We avoided a deficiency judgement

The last  story for my state representative This one happened in 2011….

Judith and Sam,

Judith and Sam are friends of mine.  I was at their wedding.   Their story is a little different They only had one mortgage and it was for a mobile home on a rented lot.  They bought their home right after the marriage for $59 K… Things were going OK even thought they were paying over $900/ month for their mortgage (payment) and lot rental…Then Sam lost his job.  He was unemployed for over a year.  They did some things to try to keep body and soul together.  A paper route and a home day care business. But it wasn’t enough. Plus they had 4 children.  I heard though the grapevine that they were in trouble and I got involved.  After 10 years of owning their home they still owed $57K on it and it was worth $30 K. Molbile homes are on rented lots are different.  They are repossessed like cars but they are really homes that people live in.  All the laws to protect homeowners do not seem to apply to these people.   I asked 3 0r 4 lawyers for opinions.

I talked to the bank.  They were most unhelpful.  I tried to get them to modify the loan.  I suggested that they lower the principal and put the mortgage at 8%.  That would bring the payment down to place they could afford.  The banker kept saying that they could afford their mortgage.. They could not…  They had 4 children, the youngest a newborn.   I then suggested a deed in lieu of foreclosure The banker seemed to sneer over the phone line.   I set up a plan with a charitable group.  They had offered help with the deposit and some rent.  I suggested we needed a lawyer to give pro-bono work for a bankruptcy and that the charitable group  would pay the fees.  They could also help with the deposit Time passed and the phone rang.  It was another banker and she offered a deed in lieu of foreclosure and gave them 2 months to move out and $300.  I also had them agree not to go for the deficiency so they did not need the bankruptcy lawyer J.    Despite all of my friends problems the only item they were behind on was the payments for the mobile home.

Without the negotiation my friends would have been hit with a deficiency judgment and forced to declare bankruptcy.

 

 

Losing your home to foreclosure

I was asked by my representative at the Idaho Statehouse to tell stories of hardship.  The stories are real and the names have been changed:

John

I listed the home in February 2008. It is probably what drove me to my run for Congress. It made me mad enough to run. It was a short sale with Wells Fargo. John is a school teacher.  He and his wife took out a second mortgage on his home. The home appraised for $30K more then the home was ever worth.  Five months later, his wife left him.  He didn’t know he was upside down until he tried to refinance according to the divorce decree. He tried to pay the mortgage but released that he was selling everything he owned make the payments.  Without his wife’s income he could not make the payment.

I listed the home and dropped the price to $185K.  In April I had a good offer at asking price.  The bank would not let me call in and talk to a negotiator.  In the end they rejected the offer even though it appraised for 98% of the offer.  That is very good for a short sale.  They didn’t tell me they canceled the file for over a month.  Everyone I talked to gave me a different story.  One person said it was that the second wouldn’t settle.  My client would have settled a bit  of money to make the deal go fast (we were within the 3 month window of nonpayment of the mortgage).  We upped the price and never got another offer.  My seller was so upset that he moved before the foreclosure.   The home foreclosed in February of 2009 and the bank sold the home in May of 2009 at $165K.  During the summer a company called him asking for a $70,000 deficiency judgment.  At this point I became involved again.  The company was willing to settle for $7000 but John didn’t have the money.  We went and saw a bankruptcy lawyer.  We offered the bank $3000 at the end of summer school.  They said they needed the money right then.  I explained that he wouldn’t have the money until he got his summer pay.

In the end John, who only had the mortgage against him, had to declare bankruptcy.

Disappointment

Yesterday I found a political ally has changed his views and is now working on legislation I strongly oppose.   As Democrats in Idaho we have very little influence in how our state is run.  When the Idaho’s education secretary proposed then succeeded in passing three laws that hurt Idaho’s children and teachers there was a bi-partisan outcry among the populace.   The outcry was so great that the laws are up for a vote in December.  Most of my ally’s and some of my usual political adversaries were working to change the laws.  Yesterday I found that my friend is now going to be working for the other side.  I am very sad.  I was hoping that my friend would have helped us get rid of the bad legislation.

So this leads us to how we handle disappointment.  In our field of real estate there is a lot of it… We have it in our personal life… We have it in our political life… So far I will admit to a pretty dismal start of my new year…

I had my suitcase full of money client where I could taste that commission check.  I had a client decide it isn’t time to buy a home.  I had a listing fail inspection and the buyer walked.  I had to pull the listing and wait for repairs.  My father had a stroke and needed help on a project.  The old dog is peeing on the carpet again and her cough is coming back.  I have no obvious clients in the pipeline…  I was handling everything but my dad pretty well.  But today I am disappointed.  Perhaps I am sad because my friend seems to be what others have said in the past… But I thought better of him.   What can I do?  I need to think.

How do we handle disappointment in our lives and our business?   Usually I just shrug it off and move to the next project…  I go to the next client but as February begins I enter is with a heavy heart.  Sometimes it is the move of one person.  Maybe it is the accumulation.  Maybe later today I will have figured out and have a new client.  Maybe I will work harder to help with the voter referendum. Maybe I will drop everything and help dad in Israel in a month or so (or just visit him and his wife).  I wish I could get paid for political or social work but alas I am a democrat in Idaho and the jobs are few and poorly paid.  There is so much that could be improved if we had more money.   I guess that is true in my real personal life.  If  I sold more houses I would have a more solid future.  So how do I handle my disappointment and get on with my life and business?

I will get through it… I usually just suck it up and get on with it.  I imagine that is what I will do today… I will go to the office and try to prospect for a bit.  Does it hurt to make public disappointment?

So if you want someone who would serve you well give me a call.  I can help with their real estate needs and I will be too busy to be disappointed and my outlook will change.