I CLOSED ON THE HOUSE!!
Exhausting stressful day ( was working on last minute things all the way up to close).. but I now own the house.. on my own and it is no longer in foreclosure
Value (after real estate fee) $488k if I were to sell
Has not sunk in yet..but it will in the next few days or once I can sit down and relax.
Thanks for all the advice and support. I could not have done it without this forum.
This marks the last big thing to get rid of or to clear from the 'downfall' years. the 2 flat will fall away on its own and I will start to contact folks (esp that one guy) in about 8 months once the 2 flat drops and I have gone past the 6 months prepay period.
I am excited to start new plans and ideas now (but after a weekend of rest).. Wow!!! The loan came through.
Archive for January, 2014
Closing tomorrow at 1pm central time (but still do not have closing docs. they say they will send tonight or first thing.)
A little anxious.
Will take out $21850 in cashiers check for closing
$4000 misc unknown costs (hopefully less!so get to take some of this back)
On a high note the old lender has paid my insurance for a year and is not asking for a refund so insurance is prepaid.
I will put the rest of my savings in a tax escrow $10k
I get paid tomorrow too
First payment on the new loan March 1.. $2970
Need to exit that loan asap.. yearish
i am seeing a financial advisor tonight (set up after reading Tasha's post) bad night for it as I am wiped but still going..
I will grab a book on the way home and am seriously contemplating taking tommorrow off as sick, partially sick or work at home. .. really want ad need a 'break'. I just want to feel I can 'sit down' and relax.
I will update after close and feel excited when I can say 'wow I really did it' once I am complete w that.. has not really sunk in yet.
thanks for the help. think of me at 1 central.. prayers no more issues crop up.
Quick question to all.
No closing time yet
I pay doublepayments on my car. I am so far ahead I do not have to pay anything at all until 6/2015. Interest rate 3.15. Left to pay .. around $17800. Months left at doublepayments -17.
With the new payment for the house.. I will have a very difficult time saving .. especially once I lose the 2 flat.
I was considerinng stopping payments on the car (total cost of this for a year is a $600 interest charge that will accrue) and instead use the doublepayment amount ($1008) each month to quickly build up my rental emergency fund to $15k and my other emergency fund. With the house payments I want to be as safe as possible.
For those that do not know.. my house payment will be very high (12% hard money lender) for a yearish and then I can refinance out with a normal rate/cost loan.
House update.. BPO guy called.. set up for 5pm. cancelled at 2pm. called at 4 rescheduled for same time.. cancelled at 4:10
Broker called and got in touch w lender. they just want to go with $297k.. Settlmement is $297,500. They rounded down. I asked broker if they would go higher. he said unlikely for them to go over settlement
So cash needed is approximately
$4000 (other costs??)
$10000 tax escrow
Talked to my CPA friend .. he suggests I DELAY closing til next month to save on interest.. lender wants to close FRIDAY (maybe they are not aware of extension or have some month end target)
I talked to broker in 30 minutes ish (after I talk to my friend for what words to use) and will ask if we can close in 2 weeks..
Whatever date we close. I will ask my Mom/Aunt for assitance. Aunt had previously 'pledged' $7000 but (as you recall ) loan fell through so never got it. She may help w that again or not.. Hopeful!
I have $30,000 (but can make up tax escrow on next check. you will see I am $3000 short). Tax escrow goes to me.
VERY TIRED. I want to be excited but still rushing around.. excitment will come after the dust settles I think.
More news today. Broker sending letter of intent and then loan docs in morning. I need to pay for insurance and get that set up tomorrow.
BROKER just sent letter of intent and it says 'closing date 1/31 time being of the essence'. I will still request a later closing date.. even next week.. I have taken so much time off work, have the extension and want to extend the time I pay no interst..
More news soon. thanks for the help guys.
news from lender. not super awesome
raised value to $420k (hellooo)
new loan amount $273k
with payoff of $297500, points, fees, tax escrow I would have to come up with $54880 to close
Broker was 'disappointed' and already asked lender if they could go up to 70% LTV>. (no response yet) but resulting loan would be $294k and I would need $35640 to close (with payoff, points, fees, tax escrow)
Had another (last one I am calling!!!) lender say this was impossible
Because a thing seems difficult for you, do not think it impossible for anyone to accomplish. - Marcus Aurelius
Broker called back.. "lender wants deal' they are ordering ANOHTER BPO (their cost).. tomorrow .. and will go w that value or $440-450 whatever is MORE but only 65%
Praying for good news. I am in SERIOUS NEED of good news.
Called realtor who did my report.. asking for thoughts on how to deal with new BPO guy... . would love it to come out at $47-$480 or MORE.. need to retain cash.
