Disclaimer: I am not a lawyer. I am
only publishing my interpretation of my situation. You should seek your
own legal representation for your own particular
situation. Do not rely on my
opinions or statements for your own purposes as state
and local law varies as do individual circumstances.
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I tried to buy a new house. While this happened about
seven (7) months ago, I have yet to discuss it here on
ShortOnChange.com since I launched this website after that
happened. It is still an interesting story that I feel I should
mention. The story has some points about it that you might be
able to apply to your own situation.
I stopped making my
mortgage payments in November of 2007. I had started worrying
about where I was going to live even before that since I knew
there would be no way to save my home. I had a few options:
I could move into one of my other smaller and cheaper
properties; I could move in with friends or family; I could rent
an apartment; or I could buy another place that I could afford.
Unfortunately, all of my other properties were either rented to
someone on a long-term basis or too small or going back in
foreclosure the same as my home. This ruled out moving into one
of my other properties. After Hurricane Ivan destroyed my home
in 2004, I lived in spare bedrooms and on couches of friends and
family for over a year. That was awful on me and my friends and
family, and I needed a much longer-term solution. I could very
easily rent an apartment, but the idea of going from owning
multiple homes to renting seemed devastating to me at the time.
I decided to look for a new home that I could buy that would be
affordable and with room enough for the furniture and belongings
that I would need to move.
Finding a new home is a
daunting task. You first have to find the home. Then, you have
to make an offer on the home and inevitably (at the time) haggle
with the owners. Then, you have to arrange for financing of the
property. You have to close on the property (take title); and
then, finally, move into the property. I made it almost three
fourths of the way through the process. I never made it to
closing, much less moving.
The home I found was a
charming two-story brick townhouse in a very desirable section
of town. It had a one-car garage, a very open floor plan, plenty
of windows, dramatic woodwork throughout the interior and a six
foot brick fence encircling a beautiful garden that wrapped
around the back half of the house. It was perfect, and I had a
contract to the owners the very day that I looked at it. That
was the last part of December.
After sending the
contract back and forth a couple of times, the owners and I
finally agreed upon a sales price and closing fees. It was a
very good deal for me as the property had been on the market for
several months, and the owners were now anxious to be done with
the property as they had bought a new home in Atlanta and
maintaining their old home was a burden. Even before the
contract had been signed, I had a mortgage broker working on
financing for me. Surprisingly enough, financing came back
pretty easily. My credit score, although I had plenty of debt
with all of my other mortgages, was still very high as I had a
high income and very little debt outside of real estate. Things
were moving along very smoothly.
As we got nearer to the
closing date, my mortgage broker called me up. Apparently, the
mortgage broker had to pull my credit report a second time
closer to the closing date; and, by then, I had two late
payments on two mortgages showing up on my credit report (Of
course, I knew these where coming soon but had hoped to close on
this house before they actually did show up). In order to keep
the financing on this new house, I was going to have to pay up
those past due mortgage payments and write a letter detailing
why those had been late and provide proof that the payments had
been paid. Obviously, that was not going to happen. It did not
take too long after that for the financing to be withdrawn. The
contract was cancelled with the sellers. I could have gotten
back my $1,000 earnest money as it had been contingent on me
successfully attaining favorable financing, but I instead wrote
the sellers a nice note turning the money over to them as I felt
bad that they had moved furniture out of the property and gotten
their hopes up in anticipation of me buying the house.
As things turned out, I
eventually moved into a rental condo on the beach not far from
my home. I could, and still can, watch it from my balcony on the
7th floor here. It is now August, and the house has still not
been foreclosed. I could have lived in the house this entire
time without paying any mortgage payments, but I moved out about
April as the idea of waiting for the sheriff to show up and lock
the doors was a lot of stress on my nerves. Moving out was a
great stress reliever. The point to this story is, though, that
I went ahead and took charge and tried to do something instead
of wait for the foreclosure to be final and then worry about
finding a place to live. I do hate that I did not get that house
as I think it would have been a very good home to hang onto for
the next ten years. Instead, I am back in the rental economy.
That is not all bad though. I am living far better for far less
than I was a year earlier. Renting is not all bad.
I encourage you to
actively evaluate your situation and your options and then act
on your decisions. Do not wait and let other people (lenders,
banks, mortgage companies, courts) decide what you should do. It
will be a great relief to you and your family.
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