Wednesday, May 28, 2008

Financial troubles will lead to affair

I can tell that my wife and my landlord are going to have an affair. He came over here yesterday at lunch time - she told me - to bring over some envelopes and stamps for our rental payments. My wife only gets 30 minutes for lunch so the timing has to be pretty focused. I was out of town on business so it allows them time to get more familiar with each other.

Besides, when he's been here a couple times I can see the eye contact between them. It makes sense - all I have to offer my wife anymore is my salary. I dont own a home anymore. I dont have any savings anymore. After 22 years of marriage and two kids all I can offer my wife is my salary plus bonuses. I've been financially decimated. All she ever does now is make comments about how she wishes we were rich. I'm trying as hard as I can to keep it together.

Our new landloard is about the same age as me and we actually have a resemblance to one another. Plus he's happy and likes to make jokes. Why not? He doesn't have any financial problems like me. Heck, he owns this house plus more. And he's financially stable. He can offer her a future, I cant anymore. She can depend on him not me. Twenty-two years ago I had a lot to offer a woman - a stable marriage, a dependable man, steady employment, financial upside. we even prospered for a while. I never strayed, I even turned down a couple of women co-workers. But now I'm in my early fifties with only my paychecks to offer a woman, much less my wife.

She's already told me she cant count on me. She doesn't trust me. All I've ever done was try to provide for my family. I just try to make ends meet. She wanted to live in a brand new house fifteen years ago and I did it. She wanted a mercedes-benz and I did it. Not much more to say.

I know her sisters will support her. In her family blood is thicker than water.

Sunday, May 25, 2008

Paid In Full and Credit Report after Short Sale

Someone asked me a question about this. Here's my reply:

You must have your realtor request that your 1st and 2nd mortgagors give you a letter stating that your account has been "...Paid In Full." I think "Account Settled" is also just as good but you would need to speak to an attorney about that. If you can, get them to also state in your letter something along the lines of "No balance due." and maybe something about they "release all liens".

I pulled my credit reports: TransUnion, Experian, Equifax.

Experian shows this for both my 1st and 2nd:
Payment Status: "Legally paid in full for less than the full balance"
Comments: "Election of remedy - reported by subscriber"
(also lists it as a "Key Derogatory") shows my 1st as "Improved account" for TransUnion shows my 2nd as "not yet reported" the change to TransUnion shows my 1st as Settlement for Experian shows my 2nd as Settlement on Experian

TransUnion lists the Condition as "Derogatory" for the 1st but Pay Status is "Current"
Experian lists the Condition as "Closed (Paid)" for the 1st and no Pay Status.
Experian also shows it as a CO - Chargeoff.
Equifax lists the Condition as "Closed (Paid)" for the 1st and Pay Status as "Current"

TransUnion lists the Condition as "Derogatory" for the 2nd but Pay Status is "Late 120 Days"
Experian lists the Condition as "Closed (Paid)" for the 2nd and no Pay Status.
Experian also shows it as a CO - Chargeoff.
Equifax lists the Condition as "Closed (Paid)" for the 2nd and Pay Status as "Late 30 Days"

I closed (recorded) two weeks ago but my realtor is waiting for Title company to send the official letters from the mortgage companies to them so that they can in turn send them to me. But I did call my 1st mortgage company and the loan servicer of my 2nd (a mortgage backed security sold by Wells Fargo but loan serviced by GMAC) during the the process of closing and they both told me I was Paid In Full. My realtor has the letters but is waiting for more paperwork from the Title company before forwarding on to me.

Since I can see it listed on my credit reports as Paid In Full I'm not worried about any collection agencies coming after me. I will need to file a Form 982 with my taxes next year to show I am Insolvent. Anyone that reviews my assets (zero) and liabilities would see that I am going to be insolvent for the next 3 to 4 years.

(5/27/08 Tuesday 6am PST - And with the way my life at home is now going I may be heading toward divorce in a year. I told my wife that I really don't think we're going to have the proper debt-to-income ratios in a year - I think we're really going to be renters for at least two years; I still have so much debt to pay off. She's going to open up her own checking account and then have her paycheck direct deposited into her own account. She said she was watching Dave Ramsey last night and she needs to take ownership of her own life. And I think intimacy between us stopped last week. We had a bad weekend talking about finances. It's awful this has happened to us - next month is our 22nd anniversary and she and I had talked about going to Vegas but that's not going to happen now. Basically she married the wrong person. It's funny, I think what will probably happen is that she'll end up marrying our landlord. He's funny, happy and rich. It's probably easier to be happy and funny when you're not worried about money all the time.)

