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2011-08-10 3:21 PM
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Subject: RE: short-sale house : COJ advice?
Batlou - 2011-08-10 3:59 PM
Cuetoy - 2011-08-10 1:43 PM
Batlou - 2011-08-10 1:34 PM
PeterAK - 2011-08-10 9:28 AM

condorman - 2011-08-10 8:21 AM Thanks.  All good advice.

Last year upgraded my wife's 2005 vehicle to a 2011 Toyota and I just traded in my 2000 Audi on a 2011 Toyota.  So we are set on the vehicle situation.

And as of August 1st, we officially went into "overdue" status - as friends of our did a short sale on their house and wasted about 9 months and 3 offers because the bank wouldn't talk to them about a short sale b/c they had been staying current on their mortgage.  So we knew that we had to be overdue (and take the credit score ding) if we wanted to do this.

Total shame too because we spent 5 years renovating that house from top to bottom, restoring a lot of the original features as the house was built in 1888.

 Asking for the bank to accept a short sale when you have two new cars in the garage is outrageous.  

X2, not sure how the bank, it's investors and your neighbors are responsible.  While I have not walked in your shoes, it seems that buying new cars just prior to telling the bank to shove it is a bit unfair.

Telling a Bank to shove it is unfair?  I forgot that the banks treat their customers so fairly that they deserve our outermost respect

I hope the OP does what is best for him, his family and his future.  Being unfair to a bank that helped create this mess we have in the housing market would not take my sleep away for a single second.

Agreed, the OP needs to do what is best for his family.  Having said that, when I bought my house and signed my contract to pay back the loan this was not done at gun point.  I agreed to terms based on current market value of house and rate at which I would repay.  The banks served only as enablers to our bad decisions allowing us to over extend ourselves.  I was qualified for a loan on a house almost 2.5 times that of which I bought.  No idea how they calculated that because I would have certainly been a slave to my home and the bank had I hit that price point.

Both of my cars are older than the ones the OP traded in and one is sitting in the garage not running at the moment.  Like the OP, it's also an Audi and the cost to repair is really high, will do the repairs myself to save a grand, I am not a mechanic but hopefully Google will get me through it. Would like to buy a new car or two but current economic downturns suggest large purchases should be a cash and carry transaction until things stablize. 

 

I know that no one is forced to sign a mortgage agreement, i wasnt, and yes banks were enablers, negligents and down right irresponsible and constributed equally to this mess and did not suffer the consequences of their actions.  So to suggest that a person that tried to save their home should feel guilty about trying a shortsale is ridiculous IMHO.

In regards to the cars, the OP made a sound decision based on the situation and the cost repair factor.  I can say that i would have done the same thing and i wouldnt have cared what anyone thinks, even less a bank.

To the OP, i had a friend that went through this, suffered many sleepless nights until he contacted a lawyer that specialized in this type of issues.  Just make sure that they are not just the fee collectors paper pusher we dont care type.



2011-08-10 3:57 PM
in reply to: #3636387

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Subject: RE: short-sale house : COJ advice?
I went through exactly this two years ago.  Moved across the country for better jobs/better family life/quality of life, couldnt find renters, tried to pay the mortgage and rent at the same time, depleted all savings, and finally ended up short sale-ing our home after it had been on the market for around 18 months.  The bank (first Greentree, then sold to BOA) wouldnt even talk to us until we were three months late on our mortgage.  And becuase we sold for significantly less than we owed, they wouldnt release us from the lien until we paid them almost 20k (borrowed against my retirement).  IT SUCKED!!!  My husband and I are both responsible professionals and we really thought that this would never happen to us.  My primary advice is to be patient.  The process takes forever and is incredibly aggravating and frustrating.  Also, it helped me to know that we werent in it alone - that thousands of people across the country were in the exact same situation and dealing with the exact same problems. I'm sorry that you're having to go through this.    
2011-08-10 6:43 PM
in reply to: #3636387

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Subject: RE: short-sale house : COJ advice?
I'm dealing with a short sale myself right now, and one of the things the lawyer said was to maintain my payments on credit cards and car payments, that way later I can show that this was a decision of necessity and not a choice I took lightly
2011-08-11 11:24 AM
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Subject: RE: short-sale house : COJ advice?
graceful_dave - 2011-08-10 10:20 AM
PeterAK - 2011-08-10 9:28 AM

condorman - 2011-08-10 8:21 AM Thanks.  All good advice.

