Thursday, October 13, 2011

And the Hits Just Keep on Coming...

If you've been keeping up with my story, I left off discussing the beginning of the end for my condo.

With my plea for assistance rejected by the bank and the funds in my savings account approaching zero, I had to think of Plan C: What should I now do with my mortgage?  Short-sale?  Foreclosure?  These terms both carry such negative connotations and I've never been accustomed to NOT paying my bills.  The anxiety grew within me.

After researching my options of short-sale, foreclosure or bankruptcy, I decided that my best course of action would be a short sale.  Sure, my perfect credit would take a hit, but I'd be able to get the burden out from under me and I'd help the bank recoup most of the loan.

It was a big surprise that within the first 4 days of putting my place on the market, we had not one, but two offers.  The second buyer knew we had another offer coming in so they even bid ABOVE the listing price!  This was great.  The bank would be thrilled not to lose so much!

Weeks went by and from all indications, everything looked like it would work out fine.  At the last minute, however, the Loss/Mitigation department contacted me to inform me that they were willing to approve the short sale, but would still sue me for the difference.

Huh?  That's not a short sale.  In a short sale, everyone walks away a bit bruised and that meant that the bank was going to lose a bit of their money and so would I, along with my credit.

Now this is where critics of my story lament about how I had a contract with the bank and should pay the bill for which I signed my name.  Normally, I'm all for people paying their bills as promised, but there are times when people just can't.  When the well is dry, there won't be any water to drink.  So if you want to scream at me over and over in the comment section about what a terrible person I am, I've already heard it....and I'm already over it!

But I digress...we'll discuss this topic in more detail in a later post.  Back to the story.

photographer unknown
I told Hope, my friendly (not) Loss/Mitigation Rep, that this was not a short sale.  She laid down the law and I could either accept it or not.  So, I told her no.  I asked her how it made sense from a "mitigating your loss" prospective to now put me in the position to allow the place to go into foreclosure and file for bankruptcy on it.  They had an amazing offer on the table, especially considering the market at the time.  I asked how it made sense on her end to force my next move, foreclosure.  Since I was still unemployed, I would be allowed to continue living there until the foreclosure process was over (typically 15 months).  That meant at least 15 months without a mortgage payment for them, PLUS they would be responsible for property taxes.   What's more is that they would have to price the place WAY below market value as a foreclosed property, thereby losing even more money.  Pretty insane, right?  Remember, they had an amazing offer on the table that only had them losing about $45,000.

Hope then said to me "Well, you don't understand how the system works.  We'll just bundle it with other loans and sell it on the open market, making more money."  I stopped in my tracks!  I was flabbergasted!  I challenged her with "Are you telling me that you continue to use the same toxic practices that put us in this mess in the first place?"  Her response, without any shame was "Yes!"

Once again, if you feel compelled to criticize me for my actions, please re-read the paragraph above.  A financial industry that created this mess by selling toxic loans on the market, thereby creating a huge economic mess around the world, admitted to me that they were continuing these practices, despite the terrible press in the news about it! 

So that's what happened.  I called off the short sale and met with an attorney to begin the foreclosure and bankruptcy process.

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