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Author: HavaTheFool Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308484  
Subject: The Life and Times of HavaTheFool Date: 10/6/2009 2:09 AM
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Note: Apparently, I really love to talk. A lot. I started writing this post, and it just kept going. And going. And going. Rather like the Energizer Bunny but much less entertaining, I'm sure. I finally split up my post into three parts - general overview of the last several years of my life; general overview of our financial picture; and our budget. I know that you guys will most likely have a whole lot to say, and I welcome all of your input and insights. :-) Okay, on with the story...

*********

Well, I just looked, and I've been here at Fool.com since September of 2003, so just over six years. In that six years, a lot has happened to me. I sold a house, moved, bought a house, paid $16,000 off in credit card debt, tried to help my husband battle depression, realized husband wasn't fighting that battle with me, divorced said husband, tried to sell a house, found a wonderful guy, moved in with wonderful guy...oh yeah, and left the only religion I've ever known (LDS) and became atheist. But we'll leave that last part alone, because it has absolutely nothing to do with money. ;-)

About two years ago, my (now ex) husband's job ended, and we moved across the state for his new job. We sold our old home and used the proceedings to pay off our credit card debt (roughly $16,000). As a part of paying off the credit card debt, I made a solemn vow to NEVER go into debt again. That $16,000 in cc debt was killing us (financially - making the minimum payments each month was really tough) and I refused to do it again. I am happy to say that two years, one divorce, and one root canal/crown later, I have lived up to that vow. I still have zero in credit card debt.

Back to our move...So we bought a nicely remodeled one-bedroom home in a nice part of town right at the top of the housing bubble, and were excited to get it for "only" $95,000. My real estate agent tried to talk me out of buying a one-bedroom home, but I loved it (it's an older home with lots of character but COMPLETELY remodeled from top to bottom) and I wanted to buy it. I figured it was just my husband and I - we didn't need anything bigger. And to have such a neat home in such a nice area for this price (when the other homes on the street are worth close to $250,000 or more, post-bubble) was pretty darn cool to me. I love old homes, so this seemed like the perfect house to me. As I've found out, though, the re-saleability on one bedroom homes is horrendous (now don't all act surprised at once...)

Then two things happened: The housing bubble popped, and my husband's depression got a whole lot worse. I was reading the "0% BOA transfer" thread today, and someone was talking about how when you're depressed and you take an anti-depressant, you get better, you think you don't need the AD anymore, you quit taking it, you get worse, and then you don't have the get up and go to get back to the doctor to get back on the AD's again. That, in a nutshell, was my ex-husband. He would take an AD, then stop. Then start up again when I nagged him. Then stop. Then start up again when I nagged him. Then stop. Seeing a pattern yet?

His depression was so bad that he was regularly missing at least one to two days of work every pay period (which was every two weeks). I went back through his paystubs from his old job, then looked at his paystubs at his new job, and out of perhaps three years of paystubs, there was only one or two paychecks where he wasn't missing at least one day of work. Seriously. His depression was horrible. He dealt with stress by throwing up. I cannot count how many mornings I woke up to him retching in the bathroom. When he got depressed, he got stressed, and then he threw up. Then he was "sick" and spent the day at home watching soap operas (Days of Our Lives was his favorite) and playing World of Warcraft online. This went on for years.

I tried everything I could think of to help him. In the end, I realized that he didn't want to change. I don't know if it's because he was so depressed that he couldn't see that there was hope and could work towards it, or if wallowing around in despair was just so much darn fun he didn't ever want to stop, but either way, the end result was the same. After he missed several months of work (yes, months) and then settled into doing substitute teaching at the local school district on a very, very part-time basis, I realized that whatever the problem was, I couldn't fix it. I had tried for seven years, and it couldn't be done. Nancy (I believe) said it in the other thread, "How many psychiatrists does it take to change a light bulb? Only one, but the bulb has to want to change." I laughed, and then I cried a little. That couldn't be more accurate.

At the end of April of this year, I told my husband that we needed to get a divorce, and then I called the real estate agent we bought the house from and told him I was getting a divorce, and could he help me sell the house?

My husband moved out that night while I was at work, and I haven't seen him since. Over the next couple of weeks, my husband was busy promising me the sun, the moon, and the stars if I'd just take him back, and I was busy getting the house ready to sell. The husband finally realized that I wasn't going to change my mind, and thankfully did not fight me on the divorce proceedings. Surprisingly, it is really cheap to get divorced (and quick!) if you have no children and no money. The divorce was finalized by the end of May, and only cost $132 (that was the filing fee at the courthouse. I did all of the paperwork myself). I am more grateful than I can say that we did not have any kids. We tried for five years, and I never got pregnant. There were days that I cried buckets of tears because I couldn't get pregnant. It's ironic to think back on it now.

In the meanwhile, I fell in love with my real estate agent (who saw that coming, raise of hands? Patzer, you don't count - you already knew!) When I was buying the one-bedroom house here two years ago, I spent a lot of time with Hunter (my real estate agent) while looking at houses. I had always thought he was a really cute guy and that "if I were single" there was a guy I would love to date. Apparently, he had felt the same way about me. Neither of us acted on that impulse, and I never had a clue that he liked me in the slightest. I was really surprised and flattered when he asked me out on a date. I obviously said yes, we dated for several months, fell in love, and I moved in with him. Now, my old house sits empty, waiting for the right buyer to come along and buy it.

Speaking of, I mentioned (way back at the beginning of this saga) that I bought the house at the top of the housing bubble. Hunter told me that my commission check was one of the last ones that he received before everything went to hell in a handbasket. I've just got good timing like that, what can I say? ;-) Now that I'm trying to sell my overpriced, one-bedroom home, I'm in big trouble because I owe roughly $15,000 to $20,000 more on the house than what it is worth. Its only saving grace is that it has commercial overlay, and so I can sell it as commercial property which is worth much more than residential. Unfortunately, I've only had one offer so far on it, and the offer was for $85,000. I have it listed at $105,000.

If you're keeping track, you will have noticed that I bought the house at $95,000 but am trying to sell it at $105,000. That's because we rolled everything into the loan when we bought it - all closing costs - and we paid ZERO down. Of course. Then there's the fact that there are closing costs associated with selling it now (ugh), making our break even point $103,200. Anything less than that and I have to bring money to the table in order to close. Unfortunately, my house is worth more like $85,000 - $90,000. Not shockingly, I don't have $15,000 to $20,000 to pay the bank so I can sell my house.

Oh, I forgot: The terms of my divorce agreement was that we would sell the house ASAP and split the proceeds (or costs) in half. In the meanwhile, the ex is sending me $325 a month, and I am left paying the rest ($415 + water bill + electric bill + heating bill). The ex knows I am dating Hunter, but has no idea I am living with him, and I plan on keeping it that way. He's already being difficult enough to work with - I don't want to pour gasoline on the flames.

When it comes to selling the house, however, there isn't a chance on this green earth that my ex is going to pay half of $15,000 to $20,000 in order to sell the house. A) He doesn't have the money, and B) Even if he did, he wouldn't give it to me. I would have to take him back to court and fight him for it, and I simply do not want to. I want to move on with my life, and trying to get blood out of a stone isn't anywhere in my foreseeable future. So if I somehow find a private lender who will lend me $15,000 so I can sell the house, I would be on my own in paying that loan back.

In the meanwhile, I am going to school at the local community college to get my AA in Elementary Education. In two years, I will transfer to another local college and get my Bachelors in Elem Ed. So at a minimum, I am facing four more years of college before I graduate. The good news is, I have more in scholarships than it costs for tuition and books, so I get a check back each semester after tuition and books are paid for. On top of that, I qualify for a Federal Pell grant, so my total check from the college each semester is roughly $3000. I also qualify for a federal workstudy program, so I make an additional $225 per month doing workstudy at the college (basically, I work as a secretary for $7.50 an hour).

I have seriously considered quitting school so I can get a full-time job, but then I look at the fact that I am getting paid to go to school ($3000 a semester is a pretty good paycheck) and I just can't turn that down so I can get a dead-end job a little above minimum wage and tread water for another two years. I need to get a college degree so I can stop working slightly-above-minimum-wage jobs. I'll never get anywhere if I don't stick to my guns now.

On top of the workstudy, Pell grant, and two scholarships, I also qualified for a subsidized student loan for $900 per semester. I just filled out the paperwork for that last week and should receive that check some time this week. That will pay for two months of mortgage payments and is a loan I don't have to pay back for approximately four more years. I hate to do it (other than my mortgage, I have ZERO debt, and I had hoped to keep it that way forever!) but at this point, I'm pretty desperate.

Last but not least, I work part-time at the local library - I've been there two years. So between my two part-time jobs and my schooling (I'm in the honors program, so my classes are pretty rigorous), my days are packed from beginning to end. I really shouldn't be here, typing up this saga that only the most insanely bored person would ever get to the end of, but I am anyway.

The real tough spot is actually Hunter's debt. He is a real estate agent, and 18 months ago, when the market crashed, his income did too. He started living off his credit cards and his HELOC on his home, and has subsequently run up quite a bit of debt. Because his income flatlined there for about six months (he had ZERO closings for six months) he stopped paying bills because he had no money to pay them with. He isn't the world's best about paperwork anyway - he has his strong suits, but paperwork isn't it - and so it became much easier to simply ignore the bills that came. When I first offered to try to sort out his bills, he hesitantly said okay, and then told me to go get them out of the mailbox. Apparently, he hadn't gotten his mail for about 2 months. His mailbox (which was only at the end of the driveway) was so full, I could hardly get everything out of it.

I found all sorts of things in there - bills, yes, but also checks from people paying him. It was a disaster area. I have since completely taken over bill paying, and now all of his bills are paid on time, every time. His credit score has skyrocketed (I used the website http://creditkarma.com to check his score yesterday, and he's at 668, which is a heck of a lot better than I had thought it would be) but unfortunately, his credit card companies won't budget on the interest rates they are charging him. Don't pay the credit card company once...or twice...in a row, and they jack your rates up to 28.99%. Shocking but true.

Second post coming right up...
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Author: HavaTheFool Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292075 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 2:12 AM
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Currently, our financial situation is:

My mortgage:
$92,700 30-year mortgage @ 6.625% (fixed).
$740/mo house payment, including taxes and insurance.

Hunter's mortgage:
$118,750 ARM mortgage, currently set at 5.75% and going to reset in roughly one year. Interest-only loan, so the monthly payment of $732 doesn't pay even a penny towards principal. It does include taxes and insurance, however.

Hunter's HELOC:
$85,160 @ 3.5% interest, which means $247.60 is added on each month in interest. Not surprisingly, his minimum monthly payment each month is (drumroll) $247.60.

Hunter's US Bank CC:
$8,345 @ 28.99%. Interest added each month: ~$200. Minimum payment? ~$200

Hunter's First Horizon CC:
$3,915 @ 8.15%. Interest added each month: ~$27. Minimum payment? ~$100

So out of a mortgage, a HELOC, and two credit cards, the only one he's making ANY sort of progress on is the First Horizon credit card. He also has property in the country - roughly two acres - and he pays $132/mo for that mortgage. He had been renting it out to a lady to put her horses on it, but she stopped paying and moved out. He put it up for sale about a month ago, and if he can get what he thinks is a fairly reasonable price out of it, we'll clear about $30,000 from it, after the mortgage and back taxes (yes, he hasn't paid taxes in two years on the property) is paid off. He just dropped the price on it again today. Two acre plots of land out in the country is highly desired in our area, so I think he'll be able to sell it fairly easily. We shall see.

