So, I haven’t really posted much this past year about the situation with our house. I think it was a combination of the fact that I was afraid to say anything about it since nothing was ever certain, and the fact that I’ve really become emotionally calloused to the situation. But I am due for a serious post, and “owning” a house that you cannot pay for is a pretty serious thing, so I figured it is “high time” that I posted about the situation. But for the sake of new readers (and, really, all readers who don’t want to have to dig through my archives to figure out what I’m talking about,) I’m going to try to give a “brief” history of our lives as homeowners. Brief being in quotation marks because, well, you know how wordy I am about everything.
It all started in November 2006. Josh, Ava (1 month old), and myself, were living in student housing at my college. Josh had a half hour commute to work. I was projected to graduate May of 2007, so we knew that we only had 6 months left that we would be able to live where we were. We were debating whether to stay living in the town that we were (mainly because we loved our church) and Josh continue to commute to work, or if we wanted to move to the city where he was working.
We really hadn’t seriously planned to move before I graduated. Student housing was super cheap, and although not luxury, VERY nice for the price we were paying! However, we started to do some research. We realized that we would have to move to Alabama where Josh was working because the cost of land/housing in Florida where we were was so high, and because the only rentals in the town we were were income based government housing.
On a whim, we looked at a piece of property that had a trailer on it. Nothing came of that venture, but Josh’s boss at the time, who is a licensed real estate agent on the side, caught wind of it and, all of a sudden, we had been hooked up with a realtor and were looking at houses.
Now, at this particular job, Josh’s pay was PARTIALLY based on commission. And his commission was not based on his own performance, but the performance/financial success of the company as a whole. In November ’06, his pay was very good and very consistent, so buying a house did not seem to be that unreasonable. Also, this was a time when FHA lones were available in abundance, which means a first time home buyer could purchase a home without a downpayment. What they DON’T tell you is that means you have extra fees until you’ve paid the house down 20%. But now I’m getting ahead of myself.
So, anyway, lo and behold, the beginning of December had us closing on a house. I think it is safe to say that we jumped feet first into this venture way. too. fast. We had a wonderful, Christian realtor, but we had not spent much time in prayer ourselves about whether or not to buy a house. How could we have – we closed only a few weeks after we even started THINKING about buying a house! It seemed logical at the time – we planned to stay in the area until we payed down our debt (credit cards and student loans from before we were married), our house payment would be the same if not less than what it would cost to rent a place of the same size, and at the time, the market was great and selling houses was not a problem. Even at closing, some red flags were raised, and I wish now I had followed my gut and just walked away. But we forged on through the closing, and we were home owners.
Our first year in the house was fine financially. At some point during 2007, Josh’s commission began to diminish (which, as I previously mentioned, was not determined by his performance,) but by then I had secured a part-time job which payed for groceries and that helped. However, at the beginning of 2008, when we were no longer able to meet our expenses with what Josh was getting paid, and when we discovered we were pregnant with our second child, it was clear that something had to give. Josh started to look for a better job, and he discovered that there are virtually no good paying jobs in his field in the city where we were living. So he started to look for jobs elsewhere. We had never heard of a house taking too long to sell, so at that point, we weren’t yet seriously worried about the implications of moving.
The job Josh has now is truly a blessing. Good paying state jobs are hard to come by, especially in times of financial crisis. So we were pretty thrilled to move here at the end of June 2008. We enlisted our old realtor to sell our house as soon as we found out we would be moving. And honestly, although we were concerned about the first couple months we’d live here since we’d have an overlap in having to pay rent and having to pay our old mortgage, we did not think that would be an issue very long.
I’m not an economist, but this must have been around the time that the housing market crashed. The house did not sell and did not sell. It has never even been under contract to sell. The few people that were interested in it were deterred by the fact that it only had one bathroom, and by the fact that the people who were renting the house next door at the time tended to leave trash in their yard (in an otherwise clean neighborhood.) Oh, and not to mention the fact that the few people who did want the house were unable to get financing – those FHA loans were no longer being passed out like candy when the economy went downhill! So, we continued to pay the mortgage, and somehow we managed to stay afloat. Well, I know what the “somehow” was…God’s grace.
We did not want to rent the house out because we really just wanted to be out from under the house completely. However, in spring of 2009, we finally decided to give renting a shot. We made arrangements with some friends who wanted to rent the house. On THE DAY that Josh was meeting them to sign the lease and give them the keys, there was a really, really bad rain and the house flooded 6 inches deep inside. I mean, our friends had packed all their belongings in a U-Haul truck and they were about to move in and take that mortgage off our hands, so to speak, and the house flooded. They were sent back to their old apartment, and we were stuck with a soaking wet house several hours from where we live.
