What a sad time when decent, well meaning people are losing their dream homes. I have been working with a young man who one year ago, bought a 3 unit home in a great area of a local town. He did not use a buyer agent and totally trusted a mortgage person that he began to work with. Unfortunately this guy did not do much homework and believed the mortgage agent when she told him that he would have a 7% rate, $5,000 in closing costs and payment approximately $2,000 per month mortgage payment. The home was owned by a friends parents, so no listing agent was involved either. When it came time to close, the interest rate was over 10% and variable, the closing costs were over $10,000 and his payments were $3500.00 per month and going up. He was able to hold on (barely) for about 8 months and then one of the tenants stop paying rent. He then had to evict and could not make the mortgage payments any longer. In the course of the eight months, he used all his savings and retirement money and put the home on the market. We have dropped the price drastically and have done all the paperwork required to deal with the bank. (tax returns, paystubs, letter of hardship, copies of bills). We finally got a very low offer that was vehemently denied and are at a standstill. This guy does not want to foreclose and have this home over his head for 20 years, but its getting close. Foreclosure is set for mid October. I will let everyone know what happens, but I am frustrated with the entire process. My seller realizes that he should have walked at the closing, but thought he had 3 days to rescind and of course then it was too late.
People need to know that with any large purchase, consult a professional, get advice, do their homework, and be informed at the closing. The attorneys are there to make sure every aspect is understood. I am sad to know that this is probably not the last short sale I will be dealing with and it is a depressing thought for someone who really loves her job.
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