News soon. Thanks for pulling for me
Realtor appraisal ( very well written and substantiated)
List price $550k
Sales price $515-$525k
Wow! Average price in subdivision $575k in past 6 months
bank who owns mortgage/house now gave me an extension til 2/28
My broker sent the appraisal to the new hard money lender and we await the (hopefully) increased loan value. Settlement w old bank is $297,500. Lenders points are 6. Interest rate 12%. I have $33k and the potential to raise $5-15k more. Any overage I decided I will fully fund the 'rental emergency fund' so that is at $15k
(for those who asked I have no other option to keep the house except to settle out w the bank.)
Broker called. He is at some lenders convention in Dallas and the PRESIDENT of the company we are going through for the loan was there and they had lunch. President said they really liked the deal, neighborhood and the house and will Definately look at realtor report.. also said he may go to 70% to do the deal. Realtor sent me a text asking for my email addy and is sending me questions tonight for his report. Target for his report Monday 3pm
I want $312k.. 65% of 480k or 70% of 445k
This means I only have to come up with $7-8 grand and $10 k tax escrow (that I hold) and $1060 for insurance.
FINGERS CROSSED and prayers.
Payment tho w $312k is $3120.. need to exit loan asap!!! (but looks like have to hold it a year).. need to get rid of that 2 flat and continue to verify the loan requirements for my exit lender so I am sure to meet them.
312k at 7% is only $2075 or 6% $1870
Mark (this is the mortgage broker),
It is my position that the BPO should not be seen as relevant. Guy was not local, was unfamiliar w the area, has very little experience pricing and selling homes as a whole and all the homes he did work on were lower priced short sales. He also admitted to me he could not find enough relevant comps and the report itself contained major errors which either indicate lack of knowledge or extreme carelessness. I am unclear on which one or both as some of the errors do not make logical sense (it is not logical to think having more than twice the lot size is worth $480 more or that square footage can be adjusted at $10 a square foot ). This guy got so lost on the way to the home.. I had to drive to meet him 'where he was' and lead him to the house
Major errors exist in his report such as
1. comps from different zipcodes, totally different neighborhoods, different school districts. "comps" were not relevant
2. undervaluing lot size (adding $480 for a 1/4 acre lot size difference, for example)
3. mis-stating relevant facts on my home as well as other homes
missing fenced yards, finished basements, updated items, major improvements
mis-stating lot size for my home and other homes
listing a 'crawl' as a full finished basement
average rent on the home is $3200, not $1200
4. adding square footage adjustments at the value of $10 a square foot
5. some comps were frame (vs brick) with no price adjustment
6. failing to account for updated status of my home as compared to other homes
My home has new kitchen, baths, tile, expert finished basement. Many comps had brown VERY old vinyl, old cabinets, kitchen (evidnet in pictures easily available online)
7. using 'distressed sales' as comps including one auction sale and short sale properties
As you are aware I have asked one of the top realtors in town to come over today at 12:30 to give me a fair value of the home. I expect that value to be around $470-490k but will wait for his report. I will ask him to substantiate the value with comps and whatever else is necessary to send to the lender to revise their value.
I still do need to close by 1/31
Thanks for your help. It is really appreciated
BIG UPSETTING NEWS!
I was concerned w the BPO guy.. he was from over an hour away, lower working class town and got so lost on his way I had to drive to get him and I did not connect with him personally very well, but I still thought the house value would be clear to him w the comps I had, homes in area etc..he did not take hte comps or info though
He MAJORLY LOWBALLED THE BPO!!!!!!!!!!!!!!!!!!!!!!!!
He put the house at $397k (the bank I am buying it from even had it higher -at $430k) . I have the BPO and he used homes in different ZIPCODES, frame vs brick, totally outdated etc.. no finished basements and differnt neighborhoods.. not similar neighborhoods at all... I called him on it and he said 'I could not find comps and your comps were miles away"
My comps were 1.1 miles away and he is an idiot.
Anyway.. long UPSETTING story short.. my broker thinks this guy is an IDIOT (I AM SO UPSET I HAVE ONLY A WEEK LEFT ) and he will talk to his lendr tomorrow and suggested I have a realtor dispute the comps. He will tell the lender I am doing that and will have it shortly. I called the best realtor (or most well known) here in town and he is coming over at 12:30.. on a coincidental note he lives in the same subdivision and was shocked by the BPO price.. and he knew the house (from the outside)
He comes at 12:30 and will write something up soon therefater
Broker says he has seem low BPOs before .. but none so poorly done or so off. He has seen them disputed and values increased though . This guy put $500 for the difference between a .16 acre lot and my .67 acre.. did not include all sorts of stuff.. jsut VERY BAD...I looked thsi BPO guy up online and dug up all sorts of bad things on him too.. I AM SO UPSET.. can hardly talk anymore.
