I know there are some bright real estate minds here so I thought I would through this out.
My ex’s house is near foreclosure (again) I believe. My two sons live in the house with her. They are young adults. She also has two younger kids by her second marriage as well as another with her current live in looser. Ok, enough of that.
I don’t have a lot of info. Seems like she bought the house around 5 years ago, 290k, put down about 80. What would that make her payments be??
Somewhere along the road, she may have refinanced, posibly more than once, although I believe she did not take out much more than 20k or so in equity at each refi. At least one of those refi’s may have been to restructure the loan due to being in arears. Does this sound right so far??
She got in big trouble last year sometime, way behind on payments, had to come up with a boat laod of money (PENALTIES??) and commit to a HUGE monthly nut for the next twelves months it better be on time Western Union only no checks or CC’s or your out on the street. Her payment is $2900.00 a month!!! How’s this sound now?
My youngets son is trying to keep the boat afloat, but he has yet to come to me as I suggested and try to put a face on their financial needs. My older son is in “school” so to speak so his contribution is negligible. Ex is loosing her mind I trully believe, she’s been through a dozen or so jobs in the past couple of years. Looser live in has actually worked at KFC! Oye.
I think she is with Countrywide. I’m trying to get this fixed up if I can, it’s hard for me to get involved as I am remarried, this is NOT my house, but the right side of me says I should try to help.
8pm deadline came and went last night. They won’t accept partial payment even.
I’m unclear how her current payment could be so high. If she has equity in the home do you think she should be able to refi somehow? The mortgage co. seems like they are possibly being unreasonable towards the situation, but I don’t have many historical details. I know the house is probably worth mid to upper 300 possibly over 400k.
Any of you have any thoughts on this mess? My pockets are not deep, but they are my kids and even though my door is open, they wish to stay where they are. My younger son who is attempting to manage this mess is greatly burdened by the whole thing; he feels responsible for his mother. He’s a good kid and I should try to help him out.
Any thoughts or ideas are greatly appreciated.
Eric
Replies
I can't relate to the emotions and family dynamics involved, so if the response seems heartless, that's not the intent...
>I'm trying to get this fixed up if I can
Why?
You can't take on other people's problems as your own. You can't fix others' situations. Why borrow trouble?
Let your kids know that they can stay with you, even if just for a short time while their mother settles her affairs properly. Less you know of, and are involved in, the details of her troubles, the better. I'd bet your current wife agrees with that.
Your job is to be those kids' father, not your ex's CFO. There's a clear boundary between those two roles, and for good reason.
Thanks Cloud,
I can't disagree with you a bit.
It's my kids home, it's where they live, so yes, there is an emotional factor.
It's gonna cost me one way or another, so if it costs me something, and my childrens mother doesn't loose their house in the process, I've killed 2 birds.
My youngest son has a significant finacial interest in the house currently. I should have mentioned that.
E[email protected]
It's Never Too Late To Become What You Might Have Been
For whatever it's worth...Cloudhidden is right.
This will be an excellent time for your younger son to learn that it's not possible to save someone who is not willing to save themselves. It's a hard lesson - looks like you might have to take a refresher course - *>), but absolutele essential if you and your kids are not going to be saddled with this mess, or similar messes, for life.
Your kids need an example of how responsible adults act.
Your kids need an example of how responsible adults act.
So responsible adults don't try to help one another? Gee, I thought I WAS making a fine example. Not to mention the sacrifice and contribution my son has made. Responsible? I'll have to send a letter off to my Sunday school teachers and tell them to change their lesson plans..............and tell my kid to cut and run, leave his mom to fend for herself, thanks for all you did mom, but it's time for me to go!
Perhaps I included too much personal info in the post.
I was hoping for less of a personal self help type response and more along the lines of business and financial thoughts and suggestions.
But thanks for taking the time to respond.
E[email protected]
It's Never Too Late To Become What You Might Have Been
68265.8 in reply to 68265.3
Your kids need an example of how responsible adults act.
So responsible adults don't try to help one another?
Eric, helping someone out is okay, provided that they aren't enabling some damaging behavior to continue.
No one can make an accurate assessment of how to solve this problem, until all the facts are known. Everything mentioned already is nothing more than pure speculation.
I'll take a stab at some pure speculation.
Your ex got herself too far over her head. She should have taken the 80k, made a modest downpayment on a modest house, then put the balance in a rainy day fund.
Instead of sneering at the other partner for working at KFC, I'll commend him. At least he's doing something and there are substantial opportunities for financial growth in the fast food resturant industry. On the other hand, if he's simply working a starting position, then his lifestyle must reflect that financial reality.
Since you've made no mention about the ability to pay based on your ex's income, I'm assuming that she doesn't make enough combined with the fast food income.
All that means is that this ship is sinking.
You have to realize that you can't save a sinking ship. Instead of bailing, it's better to abandon the ship and then start swimming as fast as you can so the whirlpool doesn't swallow you. It's important for you to realize that you'll get swept down into the vortex if you get too close.
The keys for handling this unpleasant situation are planted firmly in your ex's hand. Unfortunatly, many people in this situation are in denial. They don't act quickly enough and their procrastination leads to more serious financial troubles.
The best solution for your ex is to talk to the banker. Instead of forcing them to jump through all the legal hoops to foreclose and evict her, she can sign over a deed in lieu of foreclosure. This essentially transfers the property back to the bank and allows them to sell it to recoup their loan, without incurring the many thousands of dollars in legal fees that your ex ultimatly will be responsible for anyways. By stalling, she's only adding substantial needless legal fees to her loan.
If there is enough equity, she may be able to let the property go to a real estate investor instead of the bank. The investor would probably have to restructure the financing using his own excellent credit, or perhaps putting in some cash to eliminate a possible high interest second (or third) mortgage. Quite often, the predatory lenders will offer a high interest second or third mortgage to people that find themselves behind in their first mortgage. The borrowers take on the additional payment because it represents a quick fix, but they fail to realize that if they couldn't keep current on the first mortgage at 2k per month, they can't possibly stay current when they add another 500 or 1000 to their montly outlay.
