I survived the sickness enough that the urgent care doctor told me I could travel to my business meeting Tuesday. My flight was somewhat easy, but I was the slow lumbering person you hate to get behind at the airport. Eventually I made it to sunny, but chilly Las Vegas (65... brrrrr)
My taxi driver initiated conversation, asking where I was from and why I was in town. I said for a meeting and he kept asking questions so much so that I shared that I was in information security and through the course of the conversation that I had worked at a bank.
Serge (not his real name) perked right up and said "You worked for a bank? What do you know about short sales?"
"Not much, I've done some reading."
"I got this paper here that says that they are selling my house and I need to know what it means." Then he hands me this 5 page letter from Bank of America. As he's handing it through the glass I'm telling him, I'm not a lawyer. "no, but you seem smart, please read it and tell me what it means."
I quickly scanned through the document and it was pretty clear. He had a mortgage for $200k, the bank had accepted an offer for $130k and would be writing off the remaining $70k.
He asked me to explain the fine print which essentially said that Bank of America could NEVER sue him for the remainder amount of the loan, that he would be entitled to zero monies as part of the transaction, no funds would be handed to him even to hand over to the other party and that the deal would close on December 15.
We had a brief chat about Primary Mortgage Insurance and how the bank would be getting any money from any claims related to PMI on his loan. It was then that he said that he had saved for years and years and bought this house with 20% down so he didn't have PMI. He asked why if Bank of America would accept $130k for his house from Eduardo Somebody, why they wouldn't take $130 from him so he and his family could keep the house. That is the question of the decade Serge.
At the end of the short cab ride, Serge asked if he could sleep that night. I told him that yes, the deal seemed good, he didn't have to pay anything, he wasn't in any trouble and as long as they were ready to move by December 15th that yes, he could sleep at night. At the hotel he thanked me profusely and took my cab $25 fare and was off. Heck, he almost hugged me.
I felt pretty good about our interaction until the cab ride back to the airport and the charge was only $12.50.
I guess no good deed goes unpunished.
I did sit down at a 1 cent machine and put in $5. I walked away when my winnings totaled over $50. I felt that for a business trip that was a nice conversion rate. Other than that little moment in the casino I was in my room. I napped, took a bath, ordered room service and went to bed early. So much for Terri's Wild Vegas Evening. The meeting was good and really worth my time. It sucked getting home at midnight last night, but much better than another night away from home.
2 comments:
The answer to the question of the decade is that if banks were selling houses at pennies on the dollar to the very people responsible for paying the mortgages on those properties, people would have an incentive to stop paying their mortgages in order to get a shot at buying their houses for pennies on the dollar. Similarly, you can't murder someone and then collect the life insurance proceeds, even though the insurance company will pay out to another beneficiary could be losing money on the policy.
Not that Serge had a spare $130K lying around offer his lender anyway, we assume.
He can take comfort that the $70K in forgiven debt on his primary residence won't be treated as taxable income, an exception to the general rule.
The sad thing is that they wanted to stay in the house and had a house they could afford until the economy went tits up.
I can only imagine what $130k buys you in Las Vegas these days but I bet it isn't a shitty run down condo.
Getting to walk away without the $70k hanging over their heads is a good thing. I asked if he was ever going to buy again and he was adamant in his reply. NO! He said that the dream of a house in America is a scam and that they would rent for the rest of their lives.
It's too bad because it sounds like they tried to do everything right, they had 20% down payment and they picked a house they thought they could afford.
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