Good-luck with your short-sale and let me know how it goes.

Monday, May 19, 2008

Another Neighbor house selling for less

The neighbor across the street and three houses down dropped their asking price to $425K. They had been asking $499K. And back in November they were asking $625K!

My wife and I looked at some houses last weekend just for entertainment. We looked at a house that was 3774 sq.ft. and the realtor was asking $370K! It had ALL the upgrades that my wife likes. It was way better than our current house. Of course it was a foreclosure, no furniture, just an empty house.

We drove down another street a couple blocks away and that street had five out of ten houses for sale with brown lawns on three of them and red pieces of paper (Notices of Default, NODs, eviction notices, etc.) in the windows. All of these houses have three-car garages.

Anyway, we're going to rent for another year and try to save some money and pay off bills in the meantime. I kind of doubt my debt to income ratio will be under 35% next year since I'm on year two of a five year debt repayment plan with all my creditors. Well at least I can sleep at night.

Friday, May 16, 2008

Tax Rebate check received

We got our $1200 rebate check today! But after all my bills I now have $1900 in my checking account. So the rebate check definately helped us and has helped to create a little bit of a safety buffer. $1900 sounds like a lot but I am supporting four adults plus a young Marine who lives with us part-time. He never asks for money but I help him out when I can with gas - it's so expensive for him to drive from the base to our house. Takes him almost an hour each way.

I also had to pay $535 for my auto insurance policy today. I'm insuring four cars now. I'm definately glad to have that fourth car in the family. It sure helps me with my job - especially this week when I needed my car four days this week for work.

So when the government wonders what happens to rebate checks mine will go towards bills and living expenses. Just a band-aid. But I worry about this getting added to the national debt and future generations of Americans having to pay for it. I dont see how our national debt can ever be repaid. I dont see how the U.S.A. can continue to go on as a spending nation and not a saving nation. I think I read that two-thirds of our GDP is made up of consumer spending. What's going to happen to the GDP when people stop borrowing and spending so much?

Check out and download the MP3 file about "The Giant Pool of Money".

"The Giant Pool of Money" - "A special program about the housing crisis produced in a special collaboration with NPR news. We explain it all to you. What does the housing crisis have to do with the turmoil on Wall street? Why did banks make half-million dollar loans to people without jobs or income? And why is everyone talking so much about the 1930s? It all comes back to the Giant Pool of Money."

Property Taxes paid off

I checked the web site for my (one month overdue) Property Taxes and they were paid off through escrow. So it looks like we officially closed our short sale.

Monday, May 12, 2008

1st Mortgage received payoff

I called and verified that my loan servicer for my - used to be my - 1st mortgage received a payoff check. I'll still keep checking with the county recorder to make sure there wasn't a problem with title transfer - I dont want to make rental payments on a house that I thought I sold. I'm just a little paranoid that's all.

The customer rep I talked to said that I might still get some phone calls from their collections department but not to worry. He said that one department doesn't know what the other department is doing - such as processing my payoff. He said that they're behind in their processing because they are swamped with so much pre-foreclosure activity lately.

Saturday, May 10, 2008

Neighbor House selling for less

My wife and I were driving back into our neighborhood today and we noticed a new For Sale sign had gone up on a neighbor's front lawn. Same house as ours but without a pool and spa. We stopped and pulled the flyer and guess what - they are asking $399,900!

That's $50,000 less than what we sold our house for!

And we sold our house two months ago. That is, we closed/recorded yesterday!

(There's still another neighbor's house asking $499,900 that is just across the street and three houses down from us. But they've been on the market for almost a year in which time they've dropped the price of their house down $100,000. I checked the County Tax records online and saw that they haven't paid their property taxes in over a year. Then again they also moved out about 7-8 months ago and their front lawn has turned brown.)

