Planner's Daughter

I am the first born child in a row of three.  My dad spent his career as a planner for the county of Nevada, in California.  I think it is my lot in life to be a planner.  Sadly, I plan out of fear, and have terrible attention to detail and terrible follow through.   This is why I have Silas.  Silas has silly ideas like inventions that don't do anything useful: a compost taker-outer is a good example (to his credit, he can be imaginative, I am just more-so).  Together, we seem to be yin and yang. I have better ideas, he has the ability to make better ideas work.

Here is the timeline, in terms of planning, thus far:

2006:  Move to Nevada City, buy a modest house which we can afford, even though they are really expensive and sparse.

2008:  Replace the roof with steel, build an addition, put in a wood stove and woodshed with savings.

2009:  Pay the mortgage as housing prices drop.  We start to question the safety of our real estate investment.  We start asking questions and having ideas/hesitations.  We call our lender and ask for a modification.

Dec 2009:  Try to refinance to get a better interest rate on our home loan.  We discover in the process that we are so underwater that we can not refi without bringing more money than we have saved in our lifetime to the table. We called our lender to ask for a modification but alas, they could not help. 

Jan 2010:  Research!!  We met with our realtor, we paid for a visit with a real estate lawyer, called the lender asking again for a modification, worked the numbers on a spreadsheet for every scenario we could think of, called the lender asking for a modification, talked to folks who had dealt with modifications, talked to our parents, talked to each other, talked to friends, talked to God, talked to the lender, made check-lists, and thought about it.

Feb 2010:  Called Citi Mortgage to ask them to stop the auto pay on our mortgage account.  As it turns out, auto-pay at Citi Mortgage is like Hotel California, you can check out anytime you like, but you can never leave.  I had to get my bank to refuse the draft from my account, as Citi Mortgage does not let you stop paying your mortgage automatically in the same month as your payment is due.  It worked and we missed our first payment.

There are many things that could happen to us because of our choice to short sale our house.  We may not be able to short sale the house, and have to foreclose.  All of the outcomes are somewhat negative, even if we stay in our house.  We have been thoughtful and careful so far in our lives, and this seems more risky to some, but to us, it seems sensible.  All the numbers, for the short term and the long term, point to renting, and buying another home when our credit is good again.

We have been very open to the mortgage company being the hero in the story, we call and ask for help often.  I don't think "mortgage company" and "help" can be in the same sentence (their choice).

I know it may seem, if you started reading this blog on Monday, that we just thought of this idea this week, though we have been working on it a while.

While We Still Have Today

This simple lesson repeats itself for me:

Enjoy what you are doing, where you are, and who you are with, right now.  

I don't mean, "at this time in your life",  but even as you are reading this.  I must need to learn it more than I realize.  It is helping me make informed choices in regards to home ownership (as well as more touching and personal things).

I love my house, because it is my home.  I do not want to make any choices about my house, and mistake the choice for a decision about my home.  My family, and my memories, are what make this place, my home.  The structure is temporary.  This has freed me from a bit of fear I have about leaving this place, when I realize what I am leaving is a thing.

I also am enjoying my things in the moment.  This is a sunny corner of a room many folks contributed to, including myself.  I want to remember how it felt to work and love and play in this corner, and take that with me when we leave.

It Is Well.....

Today, we have missed two mortgage payments.  Now that we are into month 2, all is well.  We may even have a buyer.

I feel a bit sorry for the buyer of this house, not because they are not getting a deal, but because they will have to work with Citi Mortgage to buy our house.  Once they make an offer, we are out of the negotiations with the buyer.  It will take at least 90 days to work out the paperwork.  We will need to petition Citi for a short sale.  This entails more paperwork, and a letter asking for a short sale, because of our hardship.

Here is the problem, and reason number one, that this may not work.  All is well.  This is where one of the many double standards comes into play.  Our financial hardships are at a minimum, except that our house is SOOOOO expensive.  Clearly it is more expensive than is reasonable for us.  The mortgage institutions extended themselves with fraudulent lending practices, driving the price of real estate up.  When they pushed it beyond what was reasonable: collapse!  They had to essentially write a hardship letter to the federal government.

Unfortunately I am not afforded the same grace that the mega-corporations are.  If I bought a yacht, a new car, designer clothes, and then came to the bank to say I am having hardship, they would say, "too bad".  If I came to the bank and said, my house is too expensive, and hadn't pushed the limit of what I can spend, they still say, "too bad".

Though it is well with my soul, I can't afford my house.  I can't afford my house if I intend to pay for my children to attend college, if I intend to continue to make improvements on this house, and if I intend to drive safe and reliable cars.

Since there is no one to bail me out, I guess I'll have to figure it out on my own.