There is some pretty rough stuff in Hunter's financial world, like he hasn't filed his taxes for 2008 yet (he keeps getting extensions) and he thinks he's going to owe when he does file. He has a daughter and has to pay child support and child care, although we're so broke right now, all he's paying at the moment is child support. The mom isn't pressing for the child care right now, although I think she will in the future when we start doing better financially. All of these are problems that we're going to have to tackle soon, and it won't be fun.

If there's one thing for sure, it's that I've learned that being a real estate agent is not an easy gig. He is constantly being nickeled and dimed to death. He has the following bills that I know about (and again, his paperwork is pretty sketchy, so there's an almost 100% chance that I will continue to find more bills as we go on):

Supra Key: $175/yr
Real Estate Commission: $160/2 yrs
IMLS: $264/yr
Rice E&O Insurance: $186/yr
GTF Assoc. of Realtors: $595/yr
Office charge: ~$120/mo

Which means that per month, he pays about $280 in fees in order to be a real estate agent. And I know there's more bills out there. He has to pay that $280 a month whether or not he makes a single penny. In July, he made ~$5,000 from commissions. In August, he made $0. It's a veritable feast or famine, which makes it hard to budget, obviously.

I bring in roughly $1,000 per month (a little under some months, just depending) after taxes, from my jobs. This isn't enough to even pretend to sustain us, but it's better than nothing.

If my home doesn't sell by November 15th (or at least have it under contract), we are going to do a loan modification on my mortgage and drop the interest rate. According to the bank (I already called and talked to them, and even have the paperwork to get it done) after the loan mod, my monthly payment would probably end up somewhere in the $500 - $600 range, including taxes and insurance. That would allow me to rent my home out for $550 and almost completely cover the cost of my mortgage payment. At that point, I can be free of my ex-husband - I can stop asking him to help pay the $325 per month, and he will sign a power of attorney form to sign the home over to me. We can put the home back on the market in the spring and see what happens then. However, I don't want to put a renter into the home now, and then kick them out in a month when we get an offer on the house, so we're holding off doing anything with that until Nov 15th.

As for Hunter's mortgage, we are going to do a loan mod on his also, and get it changed from an ARM to a fixed, and from interest-only to regular. He has three closings coming up, and when those are done, then we'll have income to point to and say, "Look, we do make money, so you want to help us." Otherwise, I don't think Hunter would qualify.

My credit is excellent - I am only 28 years old, but I have a 772 rating. I've never paid any creditor late anywhere for any amount. I am as anal as they come moneywise. Unfortunately, my income SUCKS, so I don't qualify for large loan amounts. Hunter's income is higher (most months) but his credit is worse. We're quite the pair. ;-) I have applied for two different credit cards, both with 0% interest rates, and will see which ones get approved. I'd love to transfer the US Bank so that it has a manageable interest rate on it. Paying 28.99% is insanity.

Next post: Rough budget

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Author: HavaTheFool Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292076 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 2:23 AM
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Here is our budget - I use YNAB, so I'm pulling these budget amounts straight from there.

Bills:

Hunter's Mortgage: $732
My Mortgage: $740
Mortgage on Property: $132
HELOC: $250
First Horizon cc: $100
US Bank cc: $300 <-- Since this is his highest interest rate, we've been rounding up to $300 per month. The actual amount due is $200.
Office charge: $200 <-- Actual bill: $120. However, he owes ~$1150 to the office in back payments, so the extra $80 a month goes towards that balance. They do not charge him interest.
Real Estate fees (other than office charge): $160
Child Support: $138
Life Insurance: $29
Roth IRA: $50
Accountant: $50 (has a bill at the CPA's for $300 - no interest - making $50/mo payments on the bill)
Birth control: $30
Car Insurance: $40
Cell phone - mine: $65 <-- In two year contract - can't change
Cell phone - his: $50 <-- Month to month contract, but his contract is unlimited minutes and texts, which is 100% necessary for a real estate agent who is on the phone all day long.
City bill - mine: $51
City bill - his: $51
Electricity - mine: $22
Electricity - his: $70
Internet - $47 <-- Slowest high speed internet connection available, and the cheapest (not many choices of providers in my area)
Gas: Just got cold within the last couple of days, so I have NO idea what the gas bill is going to look like. $150 during the winter? Looking into level pay. He didn't keep any gas bills from last year, so I don't know what to expect.

Discretionary:

Groceries: $130
Restaurants: $30
Fun money Hers: $20
Fun money His: $20
Repairs and Maintenance (household): $25
Toiletries: $65
Gas for car: $75

Total per month: $3597 without including a gas bill.

The monthly real estate fees for $160 is all of the bills received throughout the year, divided by 12. YNAB allows me to rollover from month to month, accumulating until I need the money. There isn't one particular place that I pay $160 to each month.

You'll notice that I didn't budget for clothing - at the moment, new clothes is completely out of the picture. When things get better, we'll go shopping then. I also didn't budget anything for entertainment - being in the honors program at the college means that I get free tickets to a lot of (normally expensive) concerts. We live a very low key life, and Hunter doesn't fight that at all. In fact, Hunter is cheaper than I am when it comes to groceries and eating out. If you look at the discretionary portion of our budget, there isn't much there. I am primarily entertained by reading; Hunter is primarily entertained by TV. Since I work at the library, I check out books and movies for free all the time. Neither of us has bought a single CD, movie, or book since we started dating back in May. We completely cut that out of the budget.

We have had two garage sales, and if the weather hadn't gotten crappy, we would have had another one. As it is, we'll probably have to wait until spring.

Income:

~$3900 per semester from my schooling (two checks received - one in September and the second in January). $3000/sem. is free money that I don't have to pay back; $900/sem. is a subsidized student loan.
~$775 from my library job
~$225 from my workstudy job
$325 a month from ex-husband to help pay mortgage payment

Hunter's is much harder to figure out. This month, he has one closing with a set date, and two closings that are still be figured out. Rough estimate of $1500 each. Then he may not get another closing for two months. ??? He is working hard to bring in clients with distressed property, since that's the only property selling right now, and that is starting to pay off for him. I am helping him as much as possible, and he's getting some good leads from it. I am not sure what this winter will bring though. :-?

I think I have finally (finally!) ran out of things to say. Other than this: I am a thousand times happier with Hunter than I was with my ex. Even leaving all of the depression aside, my ex was difficult to live with on a financial level because he'd say things like, "Yeah, we need to cut back on our spending. We spend too much, and we need to pay down debt."

*skip a few beats*

"Well, I'm hungry. Want to go out to eat?"

He was always saying things like, "We deserve this. We work so hard. It's not that much. We never pamper ourselves." On and on and on. He would nod and say yes, he wanted to spend less, and then turn around and want to spend $20 on junk food (mostly candy) at the store.

But with Hunter, I have finally found someone whose actions match his words. We just made a trip to a state two states over for his brother's wedding, and instead of saying, "Well, it's a 15 hour drive - we'll need to get a hotel room somewhere," Hunter said, "I can drive straight through and then we can sleep when we get to my brother's house. That's free. So let's go." And that's exactly what we did - drove straight through both ways. And the only thing we bought (other than fuel) was coffee. Hunter knows how to be cheap, and better yet, he actually follows through on what he says. His finances may be a mess, but unlike many significant others that I read about on here (and have dealt with in real life) Hunter is more than willing to get things back into shape.

Okay, bring it on.

Hava

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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292077 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 8:25 AM
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If my home doesn't sell by November 15th (or at least have it under contract), we are going to do a loan modification on my mortgage and drop the interest rate.

Is your bank aware that you are not living in the home? Loan modifications are generally available only if the home is your principal residence. Since you have moved out, it isn't.

Also, from your other posts, it sounds like your income is about $18,000 a year from the two jobs and the scholarship (student loans don't count as income). An $18k income means that your PITI payment would have to be $465 or less a month (31% of $1.5/month). In order to get this minimum payment, you will probably end up with a 40 year mortgage. Is that what you want?

As for Hunter's mortgage, we are going to do a loan mod on his also, and get it changed from an ARM to a fixed, and from interest-only to regular. He has three closings coming up, and when those are done, then we'll have income to point to and say, "Look, we do make money, so you want to help us." Otherwise, I don't think Hunter would qualify.

Well, generally for loan modifications for self-employed people, the bank will want to see the last two years tax returns, in addition to verifying current income. So, first of all, he needs to get his 2008 taxes done. Then, they will try to modify the first mortgage so that the PITI is 31% of his income. However, there are a few issues that he will need to overcome to modify his loan.

1) The HELOC will have to subordinate to any modified loan. Since the HELOC is over 40% of the total debt on the home, it is likely that if the HELOC holder foreclosed upon his house, they would still be able to get some money back. Therefore, they don't have as much incentive to subordinate to a modified first.

2) Even if he does qualify to get his first modified, and the HELOC will subordinate, he still has the HELOC payment to deal with. Now, I know that the government has been working on modification guidelines for HELOCs too, but I think that they are having a hard time with that because they really can't impose anything unless the HELOC investor is Fannie or Freddie, and most HELOCs are not Fannie/Freddie loans. So, modifying with a HELOC in place is really messy.

3) His new payment on the first would likely be 31% of his income, as long as his income is between about $21.5k and $33k a year. Any more than about $33k a year - he probably will be considered to make too much. Any less than $21.5k, he probably will be considered to make too little.

4) Additionally, for both of you - for loan modifications, they look at *household* incomes, and you are living together. If you add both of your incomes together, it is likely that neither of you will qualify for a modification on either home.

I really think that you both need to re-think your living arrangements for a while until you get your house situation(s) resolved. You need to actually move back into your house, so you can tell the bank without lying that it actually is your principal residence, so they can modify your loan on the up and up.

I really think that he should probably be looking to sell his home, even if he has to do a short sale. The modification process, if even possible, is going to be a real pain. It doesn't sound like his current income would really support the debt on his house. IF (and that's a big IF) he were able to modify all the debt into a loan of $204k at 2.5% (minimum modification rate) for 40 years (maximum modification time frame), his PITI would be about $835 a month. To have that be an 'affordable' payment of 31% of his income, he would have to make about $33k a year. At $1500/closing, that's 22 closings a year, plus another closing or two to pay for his real estate expenses. Sounds to me like he's lucky to average 1 closing a month.

I have applied for two different credit cards, both with 0% interest rates, and will see which ones get approved. I'd love to transfer the US Bank so that it has a manageable interest rate on it. Paying 28.99% is insanity.

DO NOT transfer his debt onto your credit card!!!!!!!!!!!!!!!!

That is even more insane than paying 29% interest.

You are not married. You don't have any legal ties to him. While good intentions are just that, good intentions, lots of stuff may happen. You saw that in your marriage. While Hunter may be way better than your ex about a lot of stuff, he's still human. And things like getting hit by a bus happen all the time.

He needs to resolve his own financial problems. You don't. You are foolish if you do.

AJ

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Author: GuildWarsQueen Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292078 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 9:22 AM
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What about Hunter getting a part time job to supplement his real estate income?

It might not be a lot, but it would help give you some more breathing room.

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Author: Patzer Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292079 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 9:25 AM
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I have no substantive advice on the big issues, but I have thoughts on one of the little ones:

Gas: Just got cold within the last couple of days, so I have NO idea what the gas bill is going to look like. $150 during the winter? Looking into level pay. He didn't keep any gas bills from last year, so I don't know what to expect.

My gas and electric come on the same bill, and every month there's a graph that shows my usage per day for the 13 bill cycles to date. If your provider does something similar, there's a record of usage through a complete weather cycle.