So prices are still falling in our neighborhood. I was also able to lookup on the County Tax Collectors web site if the new house for sale property taxes had been paid and sure enough - they hadn't paid the last two previous payments due. They are behind by one year in their property tax payments. And, by checking their last assessment value against their asking price I see that they're asking about $186,000 less than what they paid for it 3 years ago. I had seen a mention of their house being a Short Sale on a realtor's web site I visited about a month ago but now I can't find that same web page.

I doesn't seem right that anyone can view another person's payment history with respect to property taxes. But I found out from another web site on how to view the payment history and ownership addresses for properties using public records that the County Tax Collector and County Assessor put up on their web sites. This information will help me to determine if the purchasers of my house did actually record at the County. I've heard stories of people who supposedly "sold" their house to someone else and then made rental payments to the "supposed new owners" only to find out later that they were victims of a scam, conned out of "rental" payments and still the owners of the house they lived in which they thought they had sold.

So I'm going to keep checking next week with the County Recorder about when/if our new owners had changed title. Actually I'd better check with my mortgage companies. I'll put that on my ToDo list.

Here's the process I use to verify who owns a house and whether the Property Taxes have been paid:

1) Start here:
Search by address
2) Get the assessment's parcel number of the lot
3) Then go to here
and enter the parcel number in the assessment box and click ok, followed by the view tax info button on the next page

You'll have to find your County web site addresses.

Friday, May 9, 2008

Short Sale - Recorded!!!

We are done!!!

I am so relieved! Our short sale recorded yesterday. We avoided bankruptcy. We avoided foreclosure. I no longer have this huge mortgage payment to worry about and to lose sleep over!

I can finally start to plan again for the future. I can finally start to live within our means. I can finally start to live within a budget. Thank God.

I still have a lot of high balances to payoff on my credit cards but at least the payments are within my budget.

I'll continue to make posts on our progress to update anyone interested.

Wednesday, May 7, 2008

Credit Report - Settled accounts and Balance Liquidation

I did "settle" with American Express - after it had gone out to a Debt Collections Agency - and this is what shows up on my credit report (I use to view all three reports):

[TransUnion] Payment after charge off/collectionSettled - less than full balance
[Experian] Account legally paid in full for lass than the full balance.Account legally paid in full for less than the full balance.
[Equifax] Settlement accepted on this accountPaid charge off

And this is what shows when I enter a Balance Liquidation Plan with a Chase credit card:
[TransUnion] Account closed by consumer
[Experian] Credit line closed - consumer request - reported by subscriber.
[Equifax] Account closed at consumer's requestCredit card

Tuesday, May 6, 2008

2nd agrees to settle for $5K!

My realtor called me today with great news. He said that they now have all the letters and paperwork that they need to complete our short sale!

The buyer should fund on Wednesday and then we should record the title transfer on Thursday or Friday!

I will finally have a budget I can afford - house rent, credit card bills and living expenses. Thank God for helping me to swallow my pride and put our house on the market. And thank God for bringing me a buyer of our house!

Monday, May 5, 2008

Interest rate lock extended

My buyer asked/requested that my realtor pay $400 to them to have their interest rate lock extended. I offered to pay $200 towards having my buyer's interest rate lock extended - I dont want to lose a buyer over such a small amount of money.

My realtor emailed me back and said that the buyer extended their interest rate lock. I think their lock was for something like 5.2% or 5.4%, somewhere in there. They will be reimbursed somehow when the deal closes.

So we're back to waiting for my second lender to approve the $5K acceptance instead of the $14K that they had stated in their letter. My realtor assured me that they will comply with their original, verbal $5K offer.

Thursday, May 1, 2008

Short Sale snag

Well, it looks like my second mortgage holder, GMAC, is holding up my short sale. They had verbally agreed about a month and a half ago to accept $5K from the 1st lender to settle our account and now they've sent a formal letter stating that they'll accept $14K. This mixup might cost me the sale of our house. It has been almost 60 days now since my buyer made their offer and their interest rate lock expired yesterday.

The buyer is now mad that they have to pay additional money to extend their rate lock. And, we have to wait for GMAC to hear back from the investor (mortgage backed security) who holds my 2nd on whether they will accept $5K as a settlement for the loan.

So I may lose a buyer and I might have to relist my house again. We have come so close to getting out of these two mortgage payments without going into foreclosure or bankruptcy. Now we are in a wait and see mode again.

I'll keep you posted on what happens. Hopefully I'll have good news soon.