My Lost Home and Silliness

So, I had a house. Then, my wife decided to divorce me and then the house no longer had equity. After that, my ex decided she didn't want the house and the court gave it to me while taking away much of my income. This is not a complaint, please read the whole thing. By the time I lost the house, it had lost 20% of it's value, not bad considering the rest of the market in the area lost close to 60%, I didn't buy at the top of the market and had a good conventional loan.

Because I couldn't afford the payment and alimony, I attempted to get and did get a Deed in Lieu. They took my house back at the full value of the loan, it only took two years during which time I paid nothing because I couldn't. Every month I would call the mortgage company and push to give them the house back, I did that for two years. Everytime I called they would ask me if lowering the interest rate was something I wanted to do. I had a 4%, 30 year fixed, they would have to lower it to a negative rate for me to have made the payment and that was not offered, 2% was and I had no way to pay that amount.

Follow me on this and you will understand, this is about real estate and not me and not the ex. After taking the house back, the loan processor (the loan was Fannie Mae), painted, carpeted and fixed whatever little things it needed to. Then they sold it for 40% less than my old mortgage and 20% less than the appraised value. They sold it for about $55 a square foot.

Now here is the thing. They never offered to lower my principal to the amount they sold the house for and went two years without getting any payments while they also made no effort to foreclose. All the effort to return the house was mine and I made the effort when the house was not upside down. I continued to make the payments until the court made me pay alimony and I made the payments while my ex and I were separated. I believe in paying my debts if at all possible and I don't believe divorce should be an excuse for getting out of community debts.

This is now where things get stupid. I know what the house sold for and I could afford the payments now. They are less than I pay for my one bedroom apartment and I get a good rate. When I bought my house, I paid 10% down and had a fully documented conventional loan. I had triple A credit and made more than enough to pay the bills and support a family of 5. I was such a good credit risk that my loan was sold three or four times in the first year. When someone like me provides proper documentation, like the court order, and proves they cannot pay, shouldn't they have just wanted to take the house back as quickly as possible and sell it?

Lets consider this. Once they decided to take the house back and what amount they were willing to sell it for, shouldn't they have asked me if I could afford the new sales price? If they had, they would not have had to fix anything or lose even more money with property managers and realtors and the hassle.

The problem is that people in the real estate business have found a way to make money from the Federal government (which owns 70% of all mortgages through Fannie Mae and Freddie Mac) by not foreclosing for three years. They get paid monthly just for managing the loan. The realtors have found a way to make a profit from selling the houses below market and to their friends.

There was a loan called the HOPE Loan and it was supposed to allow people to refinance their loan at the current market rate minus a percentage. Very few people got that loan because it wasn't offered often and even if you asked for it, many banks would not process the request (and they were required to by the FDIC).

I am happy to be free of home ownership. But, if I had been offered the opportunity to pay them what they are getting paid now, I would have done it just to make sure I paid as much as I could. I lived in that house for almost ten years. The total of my down and my monthly payments that I made was almost the total amount of the loan if you ignored interest.

If we are ever going to get back on track, we need to correct some things, like the real estate market. If we continue to reward people for taking advantage of the system, rewarding failure then we will ensure failure. Right now there is a spike in foreclosures, what if we offered to refinance at the appraisal rate minus 5%, how much money could be saved from the cost of repairing these properties and having to find new buyers?

Not all homeowners could make the new payments; but, many could and most of those mortgages are being paid for by your tax dollars and mine too in the meantime. Sometimes you have to write off losses; but, if you can get most of it back you are better off. If you can find loans that were held by people who died and it still took two or three years to foreclose then you will understand that we are living in a rigged economy.

Good business decisions should benefit everyone. Our business decisions seem to benefit a few at the expense of everyone. Let me make it simple. WE own 70% of all mortgages, the vast majority are upside down and the people cannot pay them. If we could drop the principal to what WE will get if we foreclose and resell the houses, shouldn't we do it? It would be cheaper and a good business decision. Does nobody believe in good capitalistic decisions anymore because you cannot get blood from a stone.

For people who believe they are conservative Christians, I post the following. I ask them to read Acts. It says that after Jesus died, the believers brought all they had to the apostles and that all was shared. How can a Christian complain about sharing all they have? The rich man was told to give up all he had and follow Jesus. He couldn't do it. If you are a Christian, you are expected to give all you can from your little and not from the great that you could attain, that is his decision. Gods.

Don't I ask such silly questions. You can address them personally or ignore them; but, they exist and they are good questions. I own very little and am happy doing so; but, it is a decision. What decisions have you made about your life?