A record of amount billed will be a little less useful, because prices change. I buy natural gas on a contract that is fixed for a year, and need to adust the budget for rate changes at the contract year end. I'm guessing that someone with Hunter's paperwork habits is looking at both usage and price fluctuating from month to month.

In addition to looking into level pay, you might want to look into fixed rate versus variable rate. Sometimes you end up paying more with fixed because the market went down; but you benefit from the fixed rate when prices rise. My take is, the amount you can overpay compared to the market is limited by the level of fixed rate you get, but there is no limit to how high prices can rise above the fixed rate. The one year I took the variable rate because it looked cheaper, I found that natural gas prices peak in the winter just when I use the most.

Patzer

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Author: FiddleDeeDee Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292080 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 9:42 AM
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DO NOT transfer his debt onto your credit card!!!!!!!!!!!!!!!!

That is even more insane than paying 29% interest.

You are not married. You don't have any legal ties to him. While good intentions are just that, good intentions, lots of stuff may happen. You saw that in your marriage. While Hunter may be way better than your ex about a lot of stuff, he's still human. And things like getting hit by a bus happen all the time.

He needs to resolve his own financial problems. You don't. You are foolish if you do.


Repeating for emphasis!!!!!!!!

Andrea

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Author: Ringfinger Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292083 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 11:01 AM
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Thrice repeated!!

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292084 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 11:10 AM
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You seem to have a taste for wounded birds. I would suggest that anyone who has not opened their mail for 2 months has issues with depression (I've had family members in this situation). I would suggest that Hunter's problems are not yours (yet) and your first obligation is to get that house sold. It will almost certainly need to be a short sale, so you need to address that reality and not keep it on the market for a price you will not get.

Yes, that will land you with debt, but a zero down house purchase can do that. That is a risk of zero down.

Your plan of doing a modification and somehow having your husband sign over the house to you seems pie in the sky to me. Modifications are taking a long time and many are not approved. It does not sound like you or Hunter are prepared to tackle being a Landlord, and I do not think signing a power of attorney would relieve your ex-husband of any obligations on the mortgage. You need to sell the house, and addressing that as reality is the best thing you can do.

And you don't need more credit cards.

Now - Hunter. His first obligation is the 2008 taxes. He needs to at least file, and do so in the next week (by 10.15). Maybe he can work out a payment plan, but if he doesn't file at all, things are going to get a lot worse. I assume he at least filed an extension on 4.15, and has until 10.15 to get them in. If it were me, I would keep paying all the professional fees that enable him to keep his license and protect him (E&O for sure!) and spin off all the "nice to have" things like professional associations. Since he is on commission, he needs to put any money he gets first to tax obligations, second to house/food/child support, and last only to CC's. And he MUST divert some of that money every sale to an emergency fund so he doesn't end up here again. Any variable business needs to have retained earnings to protect it against down times. I am self-employed and had a year and a half expenses saved to float me over bad times, and now I'm a bit worried that may not have been enough.

But really - he needs to tackle this himself. You cannot "fix" this for him. Anything you do, and he doesn't make happen himself, will just be a band-aid.

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Author: HavaTheFool Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292085 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 11:11 AM
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If my home doesn't sell by November 15th (or at least have it under contract), we are going to do a loan modification on my mortgage and drop the interest rate.

*******

Is your bank aware that you are not living in the home? Loan modifications are generally available only if the home is your principal residence. Since you have moved out, it isn't.

Also, from your other posts, it sounds like your income is about $18,000 a year from the two jobs and the scholarship (student loans don't count as income). An $18k income means that your PITI payment would have to be $465 or less a month (31% of $1.5/month). In order to get this minimum payment, you will probably end up with a 40 year mortgage. Is that what you want?


No, definitely not. What I really, really want is for someone to come along and buy my house at full price. ;-) lol. The problem with my house is, I don't have a whole lot of choices. If the house doesn't sell, then doing the loan mod and renting it out to someone is simply a stop-gap measure we will do until the market comes back and I can sell it at full price. Or we pay down enough of the principal that we can sell it at a lower price. Or we sell the property in the country and use the money to pay the difference on the loan.

Doing a loan mod is a temporary measure to stop the bleeding.

When I talked to the bank about the loan mod, they said that the lowest the interest rate could go is 2%. When I plugged that in to a calculator and added in what I pay in taxes and insurance now, I came out to about $550 with a 30 year loan. Now granted, that was a month or two ago, and perhaps I did something wrong, but that's what I came up with. Tell me what you think.

As for needing to live in the house in order to do the loan mod, yes, I definitely do know that (some days, it is helpful to be dating a real estate agent, because otherwise, I would be completely lost). My house is only a few streets over - I can walk there in 10 minutes, easy. So living there is only a question of packing a bag and moving back in for a week. I pay all of the utilities and have kept everything there - couches, bedroom set, fridge, freezer, etc - and even my parents don't know I don't live there. I hope that helps.

We have looked at doing a short sale on my home, but we would both love to keep my credit clean, and although doing a short sale is better than foreclosure, it still isn't pretty.

The hope is, we'll sell the country property, clear $30,000, take $15,000 to $20,000 and use it pay the bank to close on my home, and then use the rest to pay off his credit card debt. In a perfect world, that's how it would go. I think I said before (my apologies - that was a lot of writing yesterday!) that we just dropped the price on the country property in the last couple of days, so I have fairly high hopes that we will get a nibble or two on it.

I have to go to school so I will make the last part of this really quick. I debated transferring Hunter's debt to my name, but we had a discussion and he promised me that if we were to break up, he would pay the debt. I fully and absolutely trust him on that. He is actually fairly good friends with several of his ex-girlfriends - he's not one of those guys who breaks up with a girl and then becomes a complete ass to that girl. I know because I see him deal with them all the time (he works with one of his ex's). I also look at the fact that Hunter is willing to take the money from the sale of his country property and use it to pay down a mortgage that he has absolutely nothing to do with - he could easily say, "Well, go after your ex-husband for it. I'm not on that mortgage." But he isn't. He's committing his money to me, and I'm committing my money to him. At some point, you just have to take that leap.

Hunter is as solid as they come. Paperwork aside, he's a hell of a guy. I wouldn't be with him if he weren't. I'm in this for the long haul, and that includes debt. Both of us are loaded with it at the moment - you can say with assurity that neither of us are in this relationship for the money. ;-) LOL!

I am really, really late now - gotta run - will respond later to the other posts, all of which I really appreciate!

Hava

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Author: Frydaze1 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292086 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 11:21 AM
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No, definitely not. What I really, really want is for someone to come along and buy my house at full price. ;-) lol. The problem with my house is, I don't have a whole lot of choices. If the house doesn't sell, then doing the loan mod and renting it out to someone is simply a stop-gap measure we will do until the market comes back and I can sell it at full price. Or we pay down enough of the principal that we can sell it at a lower price. Or we sell the property in the country and use the money to pay the difference on the loan.

I'm dealing with a similar situation, since DF needs to sell his house in Michigan before he can move here to California with me, and the MI market is pretty terrible right now. He didn't want to sell his house and still owe money, but something I pointed out to him, that I think you might want to consider:

If it takes two years for the market to pick back up, you will have paid that $20K out in mortgage and property tax (not to mention any maintenance) anyway.

So if you're probably going to pay $20K no matter what, you might as well figure out NOW how to do it, and move on with your life. Especially since you have no idea what the housing market will do.


Frydaze1

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292087 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 11:26 AM
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I debated transferring Hunter's debt to my name, but we had a discussion and he promised me that if we were to break up, he would pay the debt. I fully and absolutely trust him on that.
This is incredibly foolish.

I have no doubt that right now he means this 100%. But he could end up not being able to pay his own bills again in the future. And do you think if that's the case he would pay your CC's before he pays for food, or his own bills? Or he could just change his mind. Once you sign that CC and transfer the debt it is YOUR debt. Not his. Not a collective "yours". YOURS - singular. If it isn't paid you will get the collectors calls, the headaches and the burden of them. Why on earth you would even expose yourself to this possibility I have no idea.

It changes your love for Hunter not one whit to say you won't do this. Credit cards are not a matter of love or trust. they are simply a business arrangement. And this is a very poor one for you. Very, very poor idea.

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292088 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 12:01 PM
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Oh, my. What a mess.


Unfortunately, you have made a series of decisions which have tended to produce disaster. That pattern continues with Hunter, and quite possibly with your schooling plans as well.

Americans tend to like to imagine that they can always reinvent themselves and their lives. Unfortunately, often that's not true. I suspect you are trying to leverage your life with Hunter and school just as you've leveraged your life with houses and debt. Unfortunately, that's not likely to work any better.



Seattle Pioneer

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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292089 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 12:06 PM
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No, definitely not. What I really, really want is for someone to come along and buy my house at full price. ;-) lol. The problem with my house is, I don't have a whole lot of choices.

Oh, you have choices. You just don't want to take them. You can quit going to school and get a job that makes your house affordable. You can sell the house and bring money to the table. You can do a short sale. You can do a deed in lieu of foreclosure. You can let the house be foreclosed on.

Look, you bought with nothing down. The money that you got from your previous house sale, you used to pay off your consumer debt, rather than using it as a down payment or investing it. Those choices have come home to roost.

When I talked to the bank about the loan mod, they said that the lowest the interest rate could go is 2%. When I plugged that in to a calculator and added in what I pay in taxes and insurance now, I came out to about $550 with a 30 year loan. Now granted, that was a month or two ago, and perhaps I did something wrong, but that's what I came up with. Tell me what you think.

The problem is that your income is only $18,000 a year. Your PITI mortgage payment can only be 31% of that, which is $465. That would mean that you would probably get a 2.5% (or so) loan for 40 years.

And you still have the problem that the home has to be your PRIMARY residence. You have moved out, so it isn't. You need to move back into your house before you will be considered for a loan mod. Hunter shouldn't move into your house with you, because it's household income that's supposed to be considered.

Look - I have nothing against 2 adults living together without being married, even if they are legally allowed to be married - that is my current living situation. But in your case, the prior financial decisions you have each made are going to have some impacts. If you each want to get your loans modified, you each have to be living in your own house as your principal residence. When asked for household income, you each need to include the other's income if you are living together.

I have to go to school so I will make the last part of this really quick. I debated transferring Hunter's debt to my name, but we had a discussion and he promised me that if we were to break up, he would pay the debt. I fully and absolutely trust him on that. He is actually fairly good friends with several of his ex-girlfriends - he's not one of those guys who breaks up with a girl and then becomes a complete ass to that girl. I know because I see him deal with them all the time (he works with one of his ex's). I also look at the fact that Hunter is willing to take the money from the sale of his country property and use it to pay down a mortgage that he has absolutely nothing to do with - he could easily say, "Well, go after your ex-husband for it. I'm not on that mortgage." But he isn't. He's committing his money to me, and I'm committing my money to him. At some point, you just have to take that leap.

So he's going to take the money he gets from selling the land (if it sells) and use it to help you pay down the debt on your house, BEFORE paying off his 28.99% debt?

Over and out. If this is what is being contemplated, I don't think I have the patience to even try to help.

AJ

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Author: ThyPeace Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292090 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 12:11 PM
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I'm going to echo those who say that it is a very poor idea to create financial ties to Hunter without a contract. One of those legally binding ones.

I also know that the "rebound" relationship phenomenon often doesn't work out so well. You may be the exception, of course, but given how frequently they don't work out, I think it might be a really good idea to run a scenario where you assume your relationship with Hunter ends (all relationships do end, you know, one way or another) and then figure out how you want that to look. That would be an excellent basis for any contract that you put in place. Promises about how things would end? Errr, well. Lots of people are honorable, it's true. But contracts are there to make sure that everyone remembers the details the same way.