Last year upgraded my wife's 2005 vehicle to a 2011 Toyota and I just traded in my 2000 Audi on a 2011 Toyota.  So we are set on the vehicle situation.

And as of August 1st, we officially went into "overdue" status - as friends of our did a short sale on their house and wasted about 9 months and 3 offers because the bank wouldn't talk to them about a short sale b/c they had been staying current on their mortgage.  So we knew that we had to be overdue (and take the credit score ding) if we wanted to do this.

Total shame too because we spent 5 years renovating that house from top to bottom, restoring a lot of the original features as the house was built in 1888.

 

Asking for the bank to accept a short sale when you have two new cars in the garage is outrageous.  

Why? Have you tried to sell your house lately?

Yes, just closed on July 15.  I still own three rentals.  One is underwater.  I am paying the mortgage every month.

2011-08-11 11:33 AM
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Subject: RE: short-sale house : COJ advice?
condorman - 2011-08-10 9:49 AM
PeterAK - 2011-08-10 10:28 AM

condorman - 2011-08-10 8:21 AM Thanks.  All good advice.

Last year upgraded my wife's 2005 vehicle to a 2011 Toyota and I just traded in my 2000 Audi on a 2011 Toyota.  So we are set on the vehicle situation.

And as of August 1st, we officially went into "overdue" status - as friends of our did a short sale on their house and wasted about 9 months and 3 offers because the bank wouldn't talk to them about a short sale b/c they had been staying current on their mortgage.  So we knew that we had to be overdue (and take the credit score ding) if we wanted to do this.

Total shame too because we spent 5 years renovating that house from top to bottom, restoring a lot of the original features as the house was built in 1888.

 

Asking for the bank to accept a short sale when you have two new cars in the garage is outrageous.  



Walk a mile in my shoes and then pass judgment. 

?I don't know your whole story.  But, if you are in the red my opinion is that buying new cars is not a good financial decision.???

2011-08-11 11:36 AM
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Subject: RE: short-sale house : COJ advice?
condorman - 2011-08-10 9:49 AM
PeterAK - 2011-08-10 10:28 AM

condorman - 2011-08-10 8:21 AM Thanks.  All good advice.

Last year upgraded my wife's 2005 vehicle to a 2011 Toyota and I just traded in my 2000 Audi on a 2011 Toyota.  So we are set on the vehicle situation.

And as of August 1st, we officially went into "overdue" status - as friends of our did a short sale on their house and wasted about 9 months and 3 offers because the bank wouldn't talk to them about a short sale b/c they had been staying current on their mortgage.  So we knew that we had to be overdue (and take the credit score ding) if we wanted to do this.

Total shame too because we spent 5 years renovating that house from top to bottom, restoring a lot of the original features as the house was built in 1888.

 

Asking for the bank to accept a short sale when you have two new cars in the garage is outrageous.  



Walk a mile in my shoes and then pass judgment. 

I have to say everyone's situation is different but it does raise questions. I have seen to many people who can't make payments but they buy new cars, go on expensive vacations and go out to eat numerous times per week. And we all end up paying for it when people foreclose or have short sales by lowering all our property values.

 

And I should add - I don't think this is the case laid out here.



Edited by RedShark 2011-08-11 11:45 AM


2011-08-11 11:42 AM
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Subject: RE: short-sale house : COJ advice?

Don't know how those question marks got in my prior post...  Not meant to be there!

 

To be clear--I don't fault you for doing what is best for your family.  However, a used minivan would be a better financial decision, and a/c is not a necessity.  I just can't see any way that a new car -- let alone TWO new cars can be justified when you are not repaying money that you borrowed. 

