Friday, May 28, 2010

Short saling. It's the next wave of financial chaos being forced down the American economy's throat. I hear story after story of both people I know and perfect strangers choosing the short-sale route - even though many of these people are making their payments and are capable of continuing to do so.


Who benefits from a short sale? The homeowner. That, from my perspective, is the only grouping in the mix that benefits. Everyone else is screwed. A co-worker confided to me this week that he is going to go the short-sale way. He is current on his payments but - WAY upside down on the loan. In other words, he owes far more on the house than the house is worth or will even think of being worth in any near - or possibly even distant - future.

I have struggled with the thought of doing the same thing here, since I am also upside down on the mortgage and I have been seeing that my lender is no willing to do a principle reduction. They are not, of course, constrained to do so. But, it seems to me, they stand to lose a lot more in a short sale or a homeowner simply walking than by doing a principle reduction.

I go back and forth in my mind on the pro's and con's of staying here or leaving it behind. There ARE many pro's, actually, there is also the big con: owing more on the house than the house and property are actually worth. I have gone over both sides of this coin concerning my individual situation at least a few times on this blog. It isn't all peaches for the short-saler, either. It does, from what I have heard, screw up your credit. You will not, undoubtedly, be going out and buying another house anytime soon. You will be forced into renting someone else's property for, probably, an extended period of time: years at least.

When you are renting, you are throwing money into the trash can. There is no return on that money, it's simply the fact of having to pay for a place to live with no foreseeable return in the future. My thinking is going on a line, here, bear with me. How many years will it be before that individual that short-saled is going to be able to buy their own property again? Yes, they say they will go out and rent a property at a far less rate than their current mortgage and many say they will save the difference in savings to eventually come up with the - substantial down-payment - they are going to need to get into another house.

I question, however, the ability of the person that says they are going to save the difference every month. They may be sincere in their statement at the time, but when the rubber meets the road, the American way is to spend, spend, spend, not save, save, save. This is mostly what has gotten us into this trouble to begin with: a slew of people - a HUGE pot full of people - getting loans on homes that they KNOW, when the rate adjusts, they would not be able to afford those payments.

I have a couple of questions for myself - yes, pointing this at me - when thinking of walking from my house and property. 1: can I live with it? Will I sleep at night knowing that I probably could continue making the payments, but because of the fact that I owe more than the house is worth, I didn't want to take that kind of loss, as MANY people are doing: walking.

2. If I stay, how long will it be before I pay this place down to the point it IS worth as much as I owe? I have no idea how to answer that question, really.

3. Am I ready to live on a rental property - somewhere - again? Is it easier to rent TO tenants or BE the tenant?

4. If I DID walk, DID find a house somewhere for rent that would allow all of these dogs and my lifestyle, how much would I really save?

1. I don't know. I have not answered that question to myself yet, therefore, I have not even looked into short-saling. Ethics and morals are of major concern to me in my own life.

2. Again, no idea, will have to look into finding whatever formula that may exist to answer the question.

3. NO. I do NOT want to rent a property anywhere. I HATE renting. A MYRIAD of reasons why, not going to go into all of that here, just answering my question.

4. A lot. $600 per month savings anyway. I have seen 3 bedroom houses going for $600 per month. Not GREAT houses but nice and in good condition. Fenced yard, allows dogs, etc etc etc. That's $600 - or closer $550 - off the monthly mortgage payment. I would be able to afford my own property at that rate and would not have to sublet to other tenants, or if I did, only one.

I've been through bankruptcy, bad credit, high interest loans. My home loan is at 5.25% - down from 6.75% it was at before the loan modification.

It is very tempting, in some ways, to consider walking. Far less responsibility and a weight taken off of my shoulders: trying to keep a room rented to keep the tenant money flowing in. It is a pain in the @$$, frankly, to have to keep getting new people in here. It's part of the deal, yes, I understand that, but it's no fun. Talking on the phone with one after another after another person until you get someone OVER here and committing to the room: ie: handing me cash.

Look , I love to do improvements on whatever place I am living in - but - that motivation lessons considerably on someone else's property. You think I want to spend countless hours on landscaping another person's house? Only if they give me some credit on my rent payment. You do NOT own the place, why bother? Well, cause' you live there and it makes it a nicer place to live.

Honestly, I vascillate back and forth with this issue in my mind - I don't talk about this at all with anyone but yes, I am putting it in writing - as to whether I should stay or go. Every time I see someone I know going the short-sale route even though they CAN afford the payments, it sends me into all of this thinking all over again. My house payment is current. I have enough coming in - now anyway - to continue to make the payment. That seems to change month-to-month. I can't answer my own question to myself with any definitiviness: stay or go?

