing, but rising steadily. Then, of course, things went off a cliff - both for us, and in the housing market.
Krugman is right to point out the dangers. Home ownership can be a very effective way to build a nestegg, if you are planning to stay in your home for a long time and if you don't keep dipping into the equity. For people who can't or won't make that commitment, it's a big gamble that home prices will rise enough for you to make something out of the deal, or even just make back what you put into it. Or even, as in our case, that you'll be able to rid yourself of the house at all.
The one financial advantage to renting is that one doesn't have to pay property taxes. I suppose in most cases this is figured into the cost of the rent.
I'm not saying anything that anyone else doesn't know. But while we were in seminary we were constantly inundated with the "knowledge" that because we were renting, we were "throwing our money away" - and we believed it. Then there's the language of "putting down roots" - that if you don't buy, you're not doing it, as if one's presence in a place is only verified by a deed. All these factors led us to buy as soon as we landed in a job, which led to the distastrous situation we're in now - and now there's no danger that we're going to buying another house anytime soon. So I guess the real answer is - there's no such thing as a sure thing. Despite the civic-religious tenet of home ownership, sometimes renting is indeed the right thing to do.
Saturday, May 31, 2008
Bad advice
Funny post from I paid for this twice already - a how-not-to-be-frugal posts as opposed to the frugality basics posts I mentioned the other day. Ben Stein actually wrote a whole book like this, which I kept for a while in the bathroom for quick review. Of course, one of his was "don't buy a house" and we know how that turned out for me....
Speaking of which, we're trying to do a "deed in lieu of foreclosure" with Sovereign, but I can't get anybody in the loan mitigation department to return my telephone calls. I just got another utility bill from the house - how is an empty house using $63 in water, I ask you? - and there's just no telling how long it will take them to get around to sheriff's selling it. The lawyer I've been consulting with (dollar signs roll...) said that we should keep the insurance up just in case the place burns down the day after we let it lapse, which will be a big bill in July if it goes that far, but that we could let the utilities lapse. So that's what we're going to do.
And another consequence of my continued and elongated default is that I keep getting notices from Bank of America (my major credit card creditor) lowering my credit limit. Every time I pay off another $1000 they lower the credit limit to the next thousand. So I'm at something like $7400 now and they lowered the limit to $8000 "due to a major derogatory item on your credit report," according to the letter. No kidding. But I can keep using my card, they assure me, as long as I don't spend more than $600.
This is actually sort of okay, because I don't want to have a whole lot of available credit anyway at this stage, but the issue for me is that, while I acknowledge that I'm going to spend the next few years discovering how people with bad credit live, I can't start rebuilding my credit until this thing with the house is resolved, and it just won't resolve.
Speaking of which, we're trying to do a "deed in lieu of foreclosure" with Sovereign, but I can't get anybody in the loan mitigation department to return my telephone calls. I just got another utility bill from the house - how is an empty house using $63 in water, I ask you? - and there's just no telling how long it will take them to get around to sheriff's selling it. The lawyer I've been consulting with (dollar signs roll...) said that we should keep the insurance up just in case the place burns down the day after we let it lapse, which will be a big bill in July if it goes that far, but that we could let the utilities lapse. So that's what we're going to do.
And another consequence of my continued and elongated default is that I keep getting notices from Bank of America (my major credit card creditor) lowering my credit limit. Every time I pay off another $1000 they lower the credit limit to the next thousand. So I'm at something like $7400 now and they lowered the limit to $8000 "due to a major derogatory item on your credit report," according to the letter. No kidding. But I can keep using my card, they assure me, as long as I don't spend more than $600.
This is actually sort of okay, because I don't want to have a whole lot of available credit anyway at this stage, but the issue for me is that, while I acknowledge that I'm going to spend the next few years discovering how people with bad credit live, I can't start rebuilding my credit until this thing with the house is resolved, and it just won't resolve.
Tuesday, April 29, 2008
Updates
1 - I called the Times. It turned out it was $27 / mo, which comes out to $6.50 a pop, significantly more than Watermark's price of $5. So I said, discontinue. So the customer rep said, would it may a difference to you if I gave you 1/2 off for the next 16 weeks? And I said, why yes, it would. So now I have the Times for $3.25 for the next 16 weeks. I marked in on the calendar, and at the end of that time, I'll either ask for it again, or cancel. I guess sometimes you really do just have to ask.
2 - We've been paying utility bills for the house in IL even though it's been vacant for 5 months. I probably should have just turned everything off then (my grandparents used to have a home in upstate NY, so I know how to winterize a house). But we were keeping it attractive in the hopes of attracting a buyer, ha ha. But I have 2 $130 bills here, one for electric and water, and 1 for gas. I'm not sure exactly how an empty house uses $80 in water, but the service rep said it might be a running toilet. All I know is, I ain't payin' no more. We're going to have the service turned off and have the neighbor who's been keeping an eye on it empty out the pipes. In July when the current insurance payment runs out, it won't be insured anymore. I just wish Sovereign would hurry up and foreclose already.
2 - We've been paying utility bills for the house in IL even though it's been vacant for 5 months. I probably should have just turned everything off then (my grandparents used to have a home in upstate NY, so I know how to winterize a house). But we were keeping it attractive in the hopes of attracting a buyer, ha ha. But I have 2 $130 bills here, one for electric and water, and 1 for gas. I'm not sure exactly how an empty house uses $80 in water, but the service rep said it might be a running toilet. All I know is, I ain't payin' no more. We're going to have the service turned off and have the neighbor who's been keeping an eye on it empty out the pipes. In July when the current insurance payment runs out, it won't be insured anymore. I just wish Sovereign would hurry up and foreclose already.
Thursday, April 24, 2008
More on the house
I think I might have mentioned that we got the letter from Sovereign telling us they weren't going to accept the latest short sale offer. Now we're on the short track to foreclosure. (For those who haven't been keeping score, we're no longer living in the same state as the house, which has been up for sale for 14 months now.) I called the foreclosure guy at Sovereign whose number I had, he doesn't know how long it will take until the sheriff's sale. Meanwhile, we've been paying insurance and utilities on the empty house, to keep it saleable. Now that a sale doesn't look likely, we're probably going to stop doing that. Our insurance is paid through July, but we've been paying $130/mo. that we really can't afford to keep the empty house heated all winter. The RE agent wants us to keep it up, but why should we?
Thursday, April 10, 2008
Now I know what it felt like to be on the Titanic
In the latest news in the painfully slow-moving disaster that is our house in Illinois: Our RE agent told us that Sovereign has turned down our latest short-sale offer. This isn't a surprise at this point, but still ridiculous considering that they're asking for more money than we owe to them on the house (there's also a 2nd mortgagor, which might have something to do with it). Everyone's in agreement that we're not going to get an offer for what they're asking for (20K less than we paid; the best offer is currently 35K less than that). RE agent asked if we wanted to have a lawyer take over the file, and I was like, sure, whatever. As long as nobody thinks they're actually going to get paid for the work they're doing.
For all the times that people say that buying a house is the foundation of wealth building etc.... my situation may be a little different (or not, considering the number of foreclosures moving through the system) but I can say without fear of contradiction that in a lifetime of making stupid financial choices absolutely the stupidest thing I have ever done is buy this freaking house.
For all the times that people say that buying a house is the foundation of wealth building etc.... my situation may be a little different (or not, considering the number of foreclosures moving through the system) but I can say without fear of contradiction that in a lifetime of making stupid financial choices absolutely the stupidest thing I have ever done is buy this freaking house.
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