To some of the other comments--borrowing money is a matter of personal responsibility.  Life throws curve balls at all of us.  Job loss, medical conditions, etc. can wreak havoc on finances and family regardless of how finances are handled.  This does not excuse anyone from having to make sacrifice regardless of the cause of your issues.

2011-08-11 12:17 PM
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Subject: RE: short-sale house : COJ advice?

alot of opinions on this and yes, everyone situation is different.  Most of you are too young to remember the crap economy in the mid-80s but there were lot's of forclosures...especially in Colorado with the S&L scandal (Neil Bush), and oil companies moving out of Colorado.  My condo depreciated to about 50% of what I paid while my payment had increased about 25 percent thanks to some fast talking mortgage guy selling me a loan when I was a dumb kid barely out of HS.  Anyway, I could not afford the payment any longer and did a deed-in-lieu, which I believe is similar to a short-sale.  Really I didn't have any issues as I was not big on using credit (didn't even have a car payment).  That is until I got married and went to buy a house.  It was a mess and ended up buying the house under my wife's name.  Since me credit score has recovered but it definately walking away from the home definately had a negative impact on my credit.

I didn't make the decesion to walk away without giving it considerable thought.  I'm sure the OP has done the same.  And there are consequences.

2011-08-11 12:21 PM
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Subject: RE: short-sale house : COJ advice?
RedShark - 2011-08-11 11:36 AM
condorman - 2011-08-10 9:49 AM
PeterAK - 2011-08-10 10:28 AM

condorman - 2011-08-10 8:21 AM Thanks.  All good advice.

Last year upgraded my wife's 2005 vehicle to a 2011 Toyota and I just traded in my 2000 Audi on a 2011 Toyota.  So we are set on the vehicle situation.

And as of August 1st, we officially went into "overdue" status - as friends of our did a short sale on their house and wasted about 9 months and 3 offers because the bank wouldn't talk to them about a short sale b/c they had been staying current on their mortgage.  So we knew that we had to be overdue (and take the credit score ding) if we wanted to do this.

Total shame too because we spent 5 years renovating that house from top to bottom, restoring a lot of the original features as the house was built in 1888.

 

Asking for the bank to accept a short sale when you have two new cars in the garage is outrageous.  



Walk a mile in my shoes and then pass judgment. 

I have to say everyone's situation is different but it does raise questions. I have seen to many people who can't make payments but they buy new cars, go on expensive vacations and go out to eat numerous times per week. And we all end up paying for it when people foreclose or have short sales by lowering all our property values.

 

And I should add - I don't think this is the case laid out here.

I don't think short sales really effect property values.  The property value has already dropped which is what generally results in a homeowner having to short sell.  A short sale is nothing more than a buyer making an offer at the "real" value of the property and the bank agreeing to clear the title for that amount.  Even if the house was owned free and clear the offer would be the same from the buyer because they feel that's what the property is worth in the market.

You can argue that a short sale costs the bank money (because it does) which the rest of us have to pay for.  However, I tend to think of it as a lesser of two evils.  If a bank has to forclose on a property and send it out to auction or find a buyer themselves it costs a ton more money than the original owner listing it and finding the buyer.

2011-08-11 1:54 PM
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Subject: RE: short-sale house : COJ advice?

A mortgage is a contract between you and the bank. It says you're borrowing money for the house and if you don't pay it back, the bank takes the house back. Sounds perfectly reasonable then to stop making payments on the house if it's become such a drain on your finances.

 

One thing I would mention though is to find a lawyer to help you out. I do believe there are some states where the bank can come after you several years later for the balance.

2011-08-11 2:35 PM
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Subject: RE: short-sale house : COJ advice?
JoshR - 2011-08-11 1:54 PM

A mortgage is a contract between you and the bank. It says you're borrowing money for the house and if you don't pay it back, the bank takes the house back. Sounds perfectly reasonable then to stop making payments on the house if it's become such a drain on your finances.

 

One thing I would mention though is to find a lawyer to help you out. I do believe there are some states where the bank can come after you several years later for the balance.