Strategic Default Savy

I read a great paper entitled, "Are you a Woodhead?" and it is dozens of pages long, but this basically sums it up. The example could be us.

Strategic Defaults and the Foreclosure Crisis - US News and World Report

Posted using ShareThis

Also I would like to point out the irony of the ads, to the right.  I'm thinking you should not click on the adds, but that is just me.

Mortgage Company: Play by Play

Yesterday I wrote that I felt like the mortgage company was playing a game.  When you talk to them, it is a rather scripted game, but what good team doesn't have a playbook?  The more I thought about it, the more it was a soothing analogy (soothing might be the wrong description, I don't know exactly how I feel about it, wait, there is no crying in baseball, it doesn't matter how I feel).

I guess when the real estate market collapsed, I was rather cavalier about it (judgmental, ignorant, uninformed).  I was not going to play by their rules, and was rather proud that I had stepped out of the game.  Countrywide and Washington Mutual could do what they do, and I could simply be a spectator.  I imagined that when I am old I would own my house, and it would be something of real value, the cold, hard, game numbers say otherwise.

Though I felt  I was sitting on the sidelines, I was actually also playing for the other team.  Since The Bank makes the rules and has a playbook, it makes it difficult to realize you are playing, but you are.  If you don't realize you are playing, how can you win?  I can imagine it's like playing Scrabble with a pre-schooler, and then if I start to slip, taking money from my dad to give myself a bonus.  I can't lose, I have to win.

Bank, I wanna know what the strategy is behind calling daily, and hanging up.  I have caller ID, I know it's you!  I'm going to call that move 'The DrunkDial'.

Trapping the Credit Fairy

I don't buy things I don't have the money to buy.  A part of it is that I am rather cheap (I prefer frugal) and the other part is that I'm having faith that things are going to work out.  To be honest I've never wanted something so much, and I haven't ever been faced with enough financial difficulty, that I would use a credit card, or borrow from a bank (with one HUGE exception).

This puts us in an odd situation because credit is valued so highly.  We say we don't use credit, and then we live like it's valuable.  It actually was valuable enough for us to continue paying our mortgage long after we felt we should.

Later, we came to our senses.  So what if our credit is bad?  Are we bad people?  When did our credit score become important?  This is the point I am trying to make.  I operate in the world of morals, ethics and relationships, the financial institutions we use do not.  Their bottom line, is the bottom line.  They are playing a different game, and I am not playing around.  Why would I feel bad about having bad credit?  The answer is easy:

http://www.creditfairy.org/

Check out the propaganda on this site!!  You may have seen some of their commercials on TV.  Who is the Consumer Bankers Foundation?  Be sure to read the fine print like they suggest on the site, especially take note of the "about us" at the bottom of the page.  My lender is on that page.

Once I realized I'd been influenced by social pressure from financial institutions, I felt free from the feelings of guilt (okay, I felt stupid too).

After we worked out the moral implications of not paying our mortgage, we headed to the lawyer.  I'm fine with morally justifying it, but that might not hold up to the IRS!!

Note:  The happy-married-white-male-laptop-owning-business-executive-plastic holding-man-photo is swiped from the Credit Fairy site.

Gettin' Snarky with Susan from Citi Mortgage

Our house has been on the market for 6 weeks, and we have not paid our February mortgage payment.  Our house was listed initially for the amount we owe.  This week the price dropped tens of thousands of dollars and we had 5 showings.  I think we will have an offer soon.  I didn't expect it, but that is my hunch.  I am kinda a hunch person.

It is our intention to sell the house for what we can get for it, then petition the mortgage company for a short-sale.  This means that the difference between what we owe, and what the house sells for, is basically gifted to us.  The bank will receive the difference in funds from the Federal Government.  There is no way they are going to loose money on the deal, though it was fine for me. We can walk away from the house, and not owe the bank anything, starting over.  The only downside is credit scores.  Ours will go down (this is fodder for my next blog, credit scores).

Friday I called the mortgage company, actually I called them back.  It was the first time I've talked with them when we have not been paying our mortgage.  They told me now was my big chance to get current, before March.  I told them that I had no intention of paying my mortgage anymore, and that our house is for sale (I told them nicely, and calmly).  They transfered me to Susan in the Short-sale dept.

She gave me the info I needed for the sale, and then I asked a question.  Is there any way possible for me to keep my house with modified arrangements?  She said no, not if we are not going to pay our mortgage, which is funny, since months ago the answer was the exact opposite.  The bank couldn't help modify our loan, because we were paying our mortgage.

She then informed me that buying a house is an investment (huh?).  If my house was worth more than I owed, the bank wouldn't charge me more.  I then told her I was so glad that we had the option to default on our loan so that they can have their devalued investment, and we could start over.  I didn't hear much on the other end for a moment.  I was so nice.   Thank you Citi Mortgage.