ThyPeace, been there, done that, got the t-shirt and the barfing.

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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292091 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 12:33 PM
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One last thing:

As for needing to live in the house in order to do the loan mod, yes, I definitely do know that (some days, it is helpful to be dating a real estate agent, because otherwise, I would be completely lost). My house is only a few streets over - I can walk there in 10 minutes, easy. So living there is only a question of packing a bag and moving back in for a week. I pay all of the utilities and have kept everything there - couches, bedroom set, fridge, freezer, etc - and even my parents don't know I don't live there. I hope that helps.

I'm sure that moving back in for a week will help you justify it to yourself. But IT'S NOT YOUR PRINCIPAL RESIDENCE. The Making Home Affordable program is for people who live in their home, not those who want to rent out their home in order to try to break even on their bad purchase and financing decision.

You trying to get your loan modified is going to take resources that the mortgage company could be spending to help someone who is actually living in their home. And believe me, the mortgage companies have a lot more people who are asking for help than they have the resources to help.

Yes, I'm sure you can justify it to yourself. After all, it seems like everyone is trying to line up in the bailout line nowadays, and getting mad if they can't find a line that they can get a bailout. But is it really the right thing to do?

AJ

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Author: Patzer Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292092 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 1:22 PM
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Hunter is as solid as they come. Paperwork aside, he's a hell of a guy.

After reading some of the comments, I'm getting a bit queasy. Let me stipulate that Hunter is, aside from the aversion to paperwork you've discussed, a great guy who's worth the relationship.

What does that aversion to paperwork mean? It means, among other things, he's probably not finding all the deductions he should find for income taxes. That's money out the door. It means he probably doesn't have an accurate picture of the prospects in real estate. That's not always a bad thing, as realtors are basically salesmen, and salesmen need to be optimists.

But the very optimism that makes it possible to succeed in sales also makes it possible to hang onto a losing proposition long after it should have been ditched. Run over the the YNAB forums and read Silverlining's journal. At what point should Silverlining admit that she can't make a living in real estate and go find a different line of work?

Similarly, Hunter has run up a lot of debt because the real estate market was bad. The debt is no doubt larger than it otherwise would have been because he went into denial and didn't even deal with his mail; but the market hasn't been good enough for Hunter to really earn a living for some time. Remember that when Hunter *was* making money in real estate, the most successful period was a bubble market. The market will come back; but it may not come back soon, and it may *never* be as good for realtors as it was in the bubble.

While you're looking at longer term plans and hopes and dreams, one of the things that needs to be on the table is, what does Hunter do for a living if he becomes one of the people squeezed out of real estate because the healthy market that will eventually develop won't be as big as the bubble market was? And at what point would it make sense to say that Hunter's prospects somewhere else are better than in real estate?

Patzer

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Author: YewGuise Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292094 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 1:35 PM
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...He has a daughter and has to pay child support and child care, although we're so broke right now, all he's paying at the moment is child support. The mom isn't pressing for the child care right now, although I think she will in the future when we start doing better financially...

So, he already has a family. He's going to take money from the sale of his country house, and use it to help his girlfriend, before:
- paying taxes
- paying down cc debt
- paying child care?

Charming.

Seriously, if your efforts at having a baby had been successful, how would you feel about your (now ex-)husband doing what Hunter's now doing?

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Author: impolite Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292095 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 2:00 PM
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First, you make it sound as if Hunter's financial situation has occured from mishaps, innocent mistakes and random market changes. This is not true - they have occured due to his actions, or lack thereof. Please keep that in mind. It took me a long time to learn that lesson about my then-partner.

secondly, for all that is holy please read every post I've ever made to this one board. Just sort by name, and start from the beginning.

Do the same with Patzer.

If, after all that reading, you still think it's a good idea to mingle finances with someone who has already proven themselves incapable of managing the situation by themselves - I'm afraid nothing anyone can say on this board will be of any help to you.

I wish you luck. You will need it.

impolite

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292096 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 2:04 PM
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Another thing about not taking his debt on your CCs.

The IRS doesn't mess around. And they don't forgive debts. If he owes money to them, they will find out, and they will get their money. And much as he might WANT to give you $ for your CCs, he simply may not have it to give. The IRS always comes first.

Plus - he could get hit by a truck, find himself ill, or have family medical obligations that take precedence.

It's simply misplaced enthusiasm to think that there will always be $ coming in from other sources to pay that CC once it is yours. If you do it, make sure you can afford to pay it 100% yourself, as it may come to that.

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292097 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 2:51 PM
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By the way, Hava, just in case you think that this is one of those joint exercises in beating up on people, the reason posters are being so adamant about certain matters, such as not transferring his debt to your cards, is that we have seen people come in admitting that they did the exact same thing, but now they are stuck with the debt and are frantic. And it isn't always because the boyfriend or girlfriend ran away with someone else. Sometimes they became very ill and could no longer work, sometimes other crucial demands were made on them (such as child support) and sometimes life just happened.

People are trying to make you aware of the problems before you take this step. They can see ghastly holes in front of you, and they don't want you to fall in.

Nancy

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Author: LaraAmber Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292098 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 3:20 PM
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First, major hugs to you for going through so many changes in the last few years.

My thoughts:
1. Let's say Hunter is a wonderful standup guy. You open two credit cards and transfer his debt to your cards. Six weeks later when he's coming home from finding a real job, he's struck by a bus and killed. Guess who's responsible for paying back that debt? Yep, you. There is no calling the credit card companies and saying "but it's really Hunter's debt and he's deceased". This idea is a NO WAY IN HECK.
2. He already has financial obligations other then you. The first on that list is the child. Helping you, a recent girlfriend, should come way, way after providing for himself and his kid. So any money from a sale of property should be going towards HIS debts and obligations and not yours.
3. Who the heck says you can't make your husband pony up money? I'm sick of hearing people just give up on ex-spouses without really trying. You either need to relinquish claim on the house and he takes over the full mortgage, or you call him up and talk about the fact he will need to pay half the shortfall if you sell, so he better start looking at loan terms.
4. Hunter needs a REAL JOB. Anytime a person spouts a profession but isn't consistently earning at it, they don't have a real job. They have a hobby that occasionally brings in income. I don't care if he works nights at a call center or stocking shelves at the grocery store, he needs a REAL JOB with a REAL PAYCHECK. What is he doing for health insurance?
5. You guys are living together. You aren't married. Therefore a lot of the legal protections that come with marriage don't exist in this case. Do not mingle accounts, debts, or property. Regardless of what house you guys live in, one of you is the landlord, and one is the tenant. Don't start putting each other on the refinancing documents, etc.
6. When you say "end of April" you asked for a divorce and since then fell in love with Hunter, etc. do you mean April 2008? 2009? Either way that is not a long time for a relationship, especially when we are talking about large chunks of money changing hands.
7. You may need to find a job that pays more then the library.

Let me give you a short run down of my story. I met my husband right before I graduated from college. We moved in together a few months later, with separate bedrooms (in case it all fell apart, we'd still have space), as renters. Six years later we got married. In the meantime we bought our house. It was solely in his name and I was a tenant. When we got married, then we put the deed and mortgage in both names, then we got joint accounts, and then we operated as one financial unit, not one day sooner.

Hunter may be the sweetest man ever. You may end up marrying him in a few years. In the meantime, what's his is his and what's yours is yours. You can offer advice, you can help with paperwork, you can give backrubs on really rough days. Your checkbook needs to stay firmly closed and so does his.

Lara Amber

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Author: karenlj Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292099 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 3:41 PM
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Run over the the YNAB forums and read Silverlining's journal.

Link, please?

Thank you.

Karen

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Author: HavaTheFool Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292100 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 3:49 PM
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First off, thank you to everyone for their input. It looks as if there's a pretty general consensus that balance transferring Hunter's debt onto my credit card(s) is a bad idea. I do understand that.

I'm sure that moving back in for a week will help you justify it to yourself. But IT'S NOT YOUR PRINCIPAL RESIDENCE. The Making Home Affordable program is for people who live in their home, not those who want to rent out their home in order to try to break even on their bad purchase and financing decision.

You trying to get your loan modified is going to take resources that the mortgage company could be spending to help someone who is actually living in their home. And believe me, the mortgage companies have a lot more people who are asking for help than they have the resources to help.

Yes, I'm sure you can justify it to yourself. After all, it seems like everyone is trying to line up in the bailout line nowadays, and getting mad if they can't find a line that they can get a bailout. But is it really the right thing to do?


In my eyes, it is one of the best things I could do for the mortgage company. Let me tell you my reasoning, and then you can tell me where (or if) I am wrong.

If I do a short sale on the home, then the bank has to agree to A) Forfeit all interest on the loan and B) Forfeit a portion of the loan amount that I had agreed to pay. For example, they lent me $95,000, but through the short sale, they only receive $85,000 of that back (plus the $2,300 I've paid in principal). So they are being shorted (hence the name) $7,700. At least. That's if we find a buyer who will buy it at $85,000, and pays all of the closing costs.

On the other hand, doing a loan mod would mean that A) They continue to receive interest (even if it's much less than before) and B) When I sell the home, they will receive the full amount of the loan back. They are shorted nothing, and they continue to make money on interest until the house is sold.

To me (and again, please tell me what I'm missing) that seems like a better deal for the bank.

You know what drives me crazy? People who get themselves into a giant mess, and then blame everyone but themselves for it. "Well, it isn't my fault, it's the bank's fault!" I absolutely am not like that. I know, beyond a shadow of a doubt, that much of this is my fault. I wanted a great house in great shape in a great neighborhood, but it's a one bedroom. I should have looked at that, and said no, I can't do it. At the time, I thought that we could remodel the basement and make it into a three bedroom, two bath, but have since found that with the structure of the house, it won't work. But part of my decision was based on false impressions of what could and could not be done.

The bottom line is, I am trying my absolute best to do what's right for everyone - the bank, my ex-husband, my boyfriend, and me. I do not want to do a short sale or foreclosure because to me, it seems morally wrong. I agreed to pay this amount when I signed the dotted line. I need to repay that money now. No one put a gun to the back of my head and forced me to buy a charming house in a beautiful neighborhood. That was my choice. As for my ex-husband, as much of an ass as he's been since the divorce, I still feel as if for seven years of marriage, I need to do the best for him that I can. Therefore, I need to get him off the hook for his portion of the house payment ASAP. He is paying me $325 a month when he'd much rather use that money to save up so he can move out of his parent's basement. He didn't want this divorce - not at all. I did. So I feel guilt that he has to pay me $325 a month towards a house payment when doing so is keeping him from moving on with his life. I take responsibility for the decision to divorce but I still stand by that decision because in the long run, it's SOOOO much better for all involved.

I also feel guilt for dragging my boyfriend into this mess. He is trying his hardest to help me sell the house, and to somehow figure out how to financially get me out from underneath the weight of this mortgage. I am working two part time jobs and going to school - I cannot, under any circumstances, afford this house on my own. I never in a million years would have bought it if I had been single. Because of Hunter's support, I've been able to eat - monetarily, I run out of money before things like food come into play. He wanted to keep the land in the country and someday build a house on it. Instead, now he's got it for sale and is going to help me shed this bad mortgage. I feel horrible about that. I'm sure that he could find better ways to spend this money than to send it to my mortgage company.

So I have all of these people and businesses that I am trying my best to be fair to. I chose this mess - I can't shove it off onto someone else.

Does that make more sense?