Probably the best thing you can do for your ex and kids is to get them some information that explains all their options. You cant throw money at this situation unless you have enough to pay off all the mortgages that are loaned at above market rates.
There are possibilities for her to sell her house quickly on a lease option, or subject to deal if she has some equity and is willing to give it up. There are some pitfalls, but from my point of view, anything she does will be an improvement, as long as she gets out from the burden which she obviously can't afford.
Sorry to hear that you and your kids are going through hard times. Get your son the book "The Richest Man in Babylon" and he'll begin to understand why your ex failed and maybe he will be able to sidestep that later on in his life.
blue
Probably the best thing you can do for your ex and kids is to get them some information that explains all their options. You cant throw money at this situation unless you have enough to pay off all the mortgages that are loaned at above market rates.
Thanks Blue for the informative post. What you wrote above is about where I am at. I can't float the boat, but if I can help out a little bit I will for the good of my kids. Maybe I'm nuts. We are in a circle and I know that good deed come back around.
They were breaking the nut for a while. The ex has lost it according to my son. She hasn't been working, she's been through a bunch of low pay jobs, the live in has spent most of his time there sleeping on the couch to provide "daycare" to the little one while she works. She's has the ability to earn a halfway decent living.
I'm thinking at this point she may be better off renting. I would never get myself in the situation where the whirlpool would pull me in. I'm in the lifeboat, just trying to throw the life preservers in the right direction.
Thanks,
Eric[email protected]
It's Never Too Late To Become What You Might Have Been
best response in the thread
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"I was hoping for less of a personal self help type response and more along the lines of business and financial thoughts and suggestions."But this is haard for us to do since you yourself obviously have a lot of emotionall attachemnt in the situation. You are mixing up emotions and business here, which is entirely reasonable for any human being. The best business advice is to stay out of this situation financially.
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
You are mixing up emotions and business here, which is entirely reasonable for any human being.
At least I know I am not being entirely unreasonable!
Damn lump in my throat.[email protected]
It's Never Too Late To Become What You Might Have Been
Pretty active thread here, with overlap of responses!Keep that life preserver handy for survivors
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
Eric,
If you wanted business and financial advice then I suggest you talk to a banker or lawyer. There is lots of good advice around here, but there are better primary sources of financial advice. I'd call Dave Ramsey's radio show if you can find it on your dial.
I think your friends here on the Fourum like Kate are giving you the best advice. Your wife, her boyfriend, and your kids treat money responsibilty like a drunk does alcohol and you are about to enable them. They can't afford the house, and I gaurantee if you bail them out now it will happen again.
It wasn't bad financial advice that got them into trouble, it was lack of self help and bad decisions. Therefore financial aid without changing their mindset won't help. If your wife had appendicitis would you operate on her? No, that's the job of a surgeon. Now she needs the help of a lawyer, financial counselor, and a moving van, and you ain't none of those.
Can't disagree with a word you said, you about nailed it.
Thanks.
E[email protected]
It's Never Too Late To Become What You Might Have Been
I didn't mean to sound harsh - this is a tough spot. I know because I've been there - speaking from personal experience.
Is your FW disabled, or just irresponsible? My impression from your first post was the latter, & if that's the case, nothing you or your sons can do will be anything but a band-aid.
The fact that your son has a financial stake in the sinking ship does change the economic picture, but not the psychological one. There is a line between "helping" & "enabling" that is hard to see when you are in the situation.
In my mind, a responsible adult lives within her means, insists that other members of the household do their fair share, & doesn't depend on her sons to support her & her boyfriend in the style they prefer.
By all means, do what you REASONABLY can to help your son recapture his financial interest, but not at the expense of your current family.
In my mind, a responsible adult does exactly what you said in your original post: you offered your sons a place to stay while they get back on their feet.
In my mind, a responsible adult says, "Mom, I'm sorry thingd are so financially rough for you, but I can't bail you out any more. There is credit counselling available at xxx, and when you have a plan, I'll help you have a garage sale & move. I'll buy the groceries for x weeks.
How old are the sons? It was my impression from your post that they are young adults. They have hard life lessons to learn.
Thanks kate,
We're cool. Just a bad habit of mine the way I respond to certain things. Like the truth!
I appreciate your thoughts and the time you spent to post them.
Eric[email protected]
It's Never Too Late To Become What You Might Have Been
Eric -
Don't envy you at all! You are in a terrible spot.
As usual, Breaktimers rally around with tons of good advice. The people who know finance and RE law are right on top with that kind of advice.
I treread my post, & it was a little (?) blunt & preachy - sorry.
Supporting your sons is exactly what you need to do - you are totally right there.
The real skill lies in supporting them without enabling her, & I don't envy you the balancing act!
K
Eric,
My nickels worth from a guy that has dealt with many lenders, foreclosures, tennants and dead beats.
The numbers are similar to what danski said in his post. Blue offers good advice as well as many others.
The lender is probably done if the situation is as you said. The are going to forclose unless someone has enough cash to buy it out right at this point. They will hit a point where they are tired of messing with someone and just pull the plug.
Look at what you have said. She has changed jobs many times in the last year or so. She bought a house that was too expensive for her. She had to refi at least once due to arearages. She is behind again. She had to refi once and maybe twice to pull money out of it. Her significant other makes poor money, inconsitantly also. She pulled your son and his money in the fire pit with her.
The woman is dead beat. She makes poor decisions and grabs on to all around her trying to save it. Even if you found a way to make it work do you really think this pattern will change? No. She will be in the same boat in 12 months and you will be out whatever you put into the fire pit, the same as your son.
Explain to your son where she probablyis financially and that nothing at this point can fix it. Tell him how sorry you are and that there is little at this point that can be done. Offer him a place to stay if he needs it. Tell him you are here if he needs to talk or some money to help him along. He needs leadership and a solid anchor at this point not an emotional pogo stick similar to his mom. Support him.