BTW, short-saling screws everyone else in the neighborhood. Property values go down because you are selling the house, usually, FAR below the comps in the neighborhood for any house of same size and amenities. Of course the lender is screwed - they are taking a huge loss. It only helps the homeowner and I suppose the buyer who is literally getting a steal of a buy.

Onto other things. I finally was offered a queen sized mattress on Craiglist through one of many ads I have run to get one - for free. I simply put the story out there, got some responses but no replies to my response to their initial offering. Well, a homeowner that also - rents rooms - had a tenant leave and left behind the mattress. Had soda spills on it. She told me that before I went and got it. I figured the trailer tenants would be able to overlook some soda stains to have a comfortable bed versus continually having to repair and blow up an air mattress. I didn't ask them, I just went and got it. Brought it home, told the guy if he didn't like it, I would just get rid of it.

The next time I came home, he was out there with a small bucket and some bleach. He was using a light bleach mixture to sterilize the mattress and try to scrub out the stains. He spent hours on it. The mattress is now inside the trailer, and yes, he thanked me for getting it for him. I didn't pay a penny for it, though I definitely went out of my way to acquire the thing. It's a NICE mattress, btw, besides the stains. Very comfortable. He got much of the stains out. I take no responsibility for those people or taking care of them, they are on their own. I do try to get things for them if I can find them on CL on free section. They are required to feed themselves, clothe themselves and pay for their use of electricity and water. I have provided many things, yes. The trailer itself for starters. They're decent people and I don't mind having them around, I just don't think I want that trailer out there forever.

Instead of working on the waterfall today, I took the homemade filter apart and cleaned it out. One of the ponds has a leak. I don't know which since one feeds into the other. I had thought I had narrowed that down to nothing, but the water level goes down on the lower pond every day. About an inch. Refilling it is nothing, they are small ponds and refilling it is not that much water.

However. 

I do NOT want a leaking pond.  The only way to find out which one is leaking is to pull both of them out, fill them up with water above ground and find the leak or leaks.  Live and learn: never buy used, preformed ponds from a family that has had kids playing in the empty ponds  like they are playing on a slide in a playground.

My idea?  I have this brand new, much larger pond.  Put it on the cement slab near the ponds that are in the ground, fill it with water, treat the water, put the fish and the plants in there.  Take out both ponds, dig out the ground and put that big one in where those 2 formerly occupied the ground.  The waterfall will go into a larger pond and it will look much more proportionate - size of the waterfall to the size of the pond.  Take upper pond and feed it into the large pond.  Take the lower pond and install it out front as a water feature with plants only, no fish.  Well, mosquito eating fish, yes, but other than that, just a nice plant feature for my front yard. 

I have fairly well convinced myself to do this - lots of work, yes, but I truly feel that the outcome will be a much better setup than what I currently have.  The waterfall will not be connected to the pond in any way, shape or form.  The rock that dumps the water into the falls will over hang it, yes, but touch it or connect to it? No.   The waterfall will not hinder me in removing a pond excepting that it over hangs.

I was totally "wasted" when I got home from work - tired that is, not drunk or high - I ended up taking a very long nap and also bypassed work on the falls. I ended up taking the filter apart instead and cleaning that all out.   Quite the pain, actually, but necessary. 

And.......I have things I need to get to, so........this entry is history.

G'evening.

ben

Friday

BP has spent nearly 1 billion so far on this oil disaster.  Tip of the iceberg, they will end up spending much more than that before this operation is over, even if/when they get that gusher stopped.

Suns got beat last night.  Tie game going at 3 seconds left - Lakers give the ball to Kobe, misses but is picked up and shoved into the basket.  Suns are now do or die next game and if they win, next game after that. 

Whatever the case, my waterfall project marches on.  Today, I will hopefully cement in the first large rock that over hangs the pond.  Built dirt up behind it and get it read for the second tier.  Which would have to be tomorrow to give it time for the cement to set on the first rock.  Then on Sunday, 3rd tier and probably the creation of the pool of water at the top  Or not.  Haven't really determined that part yet and won't be able to until I get to that point. 

Someone from my ex wife's church is paying for Caleb - my son - to get driver's ed.  $150.  I was asked to fork over that much money, I did not have it.  The someone is my ex-pastor who shunned me some 6 years ago from the church.  Not going to go intot that here, too much and too long a story. 

3 day weekend - 7-1/2 hours away from the beginning of it - unless - of course - work takes me over today. 
Which I doubt it will, bit it IS end of month, never know.
Anyway, just a short entry.
Take care.
ben

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