The topic of paying off my mortgage to get rid of my house payment vs paying back child care owed (or credit card debt) has come up in several postings. I honestly had not thought about that, and so appreciate that point of view being brought up. This is how I see it; please tell me what I'm missing:

My old house is draining us dry. I am paying $415 a month in house payment, plus utilities, plus paying for any repairs that need to be made. If you look at just house payment and utilities for the house, I am at $488, not counting the gas bill that I will have to pay this winter to keep my pipes from bursting (I will be setting the thermostat at roughly 50 degrees). Look at my budget - can you imagine all of the good that (let's pick a nice round number to keep things simple) $525 a month could do? Freeing up $525 a month would then allow us to pay the back child care owed - we could easily pay her an extra $300 a month until we were caught up. The other $225 could go towards credit cards, IRS taxes - you name it, we'd be paying towards it. I feel like we're trying to swim, and that this house is a gigantic anchor around us, pulling us down, and that if we don't get rid of it, we're going to get sucked under. We sure as heck would not use that extra money to pump up our lifestyle and really go to town with it.

In my mind, we need to get rid of my house, and (an important point) sever the last of the ties with my ex. He is trying to take being an ass to a new art form. I haven't said much about his post-divorce behavior, but let's just say that it isn't pretty. So whether Doug signs the house over and I do a loan mod, or we sell the house and use the proceeds of the property in the country to pay the mortgage at closing, it needs to be done. I can't continue to live in limbo.

If we do the loan mod, I already have two ladies at my job at the library who have both expressed interest in renting my house. They are obviously clean, upstanding citizens of the world, and I wouldn't have to worry about my house being trashed (librarians rarely throw wild parties, at least that they ever invite me to. ;-))

Somewhere it was said that I should quit going to school and get a full-time job to help pay bills. At this point, that would financial suicide. I would have to pay back all of my federal Pell grant and both of my scholarships, not to mention completely thrashing my scholastic record at the school and giving me virtually zero chance of getting scholarships when I do make it back to going to school. All of that to be able to get a job that at best, I would make $9 an hour at. $9 an hour times 40 times 4 weeks in a month = $1440 per month, before taxes. I cannot make more than that without even an associates to point to, and since a major employer in town just laid off 500 people two weeks ago, I'd be extraordinarily lucky to get even that per hour. I live in a part of the US where wages aren't so hot. That's just life. But financially, it makes ZERO sense to have me quit school and get a full-time job. If someone sees something that I'm missing there, please tell me.

As for Hunter quitting being a real estate agent and working a regular job, or at least getting a part-time job to supplement his income, both of those options are something we've discussed in GREAT depth. He is truly a great real estate agent - this is his nitch (? why does that look wrong?) - his passion in life. He's damn good at it. But bills need to be paid, and if it comes to that, he will quit being a real estate agent in order to get a 9 - 5 job. More than a few realtors have done it, and I'm sure more than a few will continue to do it. We aren't quite there yet. A part-time job, especially during the winter, is something we are constantly discussing. In fact, if you guys have any good ideas in that area, I'd love to hear them. He'd need to find something that is flexible and would hopefully allow him to be done and over with in the morning part of the day. Most people like to see homes in the afternoons or evenings, and especially on the weekends, so working a job as a pizza delivery boy would be the worst possible solution for him. We have talked about him selling items on eBay, about him delivering propane to customers...any other ideas? I'd love hear 'em.

Now I need to go to work at the library, so I'm going to run. I am sorry I haven't been able to respond to everyone - I will try to write more later tonight. Maybe. ;-) Tuesdays are one of my busiest days.

Thanks again for all of the feedback and thoughts, everyone. It really helps to bounce things off of you all.

Hava

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Author: MacNugget Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292101 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 3:49 PM
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Having just done this googling, myself... I think this is it:

http://www.youneedabudget.com/forum/viewtopic.php?f=18&t...

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292102 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 3:50 PM
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LaraAmber: I'd quibble a bit with a "not real job" thing. By your standards I don't have a real job either as I have just had seven months with no income. Zip. Nada. Zero.

I have a variable job. I know it's feast or famine. But it is NOT a hobby. And I saved money to carry me over the bad times. What Hunter has not done is budget any savings that would do that. So he may not have the luxury of being able to sustain his realtor role through bad times. If that's the case, yes, he needs to bail. And yes, he needs to get some kind of other filler job.

And if he cannot save money to carry him through bad times consistently and in the future, he needs to get a regular job with a paycheck, as a variable job is really only for the financially disciplined.

Oh - and if I had a kid - I would have bailed already probably.

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Author: JimmyDe Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292103 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 4:03 PM
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Hi,
What's the possibility of Hunter getting a 0% credit card and do the transfer bit?
L8R, Jim D.

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Author: JGBFool Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292104 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 4:06 PM
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You have my sympathies. This is truly a tough situation.
I don't have a lot of specific advice that is nearly as good as some of the other posters, but I think you should re-read these three passages from your post:
As for my ex-husband, as much of an ass as he's been since the divorce, I still feel as if for seven years of marriage, I need to do the best for him that I can. Therefore, I need to get him off the hook for his portion of the house payment ASAP. He is paying me $325 a month when he'd much rather use that money to save up so he can move out of his parent's basement.
...
My old house is draining us dry. I am paying $415 a month in house payment, plus utilities, plus paying for any repairs that need to be made. If you look at just house payment and utilities for the house, I am at $488, not counting the gas bill that I will have to pay this winter to keep my pipes from bursting (I will be setting the thermostat at roughly 50 degrees).
...
In my mind, we need to get rid of my house, and (an important point) sever the last of the ties with my ex. He is trying to take being an ass to a new art form. I haven't said much about his post-divorce behavior, but let's just say that it isn't pretty.


He is paying A LOT less per month for the house than you are, and yet you seem to be volunteering to take all of the hardship due to the loan being "underwater". My advice is that you really need to worry about yourself and your own financial situation, and feel less guilty about holding your ex-husband accountable for his responsibilities with the "underwater" mortgage.

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292105 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 4:29 PM
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Boy, today is my day to ramble...here's another thought I had:

You mention that with $525/mo savings from the house payment it could free up $ for various things including IRS. Setting aside the fact that it would most likely not be that as you would still need $ for repairs, vacancy periods, insurance, etc - I would NOT consider any $ you have to go towards Hunter's IRS debt.

And here is why...

As a self-employed person with a variable income stream (or indeed any independent business person), Hunter's income must be able to pay his own taxes. If not - well, then as someone else said, it's a hobby, not a business. The business needs to be self-sustaining and able to support him - AFTER taxes are set aside. And if it's being propped up by other sources of cash, then it's not a business he should be putting time & energy into. The business accounts need to show that income less taxes, less expenses = net profit. And that net profit needs to be enough to live on.

I may have misunderstood you though. If you meant it would go towards your own IRS obligations, as relates to income from a rental, then that's another story. Because you would of course have taxes paid on rental. But in any case your house and Hunter's business need both to be net cash flow positive and supporting you, not the other way around.

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Author: GuildWarsQueen Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292106 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 4:39 PM
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A part-time job, especially during the winter, is something we are constantly discussing. In fact, if you guys have any good ideas in that area, I'd love to hear them. He'd need to find something that is flexible and would hopefully allow him to be done and over with in the morning part of the day. Most people like to see homes in the afternoons or evenings, and especially on the weekends, so working a job as a pizza delivery boy would be the worst possible solution for him. We have talked about him selling items on eBay, about him delivering propane to customers...any other ideas? I'd love hear 'em.

Bartender, stocking shelves at night, delivering newspapers in the morning, working morning shift someplace (fast food, bakeries, etc.), driving a school bus, etc.

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Author: LaraAmber Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292107 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 4:59 PM
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Hava,

Here is a major problem I have with your latest post. You say "Look at my budget - can you imagine all of the good that (let's pick a nice round number to keep things simple) $525 a month could do? Freeing up $525 a month would then allow us to pay the back child care owed - we could easily pay her an extra $300 a month until we were caught up."

You are NOT a "we".

Your income does not go to paying his back child support. His income doesn't go to paying your mortgage. Your income doesn't go towards his tax bill. His income doesn't cover your bills. You are living with your boyfriend, not with a husband. Stop thinking in couple terms. In a few years IF you're married, then start thinking in couple terms and "one pot of money".

I agree that you need to stop with the guilt over the husband. He should be paying half, including half of any leftover debt if the house sells. It doesn't matter if he wanted the divorce, if he wasn't holding up his end of the marriage, it's just as much his fault.

You asked for ideas of jobs for Hunter. That's easy. Grocery stores always need night stockers and clerks. Buildings need night security. There are plenty of graveyard shift jobs out there where he could work from 9 PM or later until morning, sleep in the morning, and be bright-eyed and bushy-tailed for afternoon and evening clients. I worked the graveyard shift all through college.

Lara Amber

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Author: VikingErik Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292108 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 5:13 PM
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He's committing his money to me, and I'm committing my money to him. At some point, you just have to take that leap.

That point is marriage. And for partners with debt loads, it's probably wisest to not take that leap even afterwards.


he promised me that if we were to break up, he would pay the debt

A noble promise. But if he doesn't have that money, that promise doesn't do you any good.


Just two quick thoughts,
- Erik

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Author: ncharge Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292109 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 5:18 PM
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Hava, it sounds like you have read the responses, but not really listened. You say you understand that it would be a mistake to take Hunter's debt on to your cc, but you are still thinking like a married person with combined finances instead of a single person with no legal recourse if things go bad for any reason. That means that your profit and loss for that house is your problem, not Hunter's problem. And the profit from his land sale needs to fix his problems, not your problems. And his child support, cc, or IRS debt is his, not yours. You do owe him rent and a share of the utilities if you are living in his house. Annd that is all you owe him.

And this idea that you are responsible for your ex-husband's loss one the house each month is wrong because, even though you requested the divorce, he also contributed to the failure of the marriage. He needs to face the consequences as much as you do.

I hate to say this and I really hope you take it in the spirit intended - as a valuable lesson that I personally learned the hard way. Be able to stand on your own two feet before you jump into another relationship. Don't jmump into a relationship just as another is breaking up because it may be based on fear of being alone and need for companionship rather than the stuff that promotes long-term happiness. I'm sure he is a wonderful person. And so are you. You are loving, loyal, and generous to a fault. But you really need to be loving, loyal, and generous to yourself first - before you commit everything you have to a new person. Date, share companionship, get to know each other. But don't commit everything until you (and Hunter) really have a solid foundation for your own life. Then you will have something solid to commit.

If you insist on thinking like a couple, I do have one suggestion. Hunter's house costs much more than yours. Sell his and live in the one-bedroom until you can afford more. He should pay you rent. It greatly reduces his costs so he can catch up on IRS, child support, etc. You can use the rent payment from him to pay off any debt you have. You may be able to reset the mortgage to an even better monthly rate and free your ex from any obligation. And you will have your own home if things don't work out with Hunter.

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Author: impolite Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292110 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 5:22 PM
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You are NOT a "we".

Exactly. There is no "we".

If you want to support him, fine. Just do so in a financially prudent way - keep your finances separate, and pay down your own debts and allow him to pay (or not, as the case may be) HIS own debts.

You can be supportive by:
1) Cheering him on.

2) Finding way to date cheap (or free).

3) Trying new recipes instead of eating out for dinner.

4) Helping him go over his budget with a fine-toothed comb.

5) Going over his credit reports with him, to determine if there is a way to clean them up and get a better rating.

6) Be flexible when a second job takes away time from your relationship with him.