But anything you do for her will be nothing but throwing it away. I know you don't want emotional/personal advice but this is not a financial or business issue. That part is done. So the only thing left to answer is the e/p side. Sorry if this upsets you but it in my mind is what you need to hear. DanT
Even if you found a way to make it work do you really think this pattern will change? No. She will be in the same boat in 12 months and you will be out whatever you put into the fire pit, the same as your son.
Thanks Dan, it is becoming increasingly clear to me.
He needs leadership and a solid anchor at this point not an emotional pogo stick similar to his mom. Support him.
That I have always been, I have no doubt. The ironic part is that they were nevr willing to come and live with me, at one point I lived about a mile away, same school district and everything. They always wanted to be with their mom. Afraid of my discipline, ha!
You have not hurt my feelings, you or anyone else here. A punch in the stomach perhaps, but if that's what it takes to knock some sense and reality into a guy..........
Where's Mooney? Haven't heard from him yet!
Thanks again Dan,
E[email protected]
It's Never Too Late To Become What You Might Have Been
Mooney's probably collecting rent, ejecting deadbeats, or fishing...;)
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
Must be fishing, I think he got rid of the deadbeats last week![email protected]
It's Never Too Late To Become What You Might Have Been
a person have to take reponsibilty for one own action, you know thw old saying you made your bed now lie in it.Offer your kids a place to stay and let your ex land on her butt. Let them take the house. I would never offer to buy the house or lend money.didnt you say they was a second guy , what is he doing.. 2+3=7
I would never offer to buy the house or lend money.
I looked at it as helping my kids. I am not giving to her, at least not directly. I would give it to my son. And I haven't done it yet. I'm not buying anything.
didnt you say they was a second guy , what is he doing.
Second guy sends her a grand a month for his two kids.
So my son has kicked in $900, DH#2 $1000. You'd think between her and the KFC guy they could come up with another grand in a months time?
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It's Never Too Late To Become What You Might Have Been
Eric,
Free or low cost credit counseling may be available through the United Way, Goodwill industries, (that's where part of the money they make goes), or a larger church organization, (Catholic Social Services, Luthern Social Services) But those involved need to ask for the help!!!!
There is a non-profit local group here that essentially takes over your finances, stops the creditors, teaches budgeting, and gets you back on your feet. They don't advertise, people need to really be seeking help to find them. Many are refered to this counseling group by the above listed agencies.
Taking a guess here, but your sons probably feel an obligation to their 1/2 siblings too. Maybe that's why they won't live with you, they feel obligated to protect the kids too.
Sounds like the whole situation is just re-arranging the deck chairs on the Titanic though.
Bowz
Thanks Kate.[email protected]
It's Never Too Late To Become What You Might Have Been
Eric - You need to get the ex on board to really fix the problem. Talking to your son(s) isn't getting the job done. Others have pointed out her financial inabilities, I won't waste time doing it again. Until she can handle the money and the bills properly, there will be a problem.
Credit counseling can help some; I do not think it will in this situation. Sounds like she's in deep. Is this in NY? Here, the borrower on a mortgage can always redeem right until the foreclosure sale. That means she needs to come up with all the money (a refinance). Once foreclosure is started, the list of lenders gets much more limited and the rates get much higher. She gets in deeper.
Bankruptcy may or may not be an option. I haven't looked at the new rules, but my understanding is that they require people to pay more towards arrears. The only "benefit" to filing is that it's a stalling situation. BUT, once you file, the Trustee basically owns the house, and their job is to get the most for the creditors. I've seen situations where people had a home with equity and the house needed to be sold to pay off the creditors. That's not what you want for the kids. If she's interested, she needs to sit down with a bankruptcy lawyer, asap. Don't let her use a paralegal service for this, it's too complicated. If it costs her a couple dollars for a meeting, so be it.
What caught my attention was the equity that may exist. And, like Mrfixit and others , I don't like to see it wasted. You seem unsure of how much equity there is. That's important. The numbers I saw (IIRC) were from 300-400 as a value and 250+ as a mortgage. That's a big spread. You really need to know where they are. Your wife can sell the house to anyone she wants that has the money. Blue is a real estate investor and he's talking to you like one. He's thinking of the discount any investor is going to be looking for. They come up with money fast, but they don't pay top dollar or close to it. But if the house is in a solid neighborhood, in good shape, she may be able to sell it to another private party for less of a discount. If it's worth 350 (for argument sake), and she sells it to an investor, they may be looking to pay the mortgage balance and throw her 10 grand - maybe. But if she sells it in the regular market, maybe she can get 320 and a quick sale. Remember, there are different levels of investors too. That sale could take the typical 45-60 days, instead of 15-20. Will the bank wait? Who knows. If she's in pre-foreclosure, she's got more time. If the foreclosure action was already started, she has less time. I've seen these things pushed through in 90 days in small counties. She cannot ignore papers if they are served. Saying you never received them is ABSOLUTELY the wrong way to go. She will need some legal advice and representation. The lender is probably po'ed big time and isn't interested in dealing with this any more. They might be willing to work with her a little, but more likely than not they don't care because they are guaranteed to get all their money at a foreclosure sale.
Again, this depends on her. If she's intent on burying her head in the sand, she's likely to lose all her equity in a foreclosure and nothing you can do will help. She's got to give you some straight numbers too. The banks don't usually deal with anybody except the borrowers themselves because of privacy issues.
If you want to go over any of this privately, shoot me an e-mail and I'll give you my number. NY State says I am still licensed as an attorney even though I spend much more time swinging a hammer.
Don K.
EJG Homes Renovations - New Construction - Rentals
Thanks so much Don,
You have extended a very gracious offer.
She's in CT. This is quite a mess. The more I read the more I doubt that this will be resolved neatly.
I can't really discuss this with her. She is a mess. I am trying to do this through my younger son as much as he is willing to take on. He has about had it. he is SO dissappointed in his mother.
Thanks again.
E[email protected]
It's Never Too Late To Become What You Might Have Been
Not sure what advice this might be, but at least commiseration.
Posted awhile back about a brother with a drug habit. I'd just learned about it at the time and was looking for any information I could get. Got a lot of good advice here.