I am going to neaten up the house again (pretty neat from the other day) and read and go to bed.
I WILL get this house damnit! and I need to get this loan firmed up ASAP
Business loan fell through
Low rate person fell through
Got 1 lender w 7 points, 18 months, 12 percent, wants an appraisal first and can not close by next week
and 2 at 12% ONE YEAR.. also want an appraisal..and can not close by next week
I need to firm up this 'bird in the hand' immediately.
Thanks for listening and the support.
BPO guy just left.. hoping for $470-480k. I should know TOMORROW
Low rate lady was not able to come through
Referred me to 2 other guys (1 has not called, 1 is at 13%)
Got other acceptances contingent on my sending in various things but n one less than 12%
Have not had time to submit all info for business loan.. will submnit today or tomorrow
providd they increase loan to 65% of whatever value BPO comes out at , if house values at
$470k. I have to come up with $14k + $10k tax + pay 1 year insurance
$480k.. I have to come up with $8k + 10k tax + 1 year insurance
Hope to hear TOMORROW
I want to get a firm approval, amount and close date
Title in works
if house value at only $450k I have to come up with $22,900 (OUCH)+ $10k tax + one year insurance
I showed BPO comps, pictures of house before I bought and after and a list of changes I made . he said he was not able to 'take anything' from me so just 'viewed info' and left it
he said he felt 'ok' w value if comps were within 1 mile or so. I have a ranch so hard to find comps as their are less ranches but my comps are between 1.1 and 1.7 miles away
BPO TOMORROW at 2pm. trying for $470k
orderd title ,, takes 2 days
good call w LLC loan folks.. lots to fill out and submit
NO NEWS from lower point lender (although she did ask for more documents)
I want news from her.. feel 6 point guy is just too much cash!
Wish me well on the BPO..
Realtor was in same area code but not from a large office or one I knew.
Thoughts on how to make the house appraise higher ??(outsdie of comps which I have)
Hi all. Update.
Not as much news as I had hoped but one more day gone.
Today was a bank holiday so banks/lenders not open.
I did not hear from the 4 point person (she was off)
1. set up BPO for this week.. asap
2. order title (assuming the close) $5-600
3. conference call with business lenders.. 5-9% (but may not be able to close in time).. expect no final word from them until Wed or so
4. hear from 4 point person
I REALLY want the 4 point loan . I do not want to have to come up with all this excessive cash when I do not have the 'rental home emergency fund' fully stocked at $15k and being so close every month .. just lots in the air.
Exit plan.. got a lender who can loan at 2 points over whatever the 30 year rate is at hte time.. when I have owned hte house for a year (so year and a day).. provided my score is 640+, the foreclosure situation is CLOSED in someway.. (short sale best.. sold is worst but just closed).. Costs would be almost normal loan fees.. no points and can do 30 years. This rate is NOT high because the only other potential loan is FHA and their premiums, fees are so high that 2 points higher is still LESS than them. Besides it will be hard to qualify for FHA in a loan.
Either way I have these loans for 2 years but need to get out of them asap
so . say if business loan comes through (5-9%) and is longer term.. 15 years. I will just refinance right away (actually after 6 months).. hard money folks have a 6 month prepay penalty
I am proceeding with ALL loans at onnce so I am sure one will work out by the 31st. 6 point guy is confident he can close by 31st and nwo that I understand what it takes to close. I think 4 point person can too (if they accept me.. helloo.. need to know that asap) and what the house value is and loan amount.
I will withdraw $30k from Barclays tomorrow to prep fr close. I need final amount asap.
It looks like 12% is the rate I will get. No one has beat it.
1. 12%, 4 points, 2 years(that is a verbal,. they are still reviewing, formal offer Monday. Thsi is being house underwritten so may be able to stretch loan to value some which is a BIG plus. see below)
2. 12%, 6 points, 2 years
I also have a business loan application in the works (LLC real estate busienss.. sortof a long shot but if it it works I have NO POINTS and 5-9%) I am getting help on that and will not know for likely a few days or a week
1. proceed with loan #2 to BPO (brokers price opinion).. same with loan #1. I need as little down as possible.
I initially had the loan amount as between $292,500 and $297,500. Problem was I had NO IDEA points or closing costs would be so high (now I know). That is approx 65% of a house value of $450k. I do not feel comfortable coming up with 4-6 points, $10k taxes escrow and potentially $4k closing costs... (see my side bar I have essentially $30k) and my personal and rental escrows are not at full amount yet.