Do not, under any circumstances:
1) mingle your budgets
2) mingle your expenditures
3) get joint credit
4) transfer any of his debt to your name
5) pay any of his bills

I know of what I speak - I have cohabitated with a man for over two years now. We will marry in less than two weeks now (!!!!).

We have no joint bills. We have no mingled credit. Our only plan to "join" our names financially, when we marry, is to open a joint savings account in which we will both put the same amount each paycheck.

We will keep our own credit. We will keep our own checking/savings accounts. We will keep our own bills, in our own names (he pays the mortgage, I pay utilities and groceries).

We don't hide anything from each other - I have access to all his information, and he has access to all of mine. BUT WE DO NOT MIX THEM.

Please read that again - this is a financially responsible man that bought a home so that my children and I could move in with him. His credit scores (yes, I have seen them) are immaculate, he owes less than the house is mortgaged for, and when money is tight, he works overtime and second jobs to make ends meet.

Still, we don't mix finances. I actually have no doubt that I could turn over every bit of the finances to him and things would work out fine. *But that is not the prudent course of action*, either for me OR for you.

The system we have in place has worked for two years now. It can be done. If you want details of it, I will be glad to answer them, in depth, so that you can see how it can be done.

It's his mess, and it's your mess. But it's is not a joint mess. Clean it up yourselves, individually, with each other's support.

impolite

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Author: LaraAmber Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292111 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 5:39 PM
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Gingko100,

I know people who have real jobs where it is seasonal (tax season, construction season, tourist season, ski season) for money to roll in, and they earn enough to last the rest of the year, so yes Real Job.

I get sick of the "he's a painter/singer/real estate agent/consultant" which is code for "in debt up to his eyeballs, has no insurance, and refuses to grow up and move on". A person who is truly self-employed stays on top of paperwork and obligations, plans for the future, and prepares for the famine period, either by earning enough during feast times to continue, or having backup employment lined up.

The fact that Hunter avoided his mail and didn't go find secondary employment the second the market started to dry up, doesn't do much for my opinion of him as a financially responsible adult (leaving aside all other qualities, which could be stellar). He would be in much better financial shape is said "you know they keep reporting on the falling house prices and home glut, and I haven't closed on a home in 4 weeks, I better go get a job tomorrow doing the opening shift at Starbucks to tide me over."

Lara Amber

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292112 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 5:44 PM
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<<Somewhere it was said that I should quit going to school and get a full-time job to help pay bills. At this point, that would financial suicide. I would have to pay back all of my federal Pell grant and both of my scholarships, not to mention completely thrashing my scholastic record at the school and giving me virtually zero chance of getting scholarships when I do make it back to going to school. All of that to be able to get a job that at best, I would make $9 an hour at. $9 an hour times 40 times 4 weeks in a month = $1440 per month, before taxes. I cannot make more than that without even an associates to point to, and since a major employer in town just laid off 500 people two weeks ago, I'd be extraordinarily lucky to get even that per hour. I live in a part of the US where wages aren't so hot. That's just life. But financially, it makes ZERO sense to have me quit school and get a full-time job. If someone sees something that I'm missing there, please tell me.
>>


People like to complain about credit card companies that lend money to people who use it foolishly. Here we have a case study about student loan debt that is systematically destroying someone's life.


Education is a curse for this person.




Seattle Pioneer

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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292113 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 6:14 PM
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If I do a short sale on the home, then the bank has to agree to A) Forfeit all interest on the loan and B) Forfeit a portion of the loan amount that I had agreed to pay. For example, they lent me $95,000, but through the short sale, they only receive $85,000 of that back (plus the $2,300 I've paid in principal). So they are being shorted (hence the name) $7,700. At least. That's if we find a buyer who will buy it at $85,000, and pays all of the closing costs.

On the other hand, doing a loan mod would mean that A) They continue to receive interest (even if it's much less than before) and B) When I sell the home, they will receive the full amount of the loan back. They are shorted nothing, and they continue to make money on interest until the house is sold.


No. You are missing the time value of money. Loaning out $97k at 2% - 2.5% for 30 - 40 years is a lot less valuable than getting $88k in hand today. This is especially true if you are having to pay 5% - 9% to borrow the money, like the banks are paying on their TARP borrowing.

The bottom line is, I am trying my absolute best to do what's right for everyone - the bank, my ex-husband, my boyfriend, and me. I do not want to do a short sale or foreclosure because to me, it seems morally wrong.

And taking advantage of a modification program that is explicitly designed for people who are using their homes as their principal residence when you (1) aren't even living there now and (2) have no intention of ever occupying it as your principal residence again is morally right? I, as a taxpayer who will be paying for the incentives that both the homeowners and the banks will be getting for those modifications certainly feel that it's morally wrong. And as I pointed out, it may very well not be best for the bank either. And you may get turned down for a modification just because of that.

AJ

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Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292114 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 6:38 PM
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HaveTheFool,

You wrote, In my eyes, it is one of the best things I could do for the mortgage company. Let me tell you my reasoning, and then you can tell me where (or if) I am wrong.

If I do a short sale on the home, then the bank has to agree to A) Forfeit all interest on the loan and B) Forfeit a portion of the loan amount that I had agreed to pay. For example, they lent me $95,000, but through the short sale, they only receive $85,000 of that back (plus the $2,300 I've paid in principal). So they are being shorted (hence the name) $7,700. At least. That's if we find a buyer who will buy it at $85,000, and pays all of the closing costs.

On the other hand, doing a loan mod would mean that A) They continue to receive interest (even if it's much less than before) and B) When I sell the home, they will receive the full amount of the loan back. They are shorted nothing, and they continue to make money on interest until the house is sold.

To me (and again, please tell me what I'm missing) that seems like a better deal for the bank.


I don't know if aj485 will respond to this thread again, given her last reply. But let me take a stab here.

First, it's incredibly naïve to believe that recasting a loan is free to the bank. Reducing the interest rate on a loan has major, short-term consequences to a bank. Short-term it reduces the net-present value of the loan, which must be marked-to-market. ( http://en.wikipedia.org/wiki/Net_present_value ) This reduces the face (book) value of the loan, which is as good as a capital loss to the bank. That’s because if they sell the mortgage, they have to reduce their price so that the buyer effectively gets a market rate.

Long-term, they lose out on interest payments they would have made had you honored your original loan agreement. Also, their capital is now tied up in this low-rate loan. If the bank actually has to hold the loan itself, there’s a very, very, very good chance THEY can’t borrow money at the rate you’ll be paying. And then there’s the possibility the bank sold your loan off a long time ago and it is just the servicer. If that’s the case, some individual or some pension plan is going to have to take this hit on their portfolio to fund your loan modification.

In all likelihood, the bank and/or the lender will probably lose out at least 5 to 10% of the value of your home as a result of a modification. That’s comparable to the $7,700 you project for a foreclosure in own post.

You appear to reside in Idaho. I’m no expert in these matters, but it appears that despite what some websites say Idaho is a recourse state. ( http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1432437 ) What I mean by that is your lender can sue you for amounts owed, but not covered by the market value of your house. Unfortunately for your lender, Idaho’s recourse statute has onerous time constraints that may be difficult to meet in practice. But if I were you, I wouldn’t bet on them not meeting them – after all, they’ve probably been getting a lot of practice at it lately. That means that the lender MAY be able to recover the entire amount from you.

If I were the bank, I’m not sure I’d agree with your analysis. It depends on whether or not your estimate of the sale price is accurate. Indeed, you might be over-estimating what they can get. After all, even the bank may have to pay some commissions and closing costs in a foreclosure sale.

So I guess my point is that from the bank’s perspective, the two solutions to your problem are both painful. They also have the potential to be equally expensive. If I owned your mortgage, I’d have a hard time deciding. If I thought the home market had firmed up, I might prefer a foreclosure. That way I can write off the loss today and be done with you as a borrower.

Also, The bottom line is, I am trying my absolute best to do what's right for everyone - the bank, my ex-husband, my boyfriend, and me. I do not want to do a short sale or foreclosure because to me, it seems morally wrong. I agreed to pay this amount when I signed the dotted line. I need to repay that money now.

The problem is that you only want to honor part of your agreement. The other part of your agreement has you paying a certain interest rate. You don’t seem to count that as part of your obligation. I personally think that if people were honest and fair, they’d seek to repay their loans as agreed OR they’d find a way to refinance them. Ultimately, what a request for a loan modification amounts to is a threat to default if the lender doesn’t change the terms. Maybe it’s just me, but I see that as more reprehensible than just defaulting and allowing the foreclosure process to proceed. (Or submitting a deed in lieu of foreclosure.) Those were outcomes contemplated as risks by the lender when they undertook the loan. I don’t see how changing the rules of the game with a lender mid-course is any better.

And, He wanted to keep the land in the country and someday build a house on it. Instead, now he's got it for sale and is going to help me shed this bad mortgage. I feel horrible about that. I'm sure that he could find better ways to spend this money than to send it to my mortgage company.

So I have all of these people and businesses that I am trying my best to be fair to. I chose this mess - I can't shove it off onto someone else.

Does that make more sense?


I’m not sure you should feel bad about that. He should be selling the property to satisfy his own debts – not yours. If anything, it sounds to me that he’s making this offer to use the proceeds for your benefit to establish an emotional (guilt) tie to you. And it sounds like you’re going to allow it. Honestly, what are you thinking here? Clearly your emotions are already tied up in this (and him) as I can't imagine any rational person would allow what he's planning.

Also, If you look at just house payment and utilities for the house, I am at $488, not counting the gas bill that I will have to pay this winter to keep my pipes from bursting (I will be setting the thermostat at roughly 50 degrees).

This is actually an unnecessary expense, though I can understand why you think it's necessary. Even if you live in a cold climate, you can “winterize” your house by draining the pipes. Usually all that’s necessary is to shut of the water main and then open the lowest pressure value (faucet) in the house – preferably an outside one. Also flush the toilets. Leave the faucet (at least partially) open. Pipes only burst because water is an incompressible fluid and expands to 110% of its liquid volume when it changes to a solid. If you drain (most of) the water out of the pipes, they shouldn’t burst even if it drops to 0F. Of course other things in your house might be damaged by the cold … but that’s usually only a serious problem when it gets really hot, not cold.

And, If we do the loan mod, I already have two ladies at my job at the library who have both expressed interest in renting my house. They are obviously clean, upstanding citizens of the world, and I wouldn't have to worry about my house being trashed (librarians rarely throw wild parties, at least that they ever invite me to. ;-))

Maybe I missed something here. Why on earth is this dependent on the loan modification going through? Do you have some obscene, double-digit mortgage rate? Won’t these ladies rent it without the loan modification? Wouldn’t renting your house out solve your income problem and get your mortgage paid in one step? If you’re not willing to let the property go back to the bank and you have renters ready to sign, why on earth aren’t you prepping it for rental? Sell your contents, move the stuff to your BF’s or a rental or rent the place furnished. However you do it, get your personal effects out of there and rent it out!

Or is it that you want to stiff the lender … I mean get a loan modification … first?

- Joel

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Author: karenlj Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292115 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 6:42 PM
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Having just done this googling, myself... I think this is it:

http://www.youneedabudget.com/forum/viewtopic.php?f=18&t......


The link works just fine. You have to register to read, though.

Thank you.

Karen

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Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292116 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 7:00 PM
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JimmyDe,

You wrote, What's the possibility of Hunter getting a 0% credit card and do the transfer bit?

Probably near 0. I think she posted that he's trashed his credit, which would make getting any card difficult these days. A 0% intro-BT offer on bad credit seems extremely unlikely.