He's still going through his ordeal, and has been unemployed for a few months now. He's also got a couple of teenage daughters and shares custody with his ex. Not that this has anything to do with your problem, except that he skipped his mortgage for about three months. My parents ended up paying the delinquent amount to the bank just to keep the house from repossession, but not without doing a lot of soul-searching first. They had gotten a lot of expert advice also, and one of the constants was to not provide any financial help. Period.
DB has since resumed payments to the bank, but nobody knows where the money is coming from. We think he's draining a retirement account and it'll just be a matter of time before he's back in the same mess again. When he is, my parents will stay out of it. He'll lose everything when it happens.
They've had time to come to terms with the situation. Unfortunately, it sounds similar to the situation you're in. My parents are affected by their granddaughters losing their home (the biggest losers in this soap opera), as well as their youngest son, but it has to happen this way. They are financially secure enough to buy his property, but doing that will only make things worse for him in the long run. And, unlike your ex, selling it would probably be as bad. Who knows what kind of place he'd move into, and it would put a big wad of additional cash in his wallet.
Like others have said, I don't mean any of this to sound harsh. It's commendable that you care this much. If you can convince the ex to sell, do it. Maybe even help your sons find a decent place for her and work out a spreadsheet they can give her (not you) to take some of the fear of the unknown out of it. Work out living expenses, utilities, insurance, all the little quirks to be financially responsible. Once she sees everything on paper and realizes that her life isn't at an end, maybe she'll be more receptive to the idea. Just my lame advice. ;)
I remember reading that thread.
I'm exhausted. Not a fun thing to have to deal with. My thought and best wishes to those little girls and the reat of your family as well.
Lame says who?
Thanks.
E[email protected]
It's Never Too Late To Become What You Might Have Been
Eric, not to be a smart azz, you may need to buy a new home in your name..how is your credit?
Getting her name outta the loop might be the only option at this time. Will your current wife convey with that?
Spheramid Enterprises Architectural Woodworks
Thanks Duane,
I have no attatchments what so ever to this home. It's hers, she purchased it with an inheritance, it's not something she got from me as a result of our divorce.
My kids are in a potential lurch, no matter what happens I will pay a price.
Hope the ankle is feeling better.
E[email protected]
It's Never Too Late To Become What You Might Have Been
I really can't offer much help..that sucks. Best to ya and the kids.
I think I am headed to the dreaded knife wielder, the ankle is not playing by the rules.
Spheramid Enterprises Architectural Woodworks
They are living above there income. You can refinance a hundred times but you will never catch up! The banks know this too. Maybe to late but they need to sale the property and hopefully take the cash out and try to start over in a more affordable hood. You can't live in a 350K house and work at KFC!!
Thanks, along the lines of my own thought.
E[email protected]
It's Never Too Late To Become What You Might Have Been
A guy I'm doing some work for has a similar problem. His girlfriend has an expensive home in a very expensive community. She drives a Mercedes, and owns 4 other properties, across the U.S. But she can't make her payments. She borrowed $50K from this guy's friend, and it lasted about a month before she was broke again. The whole situation baffles me.
The funny thing is, the more you owe the bank, the more money they want to give you.
--------------------------
It's only satisfying if you eat it.
Edited 1/14/2006 10:01 am ET by dustinf
A good estimator in my area is $100 of mortgage payment for every $1000 of debt. This includes P&I and average real estate taxes at recent average interest rates. This works well for the price range you are describing.
So, at $290k with $80k down, that leaves $210k- around $2100 a month.
A couple of refis, and $20k each really add up quickly. The "couple" will push the payment up tp $2400.
Now, lets add in fees and appraisal costs at around $3k a pop.
If her credit score dropped, or there was other activity like other loan apps and missed utility payments, then the interest rate will go up some more.
That $2900 is probably spot on. Her mortgage is probably somewhere between $250k (high interest rate) and $290k (low interest rate).
Probably not much you can do unless you dig deep into your own pockets or talk to a bankruptcy attorney and credit counselor. Advice is needed now. Some mortgage companies are worse than others.
Lots of luck- it will be worse for the kids.
Thanks,
Your info is appreciated. The hole may be two deep. The numbers you put forth help clarify things some too.
Thanks,
E[email protected]
It's Never Too Late To Become What You Might Have Been
FWIW stuff like the terms of the mortgage and the property tax rate and current status are public records.In many places you can get the data online from the "county courthouse". Now the mortgage information won't tell you what the current balance is (because of either penalties or back interest added or any principale paid off). But you can find the amount that it was last mortgaged for and the interest rate (which is probably a floating rate).That can give you better clue as to whether there is an equality in the house at all.
I agree with the others that you need to pull back. Some things not mentioned in your post that are important are:
$2900 a month...
If the taxes are escrowed at maybe $500 a month, then depending on interest rate and term, which I'll guess at 6% and 30-year, I'd guess off the top of my head that $2400 for principle and interest would indicate she's be carrying somewhere in the range of $400K.
That doesn't hold water given the value of the house.
If she has less equity, which it seems that she has, then that amount would be lower as she'd be paying PMI as well.
If her credit is questionable, which it is, then the interest rate is most certainly higher.
A with $250 a month for PMI and with $500 a month for taxes escrowed, that would leave her with $2150 a month for P&I. For a 30-year note at 10% she'd be carrying somewhere in the vicinity of $250000. Another guess, though, could be more or less.
Before you get overly involved in the financial ruins of your ex-wife, I'd HIGHLY recommend that you get the blessing of your wife.
With the blessing of both the former and the current, you should be able to gain access to the financial history of the property.
It's a possible minefield, so step carefully. You don't want to lose a leg. Especially your middle one.
Mongo
It's a possible minefield, so step carefully. You don't want to lose a leg. Especially your middle one.
Thanks Mongo,
And to ALL,
I know this is a tricky place. I have no attachment what so ever to the ex. That was WAY over a LONG time ago.
I am trying to develop some understanding of the financials involved so that I may offer some direction to my son who is so thoughtful of his mother. I barely speak to her. I talked to my son last night and suggested we look at the whole picture financially to get a grip on where they are and need to go. He has not a clue at this point so I figured that is a first step because no one really knows the numbers.