We were VERY blessed to have flood insurance, so at this point, the issue was not the money it would take to fix the house, but the time. We had to take the house off the market for the whole summer while it was being repaired. However, when all was said and done, the house looked so much better remodeled than it did before! We had high hopes when we met with our realtor for her to take new pictures of it and put it back on the market. Surely now someone would buy this house; it had brand new carpet, paint, and even appliances! It looked amazing, and yet because the insurance covered all the repairs, we were able to list it at the same price we had it before! It was really a steal at this point!
However, the house didn’t sell and didn’t sell. Once 2010 started and it was evident that nobody was planning on buying, we decided to pursue renting again. This time, we put ads on craigslist and met a family who wanted to rent the house. On the day we were supposed to meet with them to sign the lease, they called us to let us know that they had some unexpected expenses and wouldn’t be able to rent that month.
In the mean time, our realtor’s overall business was so bad, she was forced to take a part-time job. Once she did this, we really felt like she had completely stopped trying to sell our house. The house was not being shown, so we knew there was no way it was going to sell. We decided to try a new realtor. We found one that came highly recommended. We met with her, got the paperwork signed, and everything seemed to be fine with her – she was professional, experienced, and worked full-time as a realtor.
Well, apparently it was a bad year for her. Due to issues in her personal life, she suddenly went MIA. She would not return our phone calls, e-mails, or texts. Josh would ask her a simple question, and it would take her a month to even attempt to answer it. This was very frustrating; we did not live close enough to our property to check on it, so we were completely dependent on her to communicate with us anything that went on in regards to our property. We felt even more helpless about the situation with our house than we did when it flooded.
Up until this point, we were being faithful in making our mortgage payment. We want to be as Christ-honoring in our finances as we possibly can. However, at some point during 2010, it got to the point that it was obvious we wouldn’t be able to juggle the mortgage with everything else anymore. I can’t really tell you details because Josh handles our finances, but he began to contact the mortgage company to let them know we were in trouble and to see if there is anything they could do to help. He did this for four months in a row, and the message he got was, “You’re a good paying customer and you don’t live in the house, so we cannot help you.” So, finally, he purposefully missed a payment. THEN the mortgage company wanted to talk!
In discussing our options with the mortgage company, Josh found out about a procedure called Deed in Lieu. It was basically signing the house back over to the mortgage company. We would take a credit hit, but not nearly as bad as if we had foreclosed. It sounded like a perfect solution for us, since we would not be buying another house any time in the near future, anyway. We turned in all our paperwork for the Deed in Lieu and prayed hard that we would be accepted. And, at this point, we stopped making our payment completely…not only could we not afford it, but the mortgage company told us we HAD to miss our payments to qualify for this!
We waited the estimated 60 days that the process would take without hearing back from the mortgage company. Then, the closing negotiator contacted us to let us know that we did not qualify for the program because our house needed to be up for short sale for six months before we would qualify. (It’s so fabulous that no one let us in on that before!) So then we started the process with our realtor (who by now, after Josh having to call her supervisor, was being a little more communicative) and the mortgage company of putting the house up for short sale…and that is where I think it is now! Although, the short sale price we are required to have is actually a little higher than our asking price was before, so I admit that I very much doubt that the house is going to sell during this six month period. (Because we have an FHA loan, HUD has to back up the short sale asking price, so the mortgage company apparently can’t just put the house up for a price that will make it actually sell.)
Even now, we are having trouble with communicating with the realtor and the mortgage company. Josh has sent them the same paperwork 3 times, and each time the mortgage company has waited a month or so, and then asked him for the papers again. In the short sale program, we are supposed to be able to decrease the price of the house by $1500 each month, but with the lack of communication between all parties, we have no way of knowing if that is actually happening. I hate to sound so negative, but the only end I can see in this situation is foreclosure.
Our lease is up here at the end of June, and we will have to move somewhere else because our lease specifies that we can only have two people per bedroom here. Not knowing if we will be done with the house by this time or not, I’m just praying that we are able to find a new land lord who will extend us some grace despite the terrible credit score we will have by this time. (I’m hoping they’ll do enough research to see that we’ve never missed a rental payment, we’re just in a bizarre situation with a house that refuses to be sold.)
So, having said all that, I don’t recommend for ANYONE to jump into owning a house. I mean, seriously, if you think there is a slight possibility that you will be moving from where you are in the next, oh, 10 years, don’t buy. Rent. I wouldn’t wish our situation on anyone!
It’s a little tough spiritually, because we are not able to pay for something we’ve committed to paying for, which goes against the grain of what we believe. I feel especially helpless since I don’t generate income, there is nothing I can do. Oddly enough, I’ve felt much more of a peace about it since we entered the Deed in Lieu/Short Sale process than I did before. God has provided for us for over 2 years…and now He is providing in a different way. There are still a lot of unknowns (like, will HUD chase us down to pay any difference between our loan and what the house does finally sell for?), but we are a point where all we can do is place it in God’s hands and trust Him.
Whoa, that was super serious, I almost fell asleep writing it! Will make up for it with some light-hearted Sweet and Silly posts later in the week!