Foreclosure
After more than 25 years of excellent credit, we are now faced with foreclosure on our home in Florida. When we moved to Maryland 3 years ago our Florida home was appraised at $225,000. Since we only owed $60,000 on the home, we decided to take a second mortgage to use for down payment on our home in Maryland and then rent our Florida home to some friends who were interested in eventually buying it. Then the market changed.
After a year, our home's value had depreciated to around $185,000. Still about $50,000 more than we owed on it. Rent in the area had also decreased, while insurance and taxes had increased. We were losing money each month for about six months when we mentioned to our renters that we could not afford to keep renting at the same rate and understood that rental rates had decreased so it was not fair to them to increase the rent any. We decided that we needed to sell the home before the value went lower.
Our friends found a newer home for less than what we were wanting to sell our home for, so they moved out. Since we are 1000 mils from that home, we paid a neighbor to paint and clean it to get it ready to sell. The house has been on the market for more than a year with very little interest. After nine months of making double mortgage payments around $1100 per month plus $50 per month to mow the yard and water and electricity charges (which we are still paying), we had to quit making payments to the banks.
We notified the banks a month prior to our last payment and we were told that they could do nothing for us because our payments were current. Basically they were saying, "Don't call us, we'll call you when you owe us money." We did attempt to do a short sale, but the primary lender refused the sale because it was for MORE than what we owed them. I couldn't figure that out until we got our foreclosure summons showing that the loan was insured by Freddie Mac. No wonder they had no interest in working with us, they will get all of their money from the government bailout, plus own a home they can sell at a profit.
I realize that buying and selling real estate does not guarantee you will make money, but it has generally been a safe investment. So why did the real estate market implode? Since Fannie Mae and Freddie Mac were handing out mortgages to individuals who could not afford them and had no means to repay them, the market became inflated. That is why our home was appraised at such a high value. Then when the banks realized that they had many bad loans and started foreclosing on thousands of homes, the market decreased drastically. That is why our home is now only worth $150,000 and why nobody wants to buy my home for that. We did get an offer for $80,000 (but the bank refused it).
Now, who is to blame? There are many people who created the problem, mostly the democrats like Barnie Frank, Chris Dodd and Barack Obama who each received thousands of dollars from Fannie Mae and Freddie Mac to look the other way while demanding that Congress loosing rules and regulations on these institutions so that the could provide more money to low income families. And then there is democrat Franklin Raines who made $90 million in six years from Fannie Mae. Who do I not blame? John McCain, who while opposed to government regulation in the free market, was a co-sponsor for a bill in 2005 to do just that with Fannie Mae and Freddie Mac because they were about to go bankrupt due to illegal and unethical accounting procedures that were falsely reporting their profits. McCain warned the Congress about this, yet Congress did nothing.
I do not want Congress to bail me out. I want them to get out of my business. The Consitiution never gave Congress the right to run businesses. The only thing that goverment does well is the one thing it should do: protect us from physical harm. Whenever they try to get involved in pork barrel projects such as medical industry, oil industry, banking industry, etc., they create problems. Most of Congress are lawyers who turned professional politicians. They know nothing about finance and business. Their decisions and actions prove that.
After a year, our home's value had depreciated to around $185,000. Still about $50,000 more than we owed on it. Rent in the area had also decreased, while insurance and taxes had increased. We were losing money each month for about six months when we mentioned to our renters that we could not afford to keep renting at the same rate and understood that rental rates had decreased so it was not fair to them to increase the rent any. We decided that we needed to sell the home before the value went lower.
Our friends found a newer home for less than what we were wanting to sell our home for, so they moved out. Since we are 1000 mils from that home, we paid a neighbor to paint and clean it to get it ready to sell. The house has been on the market for more than a year with very little interest. After nine months of making double mortgage payments around $1100 per month plus $50 per month to mow the yard and water and electricity charges (which we are still paying), we had to quit making payments to the banks.
We notified the banks a month prior to our last payment and we were told that they could do nothing for us because our payments were current. Basically they were saying, "Don't call us, we'll call you when you owe us money." We did attempt to do a short sale, but the primary lender refused the sale because it was for MORE than what we owed them. I couldn't figure that out until we got our foreclosure summons showing that the loan was insured by Freddie Mac. No wonder they had no interest in working with us, they will get all of their money from the government bailout, plus own a home they can sell at a profit.
I realize that buying and selling real estate does not guarantee you will make money, but it has generally been a safe investment. So why did the real estate market implode? Since Fannie Mae and Freddie Mac were handing out mortgages to individuals who could not afford them and had no means to repay them, the market became inflated. That is why our home was appraised at such a high value. Then when the banks realized that they had many bad loans and started foreclosing on thousands of homes, the market decreased drastically. That is why our home is now only worth $150,000 and why nobody wants to buy my home for that. We did get an offer for $80,000 (but the bank refused it).
Now, who is to blame? There are many people who created the problem, mostly the democrats like Barnie Frank, Chris Dodd and Barack Obama who each received thousands of dollars from Fannie Mae and Freddie Mac to look the other way while demanding that Congress loosing rules and regulations on these institutions so that the could provide more money to low income families. And then there is democrat Franklin Raines who made $90 million in six years from Fannie Mae. Who do I not blame? John McCain, who while opposed to government regulation in the free market, was a co-sponsor for a bill in 2005 to do just that with Fannie Mae and Freddie Mac because they were about to go bankrupt due to illegal and unethical accounting procedures that were falsely reporting their profits. McCain warned the Congress about this, yet Congress did nothing.
I do not want Congress to bail me out. I want them to get out of my business. The Consitiution never gave Congress the right to run businesses. The only thing that goverment does well is the one thing it should do: protect us from physical harm. Whenever they try to get involved in pork barrel projects such as medical industry, oil industry, banking industry, etc., they create problems. Most of Congress are lawyers who turned professional politicians. They know nothing about finance and business. Their decisions and actions prove that.
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