Maybe it won't work, but at least we will know. Maybe they can work it out. I'm not looking to pay the motgage. His older brother is in school and can provide little to nothing currently. He is actually doing an internship and is not paid much at all. So what's wrong with me chipping in a little in his name. He never asked me to pay for school so what the hell.
It is interesting how it seems that some folks can just say let it sink and walk away it's none of your business. These same folks are so pro humanity abd civil rights; I try to help a human out and I'm somehow doing the wrong thing.
Maybe I need thicker skin. I'm glad I'm sensitive.
But I will take it all into consideration. Don't think I haven't asked myself why should I care?
Thanks all.
E[email protected]
It's Never Too Late To Become What You Might Have Been
Hopefully, none of your kids have a financial interest like their name is on the loan. Then their credit will also be ruined.
I would never say "walk away", but there may be nothing you can do financially- even if she/they want your help.
It would really suck if the whole thing pulled you under, too.
Hopefully they will at least get to a debt counselor and try to get out from under the mess.
Best of luck.
Hopefully they will at least get to a debt counselor and try to get out from under the mess.
Good idea. Pehaps you could elaborate? I've seen the "Credit Counseling Co's" on TV, but always thought they were much aof a scam and more geared towards CC debt. What were you thinking of?
My son has money pain in, but nothing with his name on it. His credit is excellent. He has learned by way of example of what NOT to do.
Thanks
E[email protected]
It's Never Too Late To Become What You Might Have Been
I don't know if they are a scam or not. Certainly there are some legit outfits out there that can provde advice and planning to get out of the mess and hopefully keep the house.
A friend of mine used the Consumer Credit Counseling Service here in NH to work himself out of a credit card bind he was in. Worked out well. I believe that service is a non-profit agency.
Consumer Reports did an article about the major credit counseling services a couple years ago. There were some things to watch out for, and some were better than others.
I'm thinking, however, that this may be beyond the scope of what most of these agencies do.
Maybe the best thing you could do is find and pay for the services of a good lawyer or financial expert to sit down with at least your son, and hopefully his mother, to sort out options.
Finding the right specialist might be a challenge. One trick I've heard of for for getting a good specialist attorney is to hire an attorney for the sole purpose of referring you to the best person for your case. The first lawyer knows he won't be handling the case, but his legal duty is to make sure that the person he refers you to is qualified for the specific duties you need done.
Good luck - sounds like you'll need it!
Don
If she has equity in the house you guys need to address this one way or another before the bank starts hitting you with "late fees, penalties, and attorney's fees" incurred when they begin the foreclosure process.I hate to see them lose the equity in the house.I think I would agree with whoever said to sell the house now and you buy the next house and let them make the payment to you. When they get back on their feet in 2-3 years they can go to the bank and get a mortgage and then you're out.Good luck. You sound like an honorable stand up guy. They're lucky to have you..++++++++++++++++
-Do the thing you fear and the death of fear is certain-
Good luck. You sound like an honorable stand up guy. They're lucky to have you.
Thanks for the kind words. I just need to keep a cool head about it.
E[email protected]
It's Never Too Late To Become What You Might Have Been
think I would agree with whoever said to sell the house now and you buy the next house and let them make the payment to you. When they get back on their feet in 2-3 years they can go to the bank and get a mortgage and then you're out.
I think that is horrible advice.
I would provide information but its not a good idea to become the lender. The emotional ties makes this a very bad suggestion. Imagine how the son would feel if their dad had to foreclose the mother and evict her if she didn't clean up her act?
blue
Not gonna happen.[email protected]
It's Never Too Late To Become What You Might Have Been
It's a slippery slope your walking. Money, and family never seem to work out. I have a couple family members who haven't talked in years. All over a relatively miniscule amount of money.
That said, trying to help your son is the right thing to do, good luck.--------------------------
It's only satisfying if you eat it.
That said, trying to help your son is the right thing to do, good luck.
Thanks D, for the kind words. It's difficult to understand sometimes, but my ex is STILL the mother of my kids and always will be. While I have no emtional attachments to her, she is still their mother. Does that make any sense?
E[email protected]
It's Never Too Late To Become What You Might Have Been
"It is interesting how it seems that some folks can just say let it sink and walk away it's none of your business. These same folks are so pro humanity abd civil rights; I try to help a human out and I'm somehow doing the wrong thing."Sorry if the advice sounds offensive. i've no memory of you being all that emotional about posts here.but the thing is that your sons are adults, and you have another family to think about. Whatever you do to help the son(s) should not jeapardize that situation in any way. I don't know that situation or whether you are so wealthy that you can do this thing without feeling it, but it does seem that you will incur some resentment someplace along the way from at least one of the players in this game
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
Just wasn't what I was looking for, but hey, i don't like peas mixed in with my food.
I asked, so I have to take what comes my way.
I trust your judgement perhaps because I have read so many of your posts for so many years. So fwiw, coming from you leads me to reconsider my position.
Thanks.[email protected]
It's Never Too Late To Become What You Might Have Been
check to see if the registry of Deeds (or whatever it is called there) is on line. If it is you maybe able to find out who has mortagages on the home. They might even say the amount of the mortagage.
bobl Volo, non valeo
Baloney detecter
Youy need to support that son emotionally, and not by grabbing onto the anchor chain of a sinking boat.
America is a wonderfull place wehen a KFC worker can reside in a home that costs three grand a month.
There is clearly a psychotic break with reality for them to try to continue in the current housing arrangement. Help the ones who deserve it after they break from the losers. Otherwise, you become an enabler and help no-one.
Welcome to the
Taunton University of Knowledge FHB Campus at Breaktime.
where ...
Excellence is its own reward!
Otherwise, you become an enabler and help no-one.
Truer words...........exactly what my son is doing now. I had a long talk with him last night. He is very upset, not just over the situation, but in seeing his mother in the state she is in. See my ppost to Blue above re: the work ethic.
Not a good situation and no easy fix.
