Friday, June 6, 2008

Rethinking the REO

Thanks to the many who commented and sent e-mails regarding our situation. Normally I would respond in the comments, but my thoughts were running a bit long....

We were prepared to deal with many of the issues going into the deal such as -
1) The "as-is" condition: Mr. BT has considerable experience in construction, as does the rest of his family, so we had a good idea what it would take to fix up the place the way we like it. In addition, we planned to stay in our rental an additional month, so we wouldn't have to live with invasive renovations.
2) Market/Financials: The monthly payment on the home would have been cheaper than our current rent, even when you include taxes and insurance, and some $$ for home maintenance and repairs. So the falling market wouldn't really affect us till we were ready to sell.

We had even worked through the addendum and created a list of modifications that we felt would make us comfortable going forward. (Next time, assuming there is one, we will know to ask for that upfront.)

The item that finally broke the camel's back, came last night after learning about how unscrupulous the bank has been working with customers. The WSJ lawsuit article tipped us off that they may not be a model citizen (in fact our mortgage broker thought they were already out of business), so we did a little research when Mr. BT came home last night. There was page after page of consumer complaints where Option One Mortgage mislead its customers on purpose. At that point, we felt it was no longer worth it to proceed (at least not without a lawyer). The deal had gotten too risky.

This situation has exhausted me emotionally. I spent way too much time daydreaming about it, researching needed renovations, working the financials etc. It will take me a while to recover, and I am now fully cured of my spring nesting urge (the unemployment numbers out today, also helped reinforce that we were making the right decision).


Jacob said...

Good call. Bad job numbers, more layoffs coming, Gas hit $137 a barrel. There is still a lot of pain to be felt in areas that are far away from where the jobs are.

Still too many "investors" buying homes. Still too many people think prices will bounce back to 2005 in a year or two.

Patient Renter said...

You should have just mentioned a while ago that it was Option One you were dealing with (I thought they were out of business too actually, but for good reason).

It sounds like you did the right thing though, and I'm sure you'll recover faster than you think as the wisdom of your decision grows on you.

NeuronNerd said...

I feel your pain. We've been trying to get a house as a short sale (didn't want to do a short, but if it's the house you really want, what else can ya do?), and it's looking like it won't work...

On an intellectual level, I know the market is likely to fall further, but on an emotional level, I am just really sick of renting.

I hate dealing with the chronic background stress of worrying about is the landlord going to keep paying the mortgage, or am I going to get evicted during my husband's next deployment on 30 days notice?

Oh well...