Posts Tagged ‘Bank’

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Dazed and Confused


2010
03.04

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Posted in Buying a Home, Counter Offer, Foreclosure | 1 Comment »

Day 66 - 25 to go.

 

Well, it looks like the mean ol’ bank has rejected our offer on the foreclosure house. Well, we think they did… Unofficially. Roxie spoke to the banks agent to find out where our offer stood. All he said back was that the bank has authorized him to lower the listing price to $7,000 over their previous counter offer to us. What?!? So basically we’re out. I don’t know about you, but I find that just plain rude. Whatever happened to common courtesies? Couldn’t they officially decline our offer instead of just throwing us into foreclosure purgatory? I mean, pick up the damn phone and communicate, people! Poor manners! Your mothers would not be proud! So, we remain in limbo, we may submit another offer to them, we may not. Don’t know, kind of pissed at the whole situation. It’s horribly poor form.

 

Yesterday we did the whirlwind of house tours. We were originally scheduled with Roxie to see 7 of them, but when we met her, she smartly reduced it to six, all in 2 1/2 hrs. Today, I’m suffering house shopping hangover. I can’t remember much, bit of a blur really. And it’s all topped off with one big headache! There were split levels, ranches and traditional homes all with doors… all with walls. Some with fireplaces and some without. Some had garages, some did not. Some had basements, some had the master bedroom in the basement. (Yeah right, let’s snuggle up in there!) There were dogs with tennis balls, parakeets, fish, renegade squirrels and one mean, angry cat. I remember being warm and I remember freezing. I barely recall the one that was my favorite of the day. I believe that it was too far out, or on the wrong side of town or… road… or… something, I can’t be sure. I also vaguely remember the one my husband liked, but something was amiss. No backyard or perhaps the front yard was an exposed urban wastland with apparitions of crosswalk guards yelling at school children… I don’t know. Anyway, none were all that noteworthy and I wouldn’t really be happy waking up in any of them… at least I don’t think so.

 

People, I’m beginning to feel a bit defeated. I’m told by many that spring will bring new arrivals to the housing market. Really? Spring??… When is that? A few more weeks? Months? We have to be out of here in 20 some odd days. My future seems bleak. I’m about to be 40 and homeless.

 

Time to face facts… Call the In-Laws… We’re movin in!

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Do Banks Counter Foreclosure Offers?


2010
02.23

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Posted in Counter Offer, Foreclosure | No Comments »

Day 57 - 34 to go.

 

Yes, they do. Mine did anyway. I actually just thought they would deny our offer all together. But to my surprise… they countered! It took them exactly a week to get back to us with their new price. It wasn’t as great as we had hoped it to be, remember… we really lowballed them. Well, they highballed us back. I fear this could go on for sometime.

 

We have now countered their counter with another lowball number. This time we sent along a little ammunition. Pictures of the state of the interior and our contractors bid to bring it up to snuff… and the waiting game goes on.

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Making an Offer


2010
02.12

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Posted in Foreclosure, The Offer | No Comments »

Day 46 - 45 to go.

 

We were getting ready to submit an offer on the foreclosure house when our agent Roxie sent us this email… “Hi, I just got off the phone with the listing agent for the foreclosure. He said they will not be able to have electric or plumbing working for the FHA inspection. According to your lender, your loan will not be approved without it.”

 

GASP! What did this mean? Was that it? Was it over? It can’t be. You see, we were planning on getting a FHA 203K Rehab loan to fix up the house. We knew it would be subject to an FHA inspection, we just didn’t know the inspector needed working electric and plumbing. What kind of a rehab loan is that?

 

rehabilitate [ree-huh-bil-i-teyt, ree-uh-] -tat-ed, -tat-ing.
–verb (used with object)
1. to restore to a condition of good health, ability to work, or the like.

 

Exactly… Rehab, to me, means it is in desperate need of help, nothings working. And in this case, nothing is! So, let me understand this… in order to get a Rehab loan, the house needed to have already been rehabilitated enough to actually have working electricity? I just don’t get it!

 

Depressed and defeated we drank heavily and went to bed.

 

In the morning woke up with new vigor. Nothing like a good nights sleep to clear your head. This whole thing had to be WRONG. We emailed over our concerns to our lender and did a bit of our own research via the internet (what did we ever do without it?) We checked out this site www.fhainfo.com looking for answers:

 

FHA 203K Loan – Eligible Property:

 

To be eligible for the FHA 203k mortgage loan, the property must be a one- to four-family dwelling (it is, ok, check) that has been completed for at least one year (built in the 50’s qualifies, check)… Homes that have been demolished, or will be razed as part of the rehabilitation work, are eligible provided some of the existing foundation system remains in place. (that’s the plan, Stan.)… the rehabilitation funds will only be used for the residential functions of the dwelling and areas used to access the residential part of the property. (Yep!)

 

We dug further… On properties older than 30 years and over $7,500 in rehabilitation costs, the cost estimate must include a contingency reserve. The reserve must be a minimum of ten (10) percent of the cost of rehabilitation; however, the contingency reserve may not exceed twenty (20) percent where major remodeling is contemplated. If utilities were not turned on for inspection, a minimum fifteen (15) percent is required. (Ah HA!) There it is! Right there!

 

We sent this info along to our lender, and lo and behold, she confirmed it! Crisis averted! Moving onward!