Thanks Paul. Hope you are feeling better every day.
E[email protected]
It's Never Too Late To Become What You Might Have Been
Eric, it sounds like you ex is in depression.
blue
Eric, it sounds like you ex is in depression.
Tip of the iceberg Blue, just the tip.
It's really quite sad. She was a beautiful vivacious woman once. I had to wonderful kids with her and called it quits after less than five years. Among other things, we were way to young emotionally I think. Both in our early twenties.
She's needy, went on to marry again and have more kids, got divoced, had another with the KFC guy. Having kids makes her feel needed. i could go on, but it is a looooong story.
I hate to see this happen. I'm NOT the saviour. I can't put out the fire, but I can pass the bucket.
Eric[email protected]
It's Never Too Late To Become What You Might Have Been
Eric,
It sounds like she refinanced a couple of times, got into more trouble and then approached countrywide for a repayment in arrears arrangement. With this type of deal they basically split up the late interest owed over a period of time (18 to 24 months) and add the regular mortgage payment to it. The rationale behind it amazes me because if they can't pay the original payment, how can they pay a larger payment? Sick isn't it?
Anyway, if you miss any payments on the new repayment schedule, it goes to preforeclosure. Countrywide will not deal with it any more. The credit rating gets smacked and the only out is either a new refinance or sell it while its in preforeclosure to a professional investor (not the fly by night type, obviously). First attempt should be a refinance with a subprime lender. They will charge huge points, but the points are rolled into the loan, not out of pocket. The payments will be on the high side, but should not be as high as the Countrywide repayment schedule was. It sounds like there is enough equity in the house to make it work.
Assuming your name is attached to this house, or your son for that matter, try Ameriquest Mortgage. They specialize in subprime lending. Go direct, not through a broker because they will amplify the problem. You can access them on line, or in a local office.
This will give you the stall time needed to repair the credit rating and you won't have to displace your boys. Then you can concentrate on the live in loser problem.
The CM
Edited 1/14/2006 11:35 am ET by the cm
Edited 1/14/2006 11:37 am ET by the cm
eric... i liked blues posts best..
my take ?.... your wife is just ahead of the wave.. there are so many people in her same situation..
and i wouldn't worry about the equity... it ain't there... the equity = the difference between what she owes and what someone else will pay before foreclosure or quick sale..
there are no quick sales unless a house is WAY WAY WAY below "market value"..
and guess what..
market value has not been re established ... there are no sales in that price range
she shold have pulled the plug before the new bankruptcy laws went into effect.. at this point she should be talking to a professioal about her options... which are extremely limited
but hey, whadda i no ?Mike Smith Rhode Island : Design / Build / Repair / Restore
but hey, whadda i no ?
You know plenty and then some.
Thanks Mike.
E[email protected]
It's Never Too Late To Become What You Might Have Been
It sounds like she refinanced a couple of times, got into more trouble and then approached countrywide for a repayment in arrears arrangement. With this type of deal they basically split up the late interest owed over a period of time (18 to 24 months) and add the regular mortgage payment to it. The rationale behind it amazes me because if they can't pay the original payment, how can they pay a larger payment? Sick isn't it?
Just the interest or late payments as well. i believe that this is what she has done and somehow she got 12 mos to do it.
or sell it while its in preforeclosure to a professional investor
Explain to me if you would why it would have to be to an investor and not on the open market? I think it was Blue that mentioned the investor thing as well. As in they would buy it and do what?
Assuming your name is attached to this house, or your son for that matter, try Ameriquest Mortgage.
Just her so far as I know, it is her house I never had any part in it. My son has helped her with the payments in the past year or so to the tune of many thousands of dollare. Does it matter so far as your original advice to go to Ameriquest?
Thanks for all the help, this is the kind of info I am looking for.
Eric[email protected]
It's Never Too Late To Become What You Might Have Been
Eric,
The interest and late payments as well. They stop applying to the principal.
Once it goes into preforeclosure, depending on where you live, there is a very limited amount of time to act. There is usually not enough time to put it on the open market unless 1) your market area is very hot, 2) you are tight with a good realtor who has a buyer in her pocket currently looking, 3) you can price it just below market value, pay the realtors commission and still come out ok.
Since you and your son do not own the property, and it will not affect your credit rating, I don't know if it would be worth the effort. Unless of course your son has an interest in living there or turning around and buying the property after the bank takes it back (for much less than market value).
If your son is that interested in staying there (owning it) and capable of making payments himself, then there's another option. Approach Countrywide with an offer to purchase the property for whats owed on it (only if its market value is greater). They will wheel and deal if they know that they are not getting any more payments and have to pay out to foreclose. Its a pain in the butt for them to foreclose and it costs them big money and time. They would rather break even at this point.
In the event that your son is not capable of purchasing the house, and you have no interest in purchasing it yourself (the equity is substantial and it might be a good investment to re-market later) from the bank for what's owed on it, take your boys out of there and walk away. Your ex will never change. Tell her to get a new boyfriend that will support her this time. (Sorry for being so blunt).
The CM
Edited 1/14/2006 2:27 pm ET by the cm
Approach Countrywide with an offer to purchase the property for whats owed on it (only if its market value is greater).
Can anyone do this or would it be a relation only? What about the possibility of her buying back the house from this hypothetical person if he held the note?
You've been VERY helpful and I appreciate it.
I don't recognize your tag. have you been around here much?
Thanks again,
Eric[email protected]
It's Never Too Late To Become What You Might Have Been
Eric,
Anyone can approach the bank, provided they are qualified buyers. It helps greatly if you have been approved for a mortgage (by some other bank) ahead of time. Leverage is everything. Cash is king, but with approval in hand and a promise of a thirty day closing, you have leverage and their interest.
The professional investor will want full market value to justify his investment and her credit will still be too damaged at that point to qualify.
Just came on a week or so ago. Glad I could be of help.
The CM
i didnt read the rest of the posts, so i dont know if this is covered. assuming she has sufficient equity in the house to make it worth keeping, i would advise consulting with a good (not the lowball mill) bankruptcy attorney. filing a chapter 13 can avoid foreclosure, and can give her 3-5 years to catch up the arreage.