He still has some resources. He should sell his "country property" and pay off his debts instead of sticking his head in the sand. Until he can make that happen, maybe he needs a part-time job so he can make the payments?

- Joel

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Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292118 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 7:16 PM
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HaveTheFool,

One last thing, ... All of that to be able to get a job that at best, I would make $9 an hour at. ...

$9/hr? I think you've just given up. Else, you live in a very, very small town.

Around here, Wal-Mart pays $9/hr. Or close to that. Starting out. Not that their pay-scale goes much above that.

DiscountTire (not for weaklings!), pays $11/hr starting out - no high school diploma required! My son did that job for over two years. (Put some real muscle on the kid.) He quit that to take a job as a electrician's apprentice.

My son's girlfriend was a waitress in college. Pretty sure she made more than $9/hr with tips. Of course she went through a few until she found a place where the tips were good.

I also know of call centers that pay $12/hr. I think they require a GED or high school diploma.

Maybe it's just from personal experience that I seem to scoff at your assertion. It may be true for all I know. But my little brother works at Wal-Mart and makes about $10/hr. He's married now and has two kids to support. aj485 and I have tried to push him toward better paying jobs. He always manages to find an excuse not to follow through.

You should realize that an increase in income would fix a lot of your problems. And working more hours isn't always the only option.

- Joel

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292119 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 7:28 PM
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And taking advantage of a modification program that is explicitly designed for people who are using their homes as their principal residence when you (1) aren't even living there now and (2) have no intention of ever occupying it as your principal residence again is morally right?

I'm glad you brought up the moral question. I thought it sounded shady, but I didn't know enough about the terms to be positive.

Nancy

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292128 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 8:53 PM
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As for needing to live in the house in order to do the loan mod, yes, I definitely do know that (some days, it is helpful to be dating a real estate agent, because otherwise, I would be completely lost). My house is only a few streets over - I can walk there in 10 minutes, easy. So living there is only a question of packing a bag and moving back in for a week. I pay all of the utilities and have kept everything there - couches, bedroom set, fridge, freezer, etc - and even my parents don't know I don't live there. I hope that helps.

I am a libertarian through and through, and firmly believe that people need to be held responsible for their actions. Whether it's a person who is agreeing to something because he doesn't understand (in which case instead of blindly agreeing to things, he should have said, "I will call you back when I have someone here with me who can help me interpret what you're saying") or someone who is buying magazine subscriptions for magazines they'll never read because they're higher than a kite, those people are still responsible for what they did, and they need to pay the bill for it.

http://boards.fool.com/Message.asp?mid=28009610&sort=use...

It could be that my view of them is out of whack, but I thought Libertarians were opposed to government handouts?

Nancy

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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292129 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 8:57 PM
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And taking advantage of a modification program that is explicitly designed for people who are using their homes as their principal residence when you (1) aren't even living there now and (2) have no intention of ever occupying it as your principal residence again is morally right?

I'm glad you brought up the moral question. I thought it sounded shady, but I didn't know enough about the terms to be positive.

Here is a link to the Making Home Affordable website: http://makinghomeaffordable.gov/

Question 1 on the checklist to see if you qualify for a modification ( http://makinghomeaffordable.gov/modification_eligibility.htm... ): Is your home your primary residence?

The process to get a full modification generally takes at least 5 - 6 months - the first 2 or 3 months is what it takes for mortgage companies to approve you for a trial modification. Then, after the trial modification is approved, you need to make 3 on-time payments of the new payment amount before you are approved for a full modification.

Somehow, moving back in to the house for a week during that 5 - 6 month period doesn't scream 'primary residence' to me. But, then, I have been accused of being 'too ethical for my own good' and 'the morality police'.

But, I don't know why we are continuing to argue with Hava - she has obviously made up her mind that she is the same as married to the guy, so they have to co-mingle their finances, no matter what the legalities of the situation are. Having lived in Utah, my guess is, it's probably a guilt thing about living together, rather than being married. And no amount of argument from us will get her out of that 'even if we aren't married, we have to pretend we are' train of thought - LDS guilt is as bad as Jewish or Catholic guilt.

I must say, though, it seems a bit early in the relationship for co-mingling finances to me - Joel and I dated for 7 months before we moved in together, we have been living together for 3 years and 9 months next week, and we still don't co-mingle our finances, except for specific purchases that we talk about. When I pay the car insurance, he pays me back. It's my turn to pay when we go out to dinner tonight. I closed on the sale of a house last week, and none of the money I got went to Joel. When he sells his house, I won't be getting any of the money from him. If we were to get married (probably won't happen except for insurance or social security reasons) I doubt we would co-mingle our finances much more than we do now. Hava and her SO have been together for, what, 6 months?

AJ

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292130 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 9:12 PM
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I must say, though, it seems a bit early in the relationship for co-mingling finances to me - Joel and I dated for 7 months before we moved in together, we have been living together for 3 years and 9 months next week, and we still don't co-mingle our finances, except for specific purchases that we talk about. When I pay the car insurance, he pays me back. It's my turn to pay when we go out to dinner tonight. I closed on the sale of a house last week, and none of the money I got went to Joel. When he sells his house, I won't be getting any of the money from him. If we were to get married (probably won't happen except for insurance or social security reasons) I doubt we would co-mingle our finances much more than we do now. Hava and her SO have been together for, what, 6 months?

But you'd known him on the boards for how many years? You'd read many, many of his posts regarding finances, equity, marriage, and so on. You already knew what his beliefs were in regard to debt and repayment, and you'd developed a sense of his ethics and attitudes. You had read posts where he tried to put together a way for someone to repay a debt without losing everything else. So you knew him even before you started dating.

It's like that old line: I wasn't picking you up, I was picking you out.

Nancy

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292132 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 10:47 PM
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Dumb Q - but isn't it actually mortgage fraud (not just a "not very nice" thing) to claim it as a primary residence when it isn't? Don't you have to sign papers saying that you live there and not somewhere else?

I think it's a far better idea just to deal with this all honestly - rent it out starting right now to cover part of mortgage, or short sell it, or let it foreclose - and let the chips fall where they may, rather than spend the next 6 months lying about it (and that's how long modification may take, or longer) and then sign legal documents falsifying your status.

It would make me positively bug out to sign legal forms fraudulently. I'd worry about that forever.

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Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292135 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 11:27 PM
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Windowseat,

You wrote, It could be that my view of them is out of whack, but I thought Libertarians were opposed to government handouts?

Libertarians also believe in working within the current system, even if they don't agree with it.

Besides, our primary objection is the use of public funds (tax dollars) to the financial benefit of individuals or corporations. (As opposed to the general defense and welfare of the nation.)

But if the government is handing out money, we certainly want our share - after all, we're still going to get stuck paying the bill for it!!!

- Joel

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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292136 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/6/2009 11:36 PM
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Dumb Q - but isn't it actually mortgage fraud (not just a "not very nice" thing) to claim it as a primary residence when it isn't?

Yes, it is.

Don't you have to sign papers saying that you live there and not somewhere else?

Oh, you mean something like this? 6. Occupancy Borrower shall occupy, establish, and use the Property as Borrower's principal residence within 60 days after the execution of this Security Instrument and shall continue to occupy the Property as Borrower's principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent shall not be unreasonably withheld, or unless extenuating circumstances exist which are beyond Borrower's control.

Yeah, that's a pretty typical occupancy clause for owner-occupied mortgage loans - at least it was the same clause in my last two mortgages. I haven't personally signed any modification loan docs, but my guess is that there is a similar clause, if not even more restrictive, in the modification loans. Modifications are, after all, for people who are supposed to already be living in their homes, and who are supposed to be planning on keeping their homes. Therefore, I wouldn't be surprised if the requirement was for them to currently be living in the home (not 'within 60 days), and possibly for the occupancy requirement to be longer.

I think it's a far better idea just to deal with this all honestly - rent it out starting right now to cover part of mortgage, or short sell it, or let it foreclose - and let the chips fall where they may, rather than spend the next 6 months lying about it (and that's how long modification may take, or longer) and then sign legal documents falsifying your status.

Seems like a reasonable approach to me.

It would make me positively bug out to sign legal forms fraudulently. I'd worry about that forever.

As well you should. Fraud is one of those things that they can come after you for a long time.

AJ

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Author: xraymd Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292138 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/7/2009 12:05 AM
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Greetings, Hava, you did invite comment about your circumstances and your current intentions/plans. Here's what my take is: you feel certain that Hunter will not let you down if you take on debt of his into your own hands. But you also felt certain at one point that you were making a good decision about your home purchase yet ended up with real regrets even as you acknowledge your part in the decision. Let me take your own words and re-annotate them in your current circumstance:

You know what drives me crazy? People who get themselves into a giant mess, and then blame everyone but themselves for it. "Well, it isn't my fault, it's the bank's fault!" I absolutely am not like that. I know, beyond a shadow of a doubt, that much of this is my fault. I wanted a great house in great shape in a great neighborhood "wanted a boyfriend who is on solid financial footing who is not facing credit card rates of 28.99%", but it's a one bedroom "but he does have the debt he has, to the parties he owes, including to the IRS, and has child support in addition to all of this other financial red zone".

I should have looked at that, and said no, I can't do it. (comment stands for itself)

At the time, I thought that we could remodel the basement and make it into a three bedroom, two bath "At the time, I thought I could cover his debt and that he would be able to meet his obligations to paying me back plus paying all his other creditors back plus paying his child support", but have since found that with the structure of the house, it won't work"but have since found that with the structure of the debt, it won't work - I am on the hook for all of the debt of his I took on, no matter how much I thought he would do to take care of paying it off in full, and it has began to weigh on me more than I could myself afford to pay".

But part of my decision was based on false impressions of what could and could not be done. (comment again stands for itself)

Hava, love Hunter all you can but love yourself and your financial soundness just as much and let Hunter demonstrate to you that he will step up to his own financial obligations and not enmesh you into something that is his to handle. As others have said, there are many ways to be helpful to one another and to bolster one another that do not put one another AT RISK. Hunter's first obligations are to his daughter and to his creditors. Why on earth would he want to put you in financial harm's way to make his own debt mess a lighter burden that makes yours infinitely heavier? He ought to want as fervently as he can to clean up his financial house to keep you from falling through the floor into the quicksand beneath the foundation.

And what about his daughter?

And what about your own professed recognition of an unsound decision you made at one time that you regret and are trying mightily to undo? Can you recognize the parallels inherent in considering taking on any of Hunter's debt as your own and what is unsound about that no matter his good intentions?

xraymd

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Author: HavaTheFool Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292139 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/7/2009 12:12 AM
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Hey everyone, I'm sorry my posts have been so hit and run today - Tuesday is my day to be gone from 9:30 am to 9:00 pm with only a break for lunch and dinner (Thursday is too, for that matter). Anyway, I feel bad that I've only glanced on some topics instead of answering each post more fully. I have about 30 minutes before I need to go to bed, so we'll see how far we get, eh?

It could be that my view of them is out of whack, but I thought Libertarians were opposed to government handouts?

ABSOLUTELY!!!!!!!!!!!!!!!!! You are 100% correct. That is why it took me months to finally get to the decision to do a loan mod (IF the house wasn't under contract by November 15th). I heard about loan mods and short sales from the beginning - after all, I'm dating a real estate agent. But, I fought the idea from the get-go. At that point, I was still living in my house so I didn't even have that moral dilemma to deal with, but I still didn't want to do it. Damn it, I had signed a contract, I had agree to pay that contract - come hell or high water, I was going to fulfill my obligations! I called twice in to my mortgage company to get information on both short sales and loan mods, but both times the paperwork sat here, untouched, because I just couldn't bring myself to do it.

