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    This wasn't me but, I can relate

    A letter to the Bank

    I got an email from one of my lenders yesterday. They check my credit report regularly, and asked me why I haven't made my house payments for the last few months. Here is my response. I had to xxx out the names, but I think you'll get the gist of it.


    The reason I asked for a call with you this afternoon was to explain the credit report issue that I have. After thinking about it, it's probably better for you guys and your underwriter to have this information in writing.
    I bought my house in the fall of 2007, at the height of the market, for $670,000. Since my divorce, I have been doing everything that I can think of to cut my personal expenses and budget- as I'm sure most everyone else in Obamaland is doing as well. I quit making my house payments to xxxxx xxxxx starting in December 2009. At that time, my goal was to get xx to lower my interest rate (they don't work with consumers unless they are behind on payments). In February 2010, I negotiated a modification that lowered my rate to 6.15% from the previous 7%.
    I have my kids at home 1/2 of the time now, so the other 1/2 of the time I am living in a 5500 sq ft 7 bedroom 4 bath home by myself. About a month ago, I invited a friend over to look at the house who happens to be the top house-jockey Realtor in the valley.
    The new Obamaland appraisal laws, enforced by his federal regulators, state that a house MUST be bracketed by comps in the same area. In my area, the highest selling home in the past year was $480,000, which means that no buyer will ever be able to get financing above and beyond that number unless they make up the difference in cash. My best case scenario is to match the $480,000 selling price (which is a long shot itself) and then pay a 6% ($28,800) commission to the house jockeys. This best case scenario would have me come out of pocket for over $200,000 at closing. In the meantime, I would continue to throw $4000/month into the house in interest payments.
    It wasn't a huge leap for me to decide to give the house back to xxxxx xxxxx. The foreclosure hasn't happened yet, and I'm going to drag it out for as long as possible, so I'm unsure of the timeline.
    Xxxx, I think you know that I used to own a residential construction company during the housing boom. I have designed a 2600 sq ft home that I can build for $65,000. I'll be paying for it out of pocket, and it's the right size for me and my pile of kids. I'll be building it on land that adjoins xxxxxxxx, so there will be a 65K comp. next door.
    I now have a following of about 500 people who are regularly checking my personal website for updates on my construction project. You wouldn't believe the level of excitement by the public to the idea of building a house for $65,000. I already have RMT customers who are saying that if I can stay on budget and forward plans and specs to them, they will buy property and build this same house.

    The end result is I'll be living in a house with no payment. This will give me the opportunity to build my financial statement rather then put every spare penny into a losing proposition. I'm a bit sad about losing the house, but as a practical business decision, it is the right move for me. As far as your underwriter is concerned, It will actually raise my net worth once the foreclosure goes through.
    If you'd still like a call, let me know. If this is an acceptable explanation, forward this on to xxxxxxx for my file. I'm in the office today if you want to talk about this.

    to the man.
    Don't worry about the guns, send lawyers and money.

    “The hardest thing to explain is the glaringly evident, which everyone has decided not to see.”
    Ayn Rand