Now that you bring it up.............I think she did eleven some years ago.
Would that disqualify her?
E[email protected]
It's Never Too Late To Become What You Might Have Been
I was married for about 10 years and then got a divorce in 1991. My ex had financial problems and I ended up helping her out (in addition to what I was paying in child support).After a few years she wanted to go to college and I helped pay for it. I looked at it from the perspective that whatever I did would benefit my kids.It worked out and she ended up getting a degree in nursing and no longer needed any help financially. .++++++++++++++++
-Do the thing you fear and the death of fear is certain-
Not often we hear a happy ending! Good for all of you, it worked out well.
E[email protected]
It's Never Too Late To Become What You Might Have Been
"Now that you bring it up.............I think she did eleven some years ago.
Would that disqualify her?
E"if she did an 11, that means she was self employed or otherwise did not have regular income. the same rules would apply today if the facts remain the same. she can obtain a discharge of debts no more than once every 6 years. but she's not looking to discharge this debt, she is looking for time to catch up. depending on her assets and other debts, she may want to do a chapt 7 to discharge all the unsecureds, then file a 13 to work out the arreage on the house.
I'm sorry to hear of your son being in a position to lose on this deal. That's a tough lesson for sure.
I doubt if there is anything that you can do. Probably too late.
On the personal side, I'd focus on helping your kids when the ex falls apart. When hit with the big slap of reality, some adults cowboy up and handle things better afterwards. Some just fall apart and may take years for any sort of recovery.
If your ex is unable to accomplish anything and will be foreclosed on, she might be able to give the lender a "deed in lieu of foreclosure" which would perhaps at least help her future credit rating.
If you really want to jump into this, the first stop is with a real estate attorney to see what really might be done.
Life and suffering are inseparable.
Thanks Has,
The vast resource of knowledge contained within this forum never ceases to amaze me.
Everyone has something worth while to offer.
Thanks.
Eric[email protected]
It's Never Too Late To Become What You Might Have Been
quick story - similar situation - my sister married an old friend -they inherited his father's house - he took out a mortgage - didn't pay - house going to be foreclosed on - offered to buy it as long as they understood they would be tenants - they didn't want that deal, wanted me to "hold" the mortgage but it would still be "their" house - I said no, they lost the house - moved into our parents rental house (2 fam)- haven't paid rent for 10 yrs, husband said he shouldn't have to pay, he's "family" - they're now divorced - still no rent, sister doesn't work - keeps maintaining she's not a tenant, she's a "daughter" - house is getting wrecked - new tenant wants some improvements, but his rent is what pays the taxes - no money from one unit= limited money for improvements - parents can't do much as my sister keeps telling them she and my niece/nephew will be homeless if they push the issue of rent and maintenance - me, I just pay bills - new boiler for my parents (after my sister stayed at their place and cracked the steam boiler - she also cracked the boiler at the apt - $7k gone)if you want to help your son, do it but realize you may lose a lot of money - if you can do something to have your son buy the house with you as a co-signer and the rest of the "family" as tenants, it might - note MIGHT - be a good investment - BUT you'd better figure on helping with the paymentsnot a good situationgood luck
Edited 1/14/2006 9:05 pm ET by firedude
IMHO cm hit on a good approach to an alternative. Places like california that have expensive homes which the average home owner cannot possibly afford have financial institutions that offer ONLY interest home loans. People can thus afford the payments. Personally I would never go this route but your ex may can go to a bank or lender and offer to refinance for interest only. Down the road "if" things get better, refinance again for a conventional loan. The property will appreciate in value on a interest only loan so, if "things" didn't work out down the road she should be able to sell the property and regain any capital gains from the property as long as she was current in payments. The thing to remember in the beginning of a conventional home loan not much of the payments are "principal", so the interest only loan may or may not actualy help her out in monthly payments. So this will depend on how long she has been paying on the original and subsequent loans.
At any rate good luck Eric..........
Semper Fi
Edited 1/14/2006 9:21 pm ET by Jarhead
Thanks Jarhead. Good ideas.
E
[email protected]
It's Never Too Late To Become What You Might Have Been
one of my sisters got "foreclosed" ...
went thru a bad divorce ... got the house ... which she couldn't afford ...
and refused to sell and downsize.
coupla years later ... ever with all the help from my parents ... who were pretty much spending their retiremement to support her ... the bank finally ... after many false starts ... officially foreclosed.
Best thing to ever happen to her. I told her I could either help her stay there ... for another coupla months ... or happily watch the bank force her to get her sh!t in order.
I sat and watched ... called on the official eviciton day and said Congrats! Her credit already sucked ... she was lucky to finally cut loose a white elephant.
Get on with life. She didn't want the ex to "win" ...
well ... in the grand scheme of things ... he did ... and he kicked her a$$.
Now ... time for a new game.
she cried to our Dad about how mean I was ... he told her the same thing.
stop crying and grow up ... again.
Just about one year later ... she's much better off.
people that actually want the money owed to them ain't always so bad.
Good lesson for the supposedly adult kids too.
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
Some of the suggestions have been to try to help your ex. Now that I've thought about it I realize it would not be fair to your new wife for you to write out a check and hand it to your ex. I think I would be in a lot of hot water if I did something like that.Something that has worked for me over the years is when my kids come to me with their hand out, I offer them a job and a chance to earn the money. I give them a list of things to do and some times it's just working around the house. If nothing else, they can clean this rat hole we call home. I hired a professional housecleaner recently and she charged $25 per hour. When my daughter asked for $300 for "spring break" I said ok but you'll have to earn it and she worked for the money. I've told my kids if they have an emergency and they're "riding the short line" and broke they can let me know and I'll try to help them come up with some kind of job. But they have to give me some advance notice. In other words, don't ask for money the day the car insurance is due.When I was a teacher I got to know the kids pretty well and one young man was very ambitious and he spent his senior year of high school working full-time each and every weekend. The $ added up and he bought a car this way..++++++++++++++++
-Do the thing you fear and the death of fear is certain-
Jarhead -
Those interest only loans are usually fairly short term (maybe five years) and then you're staring at a humongeous balloon payment. The concept is to keep the monthly payments down while equity builds up due to rising home values. You then either sell, refinance, or hit the lottery so you can pay off the loan.
