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Short Sale completed! How I lost $137,500 in the Great American Housing Crash.
Posted by Xeno on October 15, 2009
Incredible. My house finally sold, yesterday, with escrow on the short sale closing a few days before my foreclosure sale date.
From 5/5/2005 to 10/15/2009, the value fell from $300,000 to $162,500. On my first home purchase, I lost $137,500 in the housing crash.
I’m completely moved out now, sold so much stuff, did my final cleaning, dropped off the key. Goodbye money pit.
I should teach “how I walked away” seminars with all I’ve learned. I did not want to walk. I tried three different loan negotiations to get into a fixed rate instead of the Pay Option ARM I was originally sold, but it came down to this: I bit off too much loan and had to face that fact.
Now I sit back and see if the CPAs and lawyers I paid are correct that there will be no further damages such as Green Tree, the 2nd lien holder coming after me for the $60,000 HELOC they bought from Bank of America, which bought my loans from Countrywide.
The final fight will come down to the HELOC being “purchase money” or not. My lawyers say it is, that California law states that because the HELOC was signed on the same day as the 1st mortgage (not a refinance), and because I used it to purchase my primary residence, and because I took nothing out of it, they can only go after the house. Green Tree released their hold on the deed for $3,000 but said this was in consideration of being able to go after me for the remainder. My attorney advised that I tell them that I am not agreeing to change my original obligation. Green Tree claimed that there must be a check box on my original loan documents stating that it is a purchase money loan. My lawyer says this is not correct. Green tree wants proof of that or they will try to collect from me. Time will tell.
So far the only definite damage has been a loss of about 150 points from my FICO (credit) score and the drop of my $8,400 Discover Card credit limit down to $1,200… plus one ER visit due to stress related chest pains… probably just stomach acid… but they kept me overnight because they were concerned about my EKG readings.
Feel great now!
zemp said
Congrats [...] When do we get to hear the song about it all?
Xeno said
It’s all a Balancing Act.
This home is broken, no lights are on. There’s someone hoping, hope’s not all gone. She said “I can’t continue if I can’t contain you”. This is where it all begins. I said, “I just want to love you, I don’t want to drain you.” This is where it all begins. I said, “Lay yourself on the table, and I will celebrate you.” I feel a little out of place, like A T.V. Guide In The Olduvai Gorge. I know that I’ve had better days. I know that I’ve had worse. My soul rose up through the real estate and it’s a wonderful world tonight.
Emily S. Knell said
Hello,
I was doing a little research on Green Tree & short sales & came across your posting. Can you send me an email? I just want to ask you a couple of questions about your short sale process, especially whether or not GT originally demanded 5% of the total purchase price in order to release the lien and how they ultimately settled on $3k. I’m working on a short sale with them right now, where they’re asking for $5,000, we can handle that, but I am hearing from my network of agents that more & more they are asking for a 5% of the total purchase price in cash contribution.
I appreciate your time.
Xeno said
Green Tree can release the lien for any price they want, or not, it is up to them. In my case, yes, they also originally said they would not take less than 5%. This was part of the roller coaster ride. I figured the deal was off. Oh well, time for a foreclosure: not really any worse for my credit score, and no difference in their ability to come after me for a deficiency judgment according to my attorney. No real difference in my taxes according to my CPA. I was ready for the foreclosure.
My agent was very nice and very persistent with GT. She got the manager’s email and phone number. She asked to speak to him and he called her back. She told me she pleaded with the manager. I don’t know the details of that conversation, but then GT released the lien for the same $3,000 to which the previous owner of the HELOC (B of A) had agreed. The wording on the release letter from GT said this was done in consideration of being able to pursue the rest due from me. After a time, my agent copied me on an email asking GT if they would change the wording. As I said above, upon consulting my attorney, I at that time let GT know by email that while I acknowledge the letter from them, I do not agree to alter my original obligation. I asked for an additional letter from them but never got it. GT asked for my original loan docs. I sent them. After that they just dropped the whole thing. I haven’t heard from them since and my new apartment isn’t so bad after all.
In retrospect, if they had refused to take the $3,000, they would have received nothing at all because the law was on my side regarding deficiency judgments for California purchase money debt.