Just a few days ago, I finally came to the conclusion that in some cases, I just had to bite the bullet and do something, even if it went against what I believed, because my options were simply bad, worse, and downright awful. Faced with A) Continuing to pay my full house payment each month for the next 30 years and forcing my ex-husband to kick in his portion of the house payment during that time, keeping either of us from moving on; B) Doing a loan mod and at least fulfilling most of my obligations, and at the same allowing my ex-husband to move on with his life; or C) Doing a short sale or foreclosure and really stiffing the bank in the process...

Well, Option B seemed to hurt the least amount of people the least amount. I gave you guys my reasoning for wanting to do a loan mod above - I was completely serious when I said that one of the biggest reasons for wanting to do it was because I felt like it would hurt the bank the least. I am a capitalist through and through, and a libertarian to the core. That played a big part in that decision.

However, I got home from work and read the posts made after mine, and I realized that however well intentioned that decision was, I would still be hurting the bank. I knew I would be hurting it some, but I figured it was better than the alternatives. Turns out, I was wrong, and I thank all of you (especially Joel and AJ) for helping me understand that. There's a lot to banking that I didn't know before. I shall have to add some books about banking to my reading list. ;-) I love to learn.

So after I read your responses to my loan mod explanation and realized that doing the loan mod wasn't tenable, I thought, "Okay, then, we'll simply have to rent the house out for $550 a month, pay the extra $190 out of pocket which will make things tight monetarily (but what choice do we have?), and then hope for a better market come spring." I stood up from the computer and put on my jacket to go to class when Hunter came home.

You guys won't believe the good news:

Hunter received an offer today for $95,000 for my house.

*Cue fireworks*

The gentleman who offered $85,000 a couple of weeks ago came back with another offer today of $95,000. He is a builder here in town who wants an office, so he will be converting my house into an office.

This is really, really, really good news. :-D I laughed, I kissed Hunter, I swung Hunter's little girl around and around in a circle - we had ourselves a little mini celebration.

Details: Because of closing costs, I will have to bring $4277.50 (roughly) to the table at closing (the buyer is paying most of the closing costs, which is just AWESOME!!!!) I have BT checks for my credit card (which currently has a zero balance) for 1.9% until June 2010 with a 4% BT fee. I have a $7000 credit limit, so I will be able to pull that amount off the card without a problem. The great news is, since it's a smaller amount (not $15,000 to $20,000 like we were looking at before) I think I will push my ex to help pay for part of it; Hunter and I were thinking about $1500? He could pay me in three payments of $500. Then I would be done with him and wouldn't have to cry, beg, or plead any longer for him to pay his portion of the house payment (have I mentioned yet that he's been an ass?)

So in the end, I am going to be able to pay off my house by doing a simple BT on my credit card, and I will have fulfilled my responsibilities to all involved - Hunter will not have to take the money from the sale of his country property and help me out with it; Doug will be able to quickly move on with his life; the bank will receive every penny owed to them; and my credit will stay unblemished. Not too shabby. Not too shabby at all. 8-)

Okay, my thirty minutes is up - I need to go to bed. I'm sorry to have not answered everyone's comments yet again, but I will try to get to some tomorrow, I promise.

Thanks to everyone for your help,

Hava

PS Nancy, thanks for the comment about this not being an exercise in mass beatings (or however you said it). I have been reading these boards for several years, and I rather figured that I would receive some pretty negative feedback, but I wanted that in order to clarify my thoughts and help me see something that perhaps I didn't see before. Both of those goals have definitely been accomplished. It's always good to see a kind reminder from you, though, that the intentions are good. :-)

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Author: GuildWarsQueen Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292140 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/7/2009 1:06 AM
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Hava --

Glad you're selling your house.

unsolicited advice:

Make sure you have enough money of your own set aside so in case things don't work out with Hunter, you have enough money for a deposit and a couple months' rent on an apartment.

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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292141 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/7/2009 2:17 AM
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A few comments which you may or may not be willing to read.

1. If you are determined to comingle finances with Hunter I probably have less problem with it than many. I married my husband just weeks after he divorced (we had known each other platonically for a few years) and we did pay off debt he had as part of his divorce settlement. Personally, I am a believer in married couples commingling finances and we did that from the beginning. Of course, the point I am making is that we got married first. If you trust him and love him enough to take on his debt, then marry him and then take on the debt. If you don't want to do that (and I could understand why you might think it is premature) then I would suggest it is too soon to take on his finances. If somehow you still want to do so, then go to an attorney and have a written contract executed that will clearly set forth the responsibilities of each of you.

2. The substance of the loan modification program apparently requires that it be your primary residence. You want to create the "form" of it being your primary residence by living there a week but not create the substance of actually living there. In reality it seems fairly obvious that you and Hunter could move in there and he could then sell his house.

3. You essentially ask isn't the bank better off with the modification than you defaulting. Others have addressed why the loan modification may not be in the bank's interest. I want to address a third group -- legitimate homeowners living in their primary residence who need a modification. There is only so much money to go around. If your loan is modified, doesn't that potentially mean that someone else's loan does not get modified? If you get a modification that is really not for you (if the house is not your primary residence) aren't you taking from those that the modification is really designed to help.

You know. I understand that you have a fixed idea of what you. You want to go to school (personally I think that probably is long term a good move for you so long as you do not go into debt too much), Hunter wants to be a real estate agent and not take a second job (or a replacement job), you want to sell your house, but you don't want to have to come up with cash when you sell. All of those are perfectly natural goals. The problem is that you and he do not have the income to sustain the goals you have set. You want what you can't have.

It is natural to want to pretend that you can have what you really can't have. It is natural to want to bury your head in the sand. But none of that changes the reality. I have made some of these bad decisions myself where I just knew what I wanted and I really didn't want to hear differently. It doesn't turn out very well.

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292142 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/7/2009 6:17 AM
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Besides, our primary objection is the use of public funds (tax dollars) to the financial benefit of individuals or corporations. (As opposed to the general defense and welfare of the nation.)

Then the group that's trying to take over a county in New Hampshire must be some sort of weird spin-off. They're opposed to public roads, libraries, schools, parks and anything else you can name.

Nancy
STILL does not understand people opposed to roads.

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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292143 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/7/2009 7:36 AM
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Hunter received an offer today for $95,000 for my house.

That's great news.

Details: Because of closing costs, I will have to bring $4277.50 (roughly) to the table at closing (the buyer is paying most of the closing costs, which is just AWESOME!!!!) I have BT checks for my credit card (which currently has a zero balance) for 1.9% until June 2010 with a 4% BT fee. I have a $7000 credit limit, so I will be able to pull that amount off the card without a problem. The great news is, since it's a smaller amount (not $15,000 to $20,000 like we were looking at before) I think I will push my ex to help pay for part of it; Hunter and I were thinking about $1500? He could pay me in three payments of $500. Then I would be done with him and wouldn't have to cry, beg, or plead any longer for him to pay his portion of the house payment (have I mentioned yet that he's been an ass?)

Ummmmm......no. Your ex needs to bring $2138.75 to the closing table, just like you need to bring $2138.75 to the closing table. (Since he is still on the deed, he needs to sign both the sales agreement and the closing papers, right? So, it's not like he won't know about it.)

From your first post (emphasis added): The terms of my divorce agreement was that we would sell the house ASAP and split the proceeds (or costs) in half. In the meanwhile, the ex is sending me $325 a month, and I am left paying the rest ($415 + water bill + electric bill + heating bill).

You have already been subsidizing your ex by paying $415, while he's only been paying $325 [the utilities are yours since you (or at least your stuff) is occupying the house and he isn't]. That's $540 for May - October.

Why would you continue to subsidize him by paying $2,777.50 while he pays only $1500? That's an additional $1277.50, for a total subsidy of $1,817.50 - ASSUMING that what you need to bring to closing is only $4,277.50.

What have you assumed your loan payoff to be as part of the closing costs? Because your loan payoff isn't going to be just the $92,700 for the current loan balance - you will probably have to pay at least a $60 fee for your mortgage company to prepare a payoff statement, plus you will have to pay interest from the 1st of the month to the closing date, and the P&I portion of the mortgage payment for that month, if it wasn't paid already when the payoff statement was requested.

Since you escrow, if your taxes have not recently been paid by your mortgage servicer (unlikely since Idaho's next tax installment is due Dec 20), you will have to pay the taxes upfront for the portion of the tax year you owned the property. On the flip side, your mortgage servicer will refund your escrow balance to you, but it will probably take 2 - 3 weeks after the closing for this to occur. (You should split this payment, and any homeowner's insurance refund with your ex when you get them.)

I know Hunter is a real estate agent, so he may have factored all of this in - but since many of these details are available only to the title company (not the real estate agent), he may not know enough of the details (especially on things like the loan payoff) to estimate correctly.

AJ

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292144 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/7/2009 8:39 AM
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Libertarians also believe in working within the current system, even if they don't agree with it.

Besides, our primary objection is the use of public funds (tax dollars) to the financial benefit of individuals or corporations. (As opposed to the general defense and welfare of the nation.)


It occurs to me that you might be interested in this article regarding the 10 Best Supreme Court Decisions from a Libertarian Point of View.

http://volokh.com/2009/10/06/the-ten-best-supreme-court-deci...

The comments, not only on Volokh but also on the Division of Labor site are also interesting.

http://divisionoflabour.com/archives/006397.php

Nancy

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Author: electrasmom Big red star, 1000 posts 10+ Year Anniversary! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292146 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/7/2009 9:11 AM
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I must say, though, it seems a bit early in the relationship for co-mingling finances to me - Joel and I dated for 7 months before we moved in together, we have been living together for 3 years and 9 months next week, and we still don't co-mingle our finances, except for specific purchases that we talk about. When I pay the car insurance, he pays me back. It's my turn to pay when we go out to dinner tonight. I closed on the sale of a house last week, and none of the money I got went to Joel. When he sells his house, I won't be getting any of the money from him. If we were to get married (probably won't happen except for insurance or social security reasons) I doubt we would co-mingle our finances much more than we do now. Hava and her SO have been together for, what, 6 months?


Heck, DH and I have been married for 11 yrs (together for 14 yrs) and the only items with both of our names on it is our house and my car. (his car was bought before we married). All of our CCs, bank accounts, etc. are in each of our own names.

electrasmom

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Author: LaraAmber Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292147 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/7/2009 9:34 AM
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First, I'm glad you have an offer on the house. Remember it's an offer not a done deal, so don't jump the gun on anything.

1. Your ex-husband needs to pay HALF on any leftover costs from the house sale and put his half on his own card. STOP subsidizing him. Let go of the guilt already. You aren't earning any cosmic brownie points by paying more then your fair share. He isn't sitting there thinking "well ever time she pays a little more then I do I forgive her a little bit more for leaving me." STOP IT.

2. Hunter still needs to find secondary employment. It doesn't matter what. I'd encourage you to look for a job to replace the library job. Yes, you should stay in school. But I have a feeling the library job is underpaid.

3. You still haven't answered the co-mingling of finances issue. I'd like to firmly here from you "yes, we will keep everything separate".

Thanks for realizing our intentions are only good. I'm being nicer because you're an online stranger. If my best friend in the whole world who I love like a sister starting saying what you wrote in your early posts I'd be shaking her yelling "are you out of your cotton picking mind" until she burst into tears or her head fell off. The internet limits me to typing long paragraphs.

Lara Amber

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292148 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/7/2009 9:45 AM
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You guys won't believe the good news:

Hunter received an offer today for $95,000