Actually, the note is a contractual promise to repay the money between a borrower and a lender.  The mortgage is a separate document that pledges the house as collateral on the note and accordingly gives the bank the right to take that collateral and use it towards satisfying the note in the event that the borrower doesn't pay a promised.  Neither says that if a borrower gives the house back to the bank that the loan is considered satisfied.



2011-08-11 2:37 PM
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Subject: RE: short-sale house : COJ advice?
PeterAK - 2011-08-11 12:42 PM

To be clear--I don't fault you for doing what is best for your family.  However, a used minivan would be a better financial decision, and a/c is not a necessity.  I just can't see any way that a new car -- let alone TWO new cars can be justified when you are not repaying money that you borrowed. 

I have to agree with this.

 

2011-08-11 3:07 PM
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Subject: RE: short-sale house : COJ advice?
PeterAK - 2011-08-11 12:42 PM
...

To be clear--I don't fault you for doing what is best for your family.  However, a used minivan would be a better financial decision, and a/c is not a necessity.  I just can't see any way that a new car -- let alone TWO new cars can be justified when you are not repaying money that you borrowed. 

...



Thankfully, I don't have to justify myself to you.  And frankly I'm not going to.

The title of this thread was asking for advice on a short sale.  I realize that COJ threads have lives of their own, growing organically.  And I realize that I was at fault for putting personal information into a follow-up response.

But your posts have not been advice and are not even close.

I'm glad that you are in a position that you don't have to short sale a property.  Deciding to do this was one of the most difficult choices I've made in my adult life.  I don't care that you think my purchasing a new vehicle before my credit score goes absolutely south is "outrageous." 

My new car payment is 1/10th of what my mortgage and related costs are for the NY house.  So whether I have 2 new Toyotas sitting in my garage or two used cars, the short sale process would still happen. 

It isn't the situation that if I had 2 older cars, I would still be able to afford sinking money into a house until the market turned around.  Am I supposed to continue paying a mortgage on an empty house for X number of years until the market turns around?  Am I supposed to put every other aspect of my life on hold and keep this financial anchor tied around my neck so that banks who got TARP funds don't have to take a loss on a mortgage investment?

I can't go any lower on the price without a short sale.  And to assume that I could go lower on the price if I just drove older vehicles proves a complete lack of understanding of not only my situation, but the housing situation in the greater New York area.  This isn't a case where I'm going to drop the price $10K and all of sudden I'm going to be turning away offers.  I'm going to have to drop the price probably $75-$100K.  So the vehicles I have in my "garage" are completely irrelevant.

And ironically, the "sitting in my garage" part makes me laugh.  Because in order to pay my mortgage, we've been renting this postage stamp townhouse b/c it has very cheap rent, and my "garage" is a community lot that I share with the hundreds of other people in this townhouse community.

2011-08-11 3:34 PM
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Subject: RE: short-sale house : COJ advice?

One other thing - make sure that you have a good real estate agent.  Someone is going to have to spend hours on hold on the phone with the bank making sure that the bank has all the paperwork, resending the paperwork when they cant find it, resending a second set of originals when they cant find what they need again, and on and on and on.  Our realtor did a lot of this for us.  When it's your house and your finances you (or I) tend to get too emotionally invovled and things go south quickly when you lose it on the phone.  And you just need to look at your mortgage like a contract.  And contracts are broken all of the time and the consequences for breaking that contract are built in to the contract.  If you look at this as a business decision without the emotion, then its so much easier and makes sense.

You're an attorney (right?) so you should be able to get some basic legal advice quickly about the laws of NY, how many years the bank can come after the deficiency, that sort of thing.  If possible, negotiate the deficiency away in the short sale docs.  BOA wouldnt do that with us (I think it depends on how big the deficiency is) so after the sale we still had to take another step and get rid of that.

Elizabeth

(One other thing, we also upgraded my husband's car right before we went into default on our mortgage.  Like your situation, it simply wasnt going to affect our overall financial situation.)   

2011-08-11 4:43 PM
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Subject: RE: short-sale house : COJ advice?

No need to justify your actions to anyone other than yourself. 

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