I have few questions here for you … to gain a complete understanding of your then-situation …
1) What what the total amount forgiven in your (2010) “short sale?” Did you only have ONE lender at the time of closing your “short sale?”
ANSWER: $124,000, one lender
2) Did you purchase the “shorted” property in 2003 with one mortgage only or two mortgages?
ANSWER: One lender
3) What was the percentage of your downpayment in 2003?
ANSWER: 0%
4) Was your purchase-money mtg (orig 2003 mtg) a VA, FHA or conventional mtg?
ANSWER: Conventional
5) Was your “shorted” mtg a VA, FHA or conventional mtg?
ANSWER: Conventional
6) How many actual times did you refi this property? Do those times include the time you took out the $15K 2nd TD which you state you used for improvements to the property?
ANSWER: Twice, yes
7) What was your FICO score at the time you purchased the property you sold short?
ANSWER: Don’t know for sure, was really good then, 30 years old with 12 years credit history
8) Since you state your (current?) FICO score is in the “low 700’s,” what (fixed) rate and terms do you think you can expect to obtain today if you were to try to obtain another purchase-money mtg?
ANSWER:today, nothing, we still are only 18 months from the short sale, so don’t expect anything yet. I have heard three years after for FHA, unless we have 20% down.
9) What is your current price range for a new home?
ANSWER:$400-$500K
10) What type of mtg do you now hope to qualify for to purchase a property today (ie VA/FHA/Conv)?
ANSWER: FHA in 18 months (3 years after short)
11) What is the percentage of downpayment you now plan to use if you are able to purchase?
ANSWER: 3.5%
12) At the time you decided to “walk” on your old property, did you think that “Lakeside 92040” was somehow a bad place to raise a family or had “bad schools?” And, if so, if you planned on having kids when you bought the Lakeside property, why did you even buy there in the first place?
ANSWER: When getting ready to walk, we then thought our neighborhood and elementary school was not “good” enough. Bought the house in 2003 with no kids planned for about 5 years from then.
13) You state the house was too small. If you knew you were planning on raising a family there, then why didn’t you purchase something bigger (or use your “cash-out” equity to add more square footage)?
ANSWER: Didn’t plan on kids for 5 years, thought we would be making more income by then, plus have some equity to sell and move up. (Yep, I really, honestly, innocently thought that then!!!!)
14) What was the lot size of the property you sold short? If over 10K sf, do you think you can now afford to purchase a property with that size lot?
ANSWER: lot: 7,900 SF, house: 1,800. I would like more lot size (1/2 acre) and about 2,000 SF, but up here in Alpine now.
15) Hypothetically, had you NEVER refied and/or took “cash out” and kept making payments and DID NOT sell short, do you think you will still be underwater today? If so, by how much?
ANSWER: WAY underwater, from $435K to $301K = $134K
16) Are you aware that permits for “board and care” and “group homes” of every kind are obtained by owners in EVERY part of the SD County (even areas encumbered by HOAs) and in areas of ALL price levels?
ANSWER: Sure, but this was bad. My wife is a nurse, dad’s in a nursing home, Mom has Alzheimer’s; nothing against sick and elderly, not a fan of group home that was a normal home before, but was given a 10′ chain link fence around it…
17) In hindsight, if your FICO score dropped at least 150 points by selling short, do you now think it was “worth it” to do so, given the much tougher lending standards of today?
ANSWER: Well worth it. Initial hit did not hurt us. Now only about 100 points below, and still rising.
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SMH, it just seems a little odd to me that you should have been as “underwater” as you have stated from a 2003 purchase unless . . .
-you put little to nothing down when purchasing it;
ANSWER: Nothing down for 2003 purchase and subsequent refi’s.
-you paid far MORE for it than the nearby “sold comps” at the time you purchased;
ANSWER: Comps were good
-you had an interest rate above 7% on your purchase-money note (and possibly subsequent notes encumbered by 1st TDs) or were paying I/O on one or more mtgs encumbering this property;
-you repeatedly refied “cash out” along the way (whether thru refi, 2nd TD or HELOC);
ANSWER: Did Cash out and rolled in closing costs.
-you signed up for points and a lot of junk fees with each “refi”;
I understand you decided to exercise your legal right to walk away and that you are not alone.
If there is any more light you can shed on your “story,” it would be very instructive and informative for the Piggs.
And no, I didn’t post this to try to solicit biz…[/quote]
Hope my answers above helps. I may have been less than honest when posting in 2009, as I was still in the middle of trying to get the bank to approve short-sale. There was no reason to leave that house except it was no longer the house we wanted, and felt a bit screwed that it wasn’t worth the money we owed (even from the purchase price).
Some of the other posters think I am still short-sighted or have a lack of introspection. I was short-sighted in 2003, but not now. I did a lot of introspection in 2009, believe me. The short sell was the best option, I do not regret it.
I had hoped for modest price increases, enough to move-up in about 10 years. I never thought, nor still do, that housing should be a money maker. I have had some good laughs watching the death of the flipping shows on TV.
I don’t think strategic short sellers are having as much impact on the market and economy as some think. It was doomed badly when default swaps and such greed outgrew common sense.
I’m here asking questions again to see if and when I should buy again. Like I said, my wife and I both like the idea of owning our own home, she more than me. I like not worrying about house maintenance and repairs anymore, not looking forward to that. I’ve learned a lot from the pros around here, even those with brutally honest assessments. I do prefer those that at least try to pretend they aren’t judging me without knowing my whole story.