(I am figuring tax escrow because there is no way I can escrow $8-900 a month for it.. so I need to set that cash aside up front)
PLAN. I pulled comps again and have comps at $470= (real comps.. not stretching it). I have asked lender 1 and 2 and to see if they can either go up to 68% of $450k or 65% of $470k. rthat is approximately $305k. I will have news only after the BPOs (realtor comes out and give value of house) this week. If they can do that (increase the loan amount) .. the 4 point person nets out to a cash down of $7500 (points/cost overage), $10k escrow, $1030 (pay insurance a year up front. they require it).. 6 point guy comes down to less than $30k
I have paid for the BPO ($250) for lender #2 and will set that up asap. And call lender #1 Monday for news.
My mentor say the only way he can help me on such short notice is to buy the house himself and lease it back to me (no way!)..and at 13% interest and unknown costs.
I do have my exit plan fairly well cemented.. so I only need the loan for just under a year.
More news Monday (and hopefully 4 points people come through. they are doing a CMA now and if it is strong enough will not need a BPO or appraisal)
I am still in the game.
no big update yet.
I hear today on all the rest of the lenders. FINGERS crossed for a lower rate/cost loan.
Current front runner is 6 pts, 12%, 2 years (expensive)
I can refinance out in approximately a year though.
I will work on lining up business credit as my next activity after the house settles in some way. IF I had business credit I might have been able to do this cheaper or easier. I AM applying for a business credit loan (I have an LLC) at between 5-9%. Had my accountant write a business plan, financials last night. PRAYERS that works. that will significantly cut my costs. (will likely take more time though to get a 'final approval' but hoping for preliminary news today with 'contigent on.. blah blah' If we can get approved. I am sure my accountant and I can come up with whatever doc needed. (but I have the past BK and foreclosure. ) we will see
I work 'at work' today and have a 1 on 1 with my boss today.. I work at home 2-3 days a week which has been a LIFESAVER during this process.
Looking forward to getting good news today and making decisions.
NEED the house to appraise out at $470.. will revise my loan with the 6 point, 12 % , 2 year guy to $470 so BPO person has new target to reach.
Thanks for all your support. Today and the BPO or appraisal day are the next big days. HUGE days. After the appraisal is when I will know the actual loan amount.
House update #4.
I am EXHAUSTED and stressed from managing this. and working full time
(k ....no time to be tired at all)
1. 5.5 points, 12% but wants tax returns, proof of income etc. I have (sending this am)
2. 4 points, 12%, wants above info too
(I feel these are not really accepted until they have reviewed my info.. and they want BPOs. brokers price opinions but just pulled new comps.. house may appraise higher than 450)
The below are in the works (these people appear they will be LOWER)
..basically 3 brokers.. 2 of which wnat me to send 6 months bank statements, paystub and personal financial (in the works in this am)
I shoudl hear from these lower rate 3 on FRIDAY (tomorrow)
the above 2 acceptances are being told I need a day or two to think on it (while I still feed them docs)
ok talked to my mentor (relieved and happy look)
He thinks he can help me find the money too .. was impressed with the deal (wowzer).. he can only lend at 12% w 4 points but w him, I would assume no issue with docs (not that I can not prove income just my financials have been complicated) he is ALSo going to talk to some folks who have IRAS/401ks or just $$ and see if they want to lend to me.. 18 months. Hopeful look
My mentor on the 2 flat thinks I should definately short sale it (thanks 'anotherreader') and he wants to handle it (dependent on his review of info I just ssent). If he handles it I get a cut of the profit (few grand) and he can time the short sale as we need too so I can keep collecting rent to help with costs.
NEWS From Mentor today and tomorrow
NEWS from lower rate guys tomorrow
Other (higher rate guys) are held off to tomorrow
I have $30k liquid cash and think I can get $10k more
I do not want to disturb my emergency fund for myself or the '6 homes/3 units'
Onward. It is 10:30 here. hope to have all docs/info sent by noon.
if my mentor says ok to short sale I will call bank and get that started
Update from today
per foreclosure attorney..
1. 'deed in lieu'.may show in credit report but does not show on court case. case is dismissed once deed given back
2. he does not think other side will want to do deed in lieu because of extra attorneys fees.. (I will need to call them)
per real estate attorney
1. I can not buy something from myself and call it a purchase.. he is not very creative but very good
1. I can purchase from myself if I use LLC/ownership details
Offers so far
1. 6 points, 12%- 2 years
2. 4 points, 13%-1 year, renewable in 3 month increments
I have asked both to go back and see if they can get better offers
I am still pending on 3 more offers.
