Still debating, short sale it or what?

Funny. One year ago we were in contract to buy a short sale. Everything was falling into place, we got loan approval, we found tenants to rent our home, all was good.

In just twelve short months they closed our office in Las Vegas, forcing us to either relocate if we wanted to stay with our employer or try to stay in Las Vegas and find employment in a market already beyond tapped. We reviewed our options and decided to relocate.

All in all, not a bad decision. However, in the six months since we have relocated my husband has taken a 75% pay decrease. It isn't because we relocated, really, there are a combination of factors involved. First of all, our co-workers that didn't relocate stayed in Las Vegas and opened up a new division of a competitor. We knew we would lose business to them, and although we don't know exactly how much business we have lost to them we can only guess it has been significant.

Second, the regulatory changes that hit the industry on January 1st of this year have really made a dent on how long it is taking to get loans to the finish line. More regulatory changes are in effect beginning July 1st and we have begun to wonder after those are implemented just how many people will be left standing.

The big thing for us is the morality of having to short sale a home. We didn't buy a home that was over our means. We weren't tricked into a loan product that we didn't understand. We bought that home five years ago and have remained conservative with our use of credit. We aren't in over our heads as far as some of the stories you read about people overextending themselves and then walking away. The sad thing is just that we have lost nearly 75% of my husband's income in the last 12 months. Considering he is the breadwinner, you do the math. We have also continued to make the payments on that home every single month even though it is putting us 4k in the negative. (Originally I calculated it as 5k but after recalculating we are lucky, it's only 4k).

I never got the fax from the first lienholder when I requested it so I called back. When I got someone from the loss mitigation department on the phone he told me that they never fax "work out" packages and he didn't know why the first guy told me he would do that. He also made a comment that angered me. He said "I can see your loan is current. I don't even know why you are calling us."

Well.

Our loan is current because we are going into the negative every single month to fulfill our financial obligations. We signed a note saying we would do that. However, we cannot do it indefinitely and we want to review our options. I asked him about discussing our situation with someone there to see if we would even qualify for a short sale and he told me that wasn't an option. Apparently they will not even review your workout package until you are at least 30 days delinquent (hint, stop making your payments so we can work with you) and also contrary to what the first person told me when I called, I cannot submit my package without a purchase contract.

So that puts us in a catch 22 position. We would have to list our home for sale and stop making the payments just for them to consider if they would work with us. And if the answer is yes, then great, it would maybe work out. But if the answer is no, then we have not only wrecked our credit but have also put our tenants to the streets.

We are considering marketing the home as an investment property with tenants, but even short saling it, you tell me who is going to want a 450k investment property right now?

My heart is just broken over all of this. My morals are telling me to just keep draining everything I have until either the market improves or our income improves. Neither of those options are looking likely in the near future. My heart is telling me that we have a family living in that home that has cared for it better than we have- they have even landscaped our courtyard that I could not convince my husband to do anything with. They deserve to live in that beautiful home and keep their children in one place. My financial sense is telling me that if we continued to deplete all of our resources to keep that sinking ship afloat we may wind up losing more than just that house. We have two kids to raise ourselves and the cost of childcare is not cheap. Not to mention, just a few minor emergencies and we could be living beyond our means in a hurry.

So here we are, a few weeks later, and we still have not made a decision if we are going to keep the house or pursue a possible short sale. Having been on the other side of the short sale fence just one year ago I just don't know if I have the patience to go through it again. Decisions must be made in the next couple of months though, so I will keep you updated.

I can't believe I am even in this position

With the last four months being, well, worse than we can ever remember in our lives we are seriously reviewing our options as it comes to our house that we retained in Las Vegas.

Where do I really begin?

We have tenants in our home, kind tenants that we absolutely love. We know they are taking good care of our home. We feel responsible for their family as well as ours, knowing that they have been through the wringer when it comes to housing. First they had a bankruptcy due to their self employment situation. Then the home they were renting went into foreclosure and the owner didn't even have the decency to tell them what was going on. They found out by accident. Without a doubt they probably check the recorders website every single week wondering if we are going to do the same thing to them.

But the last four months? Not so good. We are going $5000 a month into the negative just covering our expenses. You have to imagine, that can't last forever. So each month we think, "Next month will be better." Each month, not better, and no end in sight.

I was speaking with a coworker the other day whose mortgage is held by the same company as mine and she told me that she recently did a short sale. The line of reasoning was that her employer moved more than 50 miles from her home and it was a hardship to her. I am wondering, does that count six months after the fact?

I mean, they closed our office December 31st. We have sustained as long as we can, but I just can't see us tapping any further to make ends meet, especially considering we have no idea how much longer this is going to take. The thing is, I just can't bring myself to really do this. I just don't know how I am going to give up like this.

I made the call to the lender. They told me they would fax me the short sale package within 30 minutes. It never came. If this is any indication as to how this would go, I think maybe I should just put it out of my mind right now.

The End of the Road

I realize its been FOREVER since I have posted an update. (This is East Coast Jenn, BTW). I think I told you that our short sale offer fell through because of BoA's ridiculously long short sale process. The buyers finally walked away...and 3 weeks later, the bank came back with a response. Of course, by then it was too late. We kept the house on the market, but never had any more offers. Finally around Christmas, feeling like we were out of options, we decided to start the process of getting approved for a Deed in Lieu of Foreclosure. For those of you who don't know, its where the bank will accept ownership of the house as payment for the mortgage. It is a little better (not much) on your credit, and keeps you (and the bank) from having to go through a long, drawn out foreclosure. There is a pretty involved approval process...we had to supply them with detailed financial information, a hardship letter explaining why we had to go this route, and other miscellaneous personal info. After a few weeks, we heard back. The bank said they would accept the offer, but they wanted us to sign a promissory note for $35,000 over 25 years. Basically, we would lose even MORE money on the house. I understand why they wanted us to do it...after all, they are taking a loss. However, if we did have the money, we would have given it to them long before!! We negotiated back and forth, and finally settled on a lower amount. I can tell you though....we did the giving and they did the taking! We finally got word last night that the deal would be approved, and guess what?? We have three weeks to get the heck out! They wanted to give us TWO WEEKS! I told them there was no way we could be out that fast, so they said three, max. So, now I am in panic/crisis mode. I have to get this house packed, find a place to live, and try to get our taxes done so that we have a rent deposit, all while being pregnant and raising 1 year old twins!!!! CRAZY!
I have to say though....as hard as this has been, and will be over the next few weeks, I am glad that the end is in sight. This has caused no shortage of stress around here. I will be glad to get moved and settled somewhere. I will do my best to try to keep you updated, even though my situation no longer pertains to a short sale!!