Wednesday, September 14, 2011

Our Short Sale Adventure

YES, this is "the" house
The American Dream, to own your own house with a white picket fence! Isn't that what everyone in America would love to do, own their own home? When the mortgage crisis kicked in it almost paved the way for lower income families to now buy homes that were more or less "discounted" for sales some up to 50% it also presented another problem, having to deal with these banks that are holding the current mortgages on these homes. A lot of homes went into foreclosure and that is where the deals kicked in, but a lot of homes also went into a pre-foreclosure state, which allowed for an agreement between owner and bank to sell the home at a lesser value than what it's worth or the mortgage is for, a discounted amount per say or a "short sale". That term really is deceiving, short sale, makes one think you are buying a home that the sale is going to move along really fast, hmmm not so much the case... short sale meaning it's being sold short of what is owed on it. Now by allowing sellers to sell homes for short sales it keeps the foreclosure off of the sellers credit, the seller can apply for financial hardship to have the balance of the mortgage(s) forgiven, and the banks get a hefty bonus from the government for letting the house go on a short sale instead of having to deal with a foreclosure and well they in turn pretty much get every penny they are owed after this big government bonus. Sounds like a good plan, right? Like a win win.. no one owes anything, bank gets all their money, and someone now has the American Dream of owning their own home for substantially less than it's true value... Well I hate to break it to you, this is not the case at all.

I came across this house way back in March in the home listings online. It was 2000 sq ft, 6/10ths of an acre backyard, one floor, 3 bedrooms, and an inground pool for $95k (almost HALF of what it sits on the tax rolls for). It sounded too good to be true listed at $95,000. So on a fluke we went to look at it, upon seeing it I could see it needed some love. It had been vacant since November, the owner had moved out. He never closed the pool right and well the outside needs some siding or to be painted. Basically it needed some love... love I knew would be no problem for us to give it. It took a few weeks of banks jerking us around, but finally we found a private lender that dealt with FHA loans. There were restrictions on buying this house, it had to be a cash transaction or an FHA rehab loan. A Rehab loan would do just that rehab the property to its full value, but it also guarantees to the bank holding the note that they will get 90% of the mortgage value if the new owners go into foreclosure. This is a win win situation for banks and buyers and this program is advertised very little. I knew nothing about it until this ordeal with this house came along and have since felt like I've become an expert on the topic. The rehab loans puts the improvements (Up to 30k) coupled into the mortgage, into one payment, rather than people having two separate loans one of which will have a huge interest rate. Isn't that the case, improvement loans are high interest because they are supposed to be such short term? Not the case with the FHA rehab loan.

So here we found the house of our dreams (that needed our love), we got the mortgage through, have the money in the bank for the down payment, now we sit and sit and wait and wait. My god we have been waiting 5 1/2 months now. First it was the offer being rejected because the paperwork wasn't right, then it was the seller refusing to hire an attorney crying broke, we hired the attorney for him, then finally the offer paperwork goes in RIGHT and it's not sent back in a week. WOOHOO or so we thought.

Today we received a call from the Realtor that Citi Bank (who holds the primary mortgage on this house) keeps jerking her around and every week there is another "new" person dealing with this account. Which is making it impossible to get an offer accepted if it keeps going from one to another. Not only that, but Bank of America (who holds the secondary mortgage on this house) said they are absolutely NOT taking a loss on this house and they want every single penny from this guy who owns this house. WHAT? Our question was, wouldn't that push it into foreclosure automatically? No answer to that yet, but here is the hitch... Bank of America will get every penny owed to them by the government for allowing this house to be short sold instead of it going into foreclosure. So once again I am at the mercy of some bank greed. The greed banks have is what caused the mortgage collapse in the first place and yet here it is again. I saw on the news the other night that the government was suing banks like Bank of America, Citi, and Citizens for allowing the mortgage collapse in the first place. YES it could have been stopped, but wasn't over some GREED. Please watch Too Big Too Fail, it is an HBO film and is based on the true events of what happened with the mortgage collapse a few years ago. (Trust me you will walk away from this movie pissed off like never before)

For the life of me I can't make sense of this whole process. WHY let a home sit empty? Both banks are responsible for the upkeep of the property and trust me when I tell you I go by that house once a week to make sure the grass is cut, because if there are any summons issued by the town to the address guess what they carry forward to us, the new owners (if that ever happens). So I do not hesitate to pick up the phone and tell the Realtor that the grass is two feet high please get on the bank to get it cut or the weeds are in the neighbors yards, hanging over the fence. The bank is having no realization that the longer this house sits the MORE work it's going to need and the more likely we are going to back out of it. Yes, we do have the escrow with $30K in it for the repairs, we do not have to use all of it, just a minimum of $5k, which the furnace alone will cost, but even so why fix something that didn't need to be fixed in the first place but due to neglect now has to be fixed? It's a money waster.

I am so aggravated by these banks it's unreal. Why on earth would you let a house sit like that when it could be sold you could recoop some of your money and then get the bonus from the government that it sold short and wallah you have ALL your money back in your bank? Who at the bank is making all these idiotic decisions? These people have to be stupid, to say it nicely, or more like the donkey's behind. The process is such one that needs to drastically be revamped... the government put standards on these banks now and guess what, they are NOT following any of them. I will NEVER use any of the big banks for a mortgage or to keep my money in for that matter. My, and everyone's, money is much safer at credit unions. Heck to these big banks and their BS. I'm losing my patience with this house and I'm losing it really fast. The guy lost the house because of a divorce and could no longer afford it on one income.. that is not our fault, we simply just want to buy our American Dream. Why do banks make living the American Dream such a task to perform? They were the ones who screwed up giving homes to people who couldn't afford them, causing the collapse, now you have folks that do have the means to buy these homes and you are jerking them around by not closing the deal.

I can't even state the amount of stress this is all causing me. We are now in this nice apartment complex in a nice town, but that is just it.. it's a complex and it's like living in Melrose Place. This one gossips about that one, cops are here once a day because we have a wife beater in our building, people owning dogs who can't be responsible and pick up their shit (I call these people phantom shitters, because you cant' see who they are at night but know they aren't picking up the shit because you step in or almost step in it) I want my house and I want it NOW! Every piece of furniture we buy while here is bought with the "will it fit into the new house decor too" thought in mind. We lost a lot of things moving from the old house, things that were covered in that nasty black soot I talked about... things got ruined and lost and now to replace them with a duo thought in mind, a thought that seems to keep taking a beating no matter how much we hang in there with it. What to do What to do? I know I'd like to bitch slap the bank personnel that are dealing with this house.. literally slap the crap out of them, this is just non-sense at it's peek and is showing just how greedy banks still are.  I don't believe that banks should be allowed to operate "for profit" but they should be standardized as a "not for profit" company or corporation, much like the health insurance companies should (that is a whole other post)

What do we do? Do we keep hanging in there with this house? Do we let it go and find something else? Do we stay put and let it go into full foreclosure and wait yet another year and buy it that way? I don't know what to do, on one hand I want this house more than you can imagine, yet on the other hand I want my horses in my backyard and would rather look for a farm. This thought goes back and forth like a tennis match in my head all the time. My head also hurts from beating it off the desk over all this. I just sit here shaking my head over it all, I don't understand the logic of the bank's thinking nor do I comprehend exactly what they are attempting to do by delaying this short sale. I roll my eyes.... until the next bank/house update! a big collective SIGH and UGH all at the same time

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