Loan amount will be determined based on broker price opinion/like an informal appraisal by a local realtor (so loan amound and $ I have to come up with is fluid until themn.. will not know how much I have to come up with)
On a GOOD NOTE..talked to a broker guy I have been in teh works with and he says he can REFINANCE me out (with ownership in my name) in a year.. I got his terms (640 score, same income etc).. That sounds like an ideal exit strategy (no need to deal with ownership issues!) Loan would be 2 pts higher than normal rates at that time (5-7%) and normal closing costs but actualy that rate is FINE because with the new heightened FHA premiums that is just about the same.
I finally reached my real estate mentor.. I talk to him in detail in 45 minutes
Concerned about cash to close.. (and I can not afford 12%w tax, insurance escrow.. another $8-900) this means i have to come up with cash (now) to escrow for taxes/insurance (another $9-10k) so I have that paid
Praying house appraises at $450k or more
65% loan to value of that is $292500
Settlement w bank is $297500
Points worse case 6=18k on $300k loan)
PLUS tax/insurance escrow $10k (this is an escrow for me and held by me)
On another (helps me feel better note)... for those following me.. the last settlement I tried to work out w that FHA niche loan (through a bank) was at $302k, $20k down in fees (does not count towards loan) and 6.75% but w FHA mortgage premium was almost $3200 a month. Even at 12% I am only $700 a month over that and the research this forced me to do may have gotten me an exit strategy (without ownership issues) in a year
I will wait for more info, continue researching and then have my accountant lay it all out (me too) and figure if it is worth it and can I do it
Onward but WISH COSTS and RATES WERE NOT SO HIGH!!!!
update on house situation #2. I have 2 weeks left to get the money
Essentially most everyone has been called (but searching for new lender contacts today). I have 4 people on the 'hook', I WILL hear preliminary news tomorrow on at least 2. I had planned to refinance out in a year (via purchasing it from my LLC) which made the higher rates not so bad. I just found out that I may not be able to. My plan was to take title in my LLC and then buy it from myself in a year (after last foreclosure sale/deed in lieu date.. my 2 flat.. I just withdrew my attorney from that case). There is some concern that is not an arms length transaction. The lender raised that concern and I botched the answer.. possibly losing his confidence. I am unclear if he is going to back out or not. My accountant says there is way around that. I need to get clear on what that is and STOP talking when I do not know the terms.
1. call attorney and FHA underwriter on arms length issue
2. call my foreclosure attorney ( that I just let go )and ask him what other outcomes there are to a foreclosure case outside of deed in lieu and sale
3. call attorney for bank (or rehire above attorney to do so)on 2 flat in foreclosure and offer to give back deed in exchange for some other marked resolution than deed in lieu.. like have htem dismiss the case etc.. This is because the waiting period for foreclosure starts after the deed in lieu or sale date but there is NO WAITING PERIOD if neither of those occurred and the case just faded away.. Maybe if these guys get the house they can just make the case go away
I need to get clear on things and keep pushing
Yesterday was a terrible crying out of control night when I got that arms length transaction news. My deal hinges on getting out of the hard money loan in less than 18 months.
I do not want to pay hard money for 3 years aqnd it does not make sense and no one wants to lend for that long.
If I can not buy it from myself (LLC). I have to wait to refinance. there is THREE year waiting period w FHA to refinance
Using this as a diary to laugh or cry at later.
Update on house short settlement (where I live now) trying to buy out existing mortgage at a discount and take ownership of property singally without my ex. Settlement $297,500.. Value $450,000. I can not get a bank loan due to pending foreclosure on a rental and there is a year waiting period from the END of that. I had my attorney withdraw and will no longer fight that.
Made 36 calls (had a friend help) !!! Crazy insane.. talked to several folks.,and have 4 applications in the works and expect news on at least 1 of them today. Waiting on several more calls back too.
Points and rates are likely to be higher than I want. These are true hard money folks. I have one (non hard money guy) but he does not seem as strong .. I will hear from him mid next week. Still hoping for 8% rate and 20k down but folks are wanting 5+ points but can wrap them in the loan .., but not if loan to value goes over 65%
We will see.. news soon..
I want to settle this so I can RELAX and start my financial plan and move on. These last 2 homes represent the last ties to the past 'downfall'
good month w 6 homes and 3 units... low costs.. all rents in and cut insurance (yearly costs) by over $2,000. Will make efforts to raise rents across 3 units this year.
also started 401k this month.. 8% from me.. 3% from work.. (vested from day one) and $125 auto savings into emergency fund..
Making progress just need to settle house.