 

The next stumbling block, other than the blizzard of 2010, is the fact that the listing agent for the foreclosure doesn’t think the bank will take less than 13% off the listing price. Are they insane! Who would buy this place for that? It is NOT livable. No kitchen (no cabinets, no appliances, even some hook-ups are missing), It’s listed as a 2.5 bath, but really it’s one. I could only find one toilet in the home. I don’t think a hole in the floor qualifies. It’s also listed as a 3 bedroom, but during our inspection of the property the “master” had absolutely no vents. How would we get heat in there? We’d freeze! So, I wouldn’t really consider that a bedroom, plus it didn’t have a floor. But here is our problem… The bank who is handling the foreclosure is in Texas. TEXAS! The house is here in Baltimore. How would the bank even know the condition of the house? Would they fly someone up here to check it out? Not for the price we are offering. I guess we are going to have to rely on the listing agent to communicate our concerns to the bank. If he actually does, will they even care? Not sure… But my money is on NO.

 

Even so, we are going to offer… 42% lower than the asking price. We think it’s fair, it’s basically the cost of the land plus the cost of the garage (which is new) hmmm, priorities I guess…

 

Yesterday we drew up the papers. Geez! Like 40 pages of signatures and initials all to see if the bank will accept our lowball. Seems like a lot don’t you think? Especially when the odds are stacked against us. Roxie is sending it off today! We have heard rumors about how long it takes a bank to get back to you on an offer on a foreclosed home. Apparently, they’re backed up with stacks of foreclosure paperwork. But we have been assured with this property, it might be just a week. Well, we shall see…

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To Counter Or Not To Counter


2010
01.28

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Posted in The Offer | 1 Comment »

Day 31 – Counter

 

We met with our real estate agent today to discuss our counter offer. It was an emotional conversation. She brought up the fact that if we counter too high our house might just not appraise for that much. Oh yeah, that…

 

Put it this way… The offer was 16.5% lower than what our home appraised for 3 years ago. And I’m actually worried about the appraisal. No appraisal means no loan, which means no buyer. ARRRGHH! The stress! I’m tired and I have a headache. Ok, Roxie… here’s our counter offer… I hope they accept it and I hope it appraises. Everyone pray to the bank Gods!

 

Oh mighty bank Gods please don’t be tightwads
We know that you do rely on comparables nearby
But our house is so much more than those that are next door
So please make our home worthy of your loan
We so desperately need to get past this one milestone

 

And leave this part of our lives in the dust!

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What is a Short Sale Anyway?


2010
01.23

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Posted in Buying a Home | No Comments »

Day 27 – I woke up to a car just sitting in my driveway. A woman and child, checking out the house. They were there for like 10 minutes. My dog was not happy! Showing tomorrow, these are the people who are coming for a second look! They are now coming at 5:30 pm, not 6:00. hmmm.

 

As I browse for a new home. I have come across a lot of “short sale” listings. What is this exactly? Does this mean I can move in next week? Does it mean the listing will only be available for a “short” time? Does the home only have 6 foot ceilings? I did a little research. Yes, went Google crazy, and just for you I’ll put it into language we can all understand.

 

A short sale is a sale of a house in which the sale proceeds fall “short” of the balance owed on the property’s loan. Ah ha, “short” get it! Yes, that’s it in a nut shell. It tends to happen when the homeowner cannot pay the mortgage loan on their property. The logic here being, the lender agrees that selling the property at a loss is the best situation for all parties involved. It allows the owner and the bank to avoid foreclosure, which can have some hefty fees for the bank (oh, I’m so sorry Mr. Money Bags) and bad credit for the homeowner. A Short Sale will lower the homeowners credit rating 75-100 points and of course will remain on your credit report for 7 years. From what I understand it is not as bad as what a foreclosure looks like on your credit score. Here we are talking 200-300 points. Either way, it’s a long journey back.

 

In a short sale, the bank or mortgage lender agrees to discount what you owe due to economic or financial hardship on the part of the borrower. I don’t know if I want to address this statement or not. In my opinion they should never have given borrowers more than they could afford anyway! I mean, it was like the banks had no criteria at all when handing out mortgages a few years ago. It was a sign and drive into your new driveway event. Just what were they thinking? Do they know how many lives they have screwed up? Yes, not a fan of the banks these days.

 

So a “short sale” is like cauterizing the wound before it bleeds out, but there will always remain a scar.

 

It’s also not that easy to sell on a short sale… Lenders often have loss mitigation departments that evaluate potential short sale transactions. The majority have pre-determined criteria (oh, there it is) for such transactions, but they may be open to offers (sounds like everyone has their price), and their willingness varies (am I having a good day or a bad day?). A bank will typically determine the amount of equity (or lack thereof), by determining the probable selling price from an appraisal (and isn’t just about everything appraising lower these days?).

 

There are still crooks out there, so be wary… Some lenders have been accused of engaging in fraud during the short sale process. The fraud involves lenders of second mortgages or home equity loans demanding kick-backs in the form of cash payments from the home buyer or real estate agent, and not disclosing them anywhere on closing documents. Tisk tisk tisk. This is in violation of RESPA (Real Estate Settlement Procedures Act), which require disclosure of such payments. Bad lenders! Bad!

 

Buyers, like me, may choose to pursue short sales to get a good deal. So when you see a price listed for a home that you think is too-good-to-be-true, before you jump on it like white on rice, ask your agent to call the listing agent to find out if the home is a short sale. Because you might want to think twice. It’s not as simple as it sounds, and very few can close in 30 days or less. Oh, yes, “short” is the new “long.” Many home buyers have waited 4 to 6 months to close on a short sale, sometimes longer… Ouch!