The upside to these loans is that more people can get into home ownership. The downside is that they must NEVER forget what they're into. Like the Chinese say, "If you decide to ride a tiger, you better know how you'll get off" - lol
She might want to pick up the phone and call several realtors. Tell the realtors she's considering selling the house and would like an opinion as to the value. The realtors will come over, walk through, and give an opinion regarding listing price. There's no fee for this and no committment.Your ex can then put the house on the market FSBO and with any luck will get it sold quickly. If the house is located in a good area or on or near a busy street there's a good chance it will sell quickly. 3-4 years ago I owned a house on a busy street and I put a sign in the yard on friday and had it sold three days later (under contract). I'm not in any red hot real estate market here where I'm at.If she doesn't have any luck selling it herself she can list the house with one of the realtors who gave an opinion. They're happy to take the listing, even after the seller tried it "for sale by owner".If she can sell it herself it will save her 6% realtors commission which is $15 to $20 K and a tidy sum of money.On a side note, a friend got in trouble several years ago and after some "reshuffling" with the bank he got his loan "restructured" but at a whopping 11 or 12 percent interest rate. After 6 months or a year of excessive payments he became angry and bitter and quit making payments. The bank foreclosed. He had paid 10 or 20% down when he bought the house and should have had some equity. I think he became angry and bitter every month as he made the payment, knowing he could rent a similar home $300 or $400 per month cheaper. Bottom line, I think your ex is making a mistake if she gets her bank to restructure or another bank to give her a new loan if the interest rate & monthly payments are excessive & leave her stretched to the limits each month. .++++++++++++++++
-Do the thing you fear and the death of fear is certain-
The bank may have little financial motivation to talk or cooperate much. The mortgage was likely calculated on the home as priced five years ago. If they foreclose now they can have the property repriced given the tighter market.
They also might be motivated to act now to foreclose simply because the real estate market is softening and their option to take advantage of the runup in the last few years may close if the market stumbles.
The likelihood that interest rates will continue to rise is also a consideration. If they get the property back and set up a mortgage now they will have more people who can qualify. If they wait the interest rates will be higher and the number of people who can qualify, and so the level of competition for the property and any runup, will be diminished.
Eric,
Don't be made to feel silly or stupid or overly sentemental for trying to help your son.
My ex's second husband was real winner. On the day before the sherrif's sale they had not moved one single thing out of the house. So I got in my truck, drove across town and spent all day helping them move. Because I was a nice guy? No I would just as soon have slit their throats and burried them in shallow graves. BUt at the time, the ex had custody and if things didn't get moved out of the house before sale, it meant that my son's things didn't get moved. So, I helped the ex and her dirtbag husband move.
It's what we do.
Having said that, based on my own past experiences, I could write a book about a very similar subject. Best thing you can do? Let her lose the house. Sit down and explain to your son that he is welcome at your home for as long as he needs to be there. But, as long as he chooses to stay with mom she's gonna suck him dry. And, no matter what you do, she's gonna lose the house anyway.
On another note. IF you do go the Credit Couselor route, call Consolidated Credit Counseling. Too many counseling services make money by negotiating down how much the Credit card or loan holder will take. Then you pay in full to the counselor. With Consolidated you pay the full amount to you creditors thru Consolidated and later on down the road it doesn't show up as a charge off. They make their money off of a small monthly fee. A counseling company might be able to help with the Mortgage even.
One thing about going that route, They will evaluate income and living expenses and come up with a monthly payment, and you WILL pay it or the deals off. In my case I owed $60K out of the original $100K I had owed and my monthly payment was $1050, automatic draft was mandatory. Best move I ever made.
We used Consolidated After my daughter was sick and although it was painful to pay all of that off, our credit is still intact. Also, maybe you and your son want to talk to the EX and see if she'll let you talk to the bank. No bank WANTS a house back. They only take it if you force them. Based on your feeling that they are being unreasonable, I'm betting it's worse than you know.
I know how you must feel right now, but I bet if she loses the house, and your son is off the hook for what ever he's doing for her now, he'll fell like the weight of the world has been lifted.
update?
--------------------------
It's only satisfying if you eat it.
They are still in the house. There were some "accounting" errors on the part of the finace institution that lead to us believing the situation was more dire than it really was.
The worst is over as now the monthly payments will be a bit more managable; down to 2k from $2900.
The ex finally got a real job (again) in the city (ny) as she has pretty much dried up the well locally.
I'm working with my two kids (2 of the 5) to help them deal with this as much as I can with out having to contribute a lot of money. There is no reason I should be contributing to her mortgage especially when I don't own a house of my own.
It's a f'd up situation, and not likely to ever change a whole lot.
Interestingly though, her father was VERY successful with a body shop and a million in ral eastate when he died. This is what she has left from a three way split afte less than ten years. her dad is rolling in his grave I'm sure.
Thanks for asking. And thanks to all for the good words.
Eric[email protected]
It's Never Too Late To Become What You Might Have Been
btw ... one possibility I told her and her boyfriend to look into was let the foreclosure go thru ... get the paper work started ... then have her boyfriend ... who owns a coupla other rental houses ... call the foreclosing agent at that bank directly and try to buy the house at the discounted/foreclosure price. There were no liens/etc as she was just behind in her mortgage.
figured that way ... on an off chance ... he'd pick up a cheap house with a known history and she could now rent off him instead of getting farther and farther behind in payments.
he looked into it ... said the numbers might actually work ... then she talked to some crack-head lawyer that convinced her they could fight and keep her in the house. After paying the lawyer some low rip-off fee's ... coupla months later ... she was out on the streets. Woulda been nice to see if my master plan could have worked?
Now ... she's living with said boyfriend ... so all's well that ends in foreclosure.
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa