Thursday, December 9, 2010

Short Sale or Foreclosure

We’ve been out of the house for a year and a half now. It feels like a such a long time ago that I was calling remediators and stressing out about clearance sampling. It feels good to get our life back. We got to the point that we couldn’t handle it anymore. We were physically and mentally exhausted. Even writing about it now brings back a flood of emotions. Starting over has been very difficult, but God has blessed us immensely. When we say our bedtime prayers, I frequently thank God for the apartment he has provided for us, and I mean it from the bottom of my heart because I know how blessed we are.
Unfortunately, we still have the house to worry about. We had it on the market for 3 months per the requirement of the bank just so they would consider a deed in lieu of foreclosure. So after we fulfilled the bank’s requirement I got a call saying that we were denied for a deed in lieu because our house is uninhabitable. Now the only options left are short sale or foreclosure. I don’t care what happens anymore. I just want closure. Our credit is already ruined. After going through Dave Ramsey’s program we have tried to always pay for things with cash anyway, so to us it’s not the end of the world that we now have bad credit.
After finding out that we were denied deed in lieu, I asked the bank what they thought would be the fastest way to get rid of the house. They said that the foreclosure process hadn’t even started, so the fastest way would probably be to do a short sale. So I called our realtor and asked her to re-list the house. At first we had it listed for half of what we owe on it. After 2 or 3 weeks there had only been one showing, so we recently dropped the price another $20,000. Apparently no one wants to buy a moldy house. Can’t say I blame them.
The way a short sale works is that you price the house at fair market value. If you get an offer, then the offer is presented to the bank and they hire an appraiser to determine what they think the house is worth. If the contract price is close (meaning within about $10,000) to the bank’s appraisal, then the bank will approve the sale. I’m not holding my breath.
In reality, I think the only way out of this house is foreclosure. Most people think that sounds absolutely terrible, but it has brought a tremendous amount of peace to our lives, knowing that we will not have to deal with this house forever. I know that some people think that we’re doing the wrong thing not paying back money that we owe, and we too have struggled with this decision. Many good people have given us the following advice, which has helped give us peace with our decision to walk away.

“Stop being programmed by the banker to pay him rather than be safe, healthy and free! The bank is responsible somewhat on this too! They are a business, they risked their money in order to reap huge profits. It doesn't always work out in life. When you walk away, you, like most soon, will have to pay as you go. Own or go without. But you will be free, healthy and rid of that bad decision.”

“You must trust your instincts..not a hygienist.”

“You’re not crazy and you’re not paranoid. You’re smart and you have good intuition.”

“After reading the summary of the mold problem I doubt that the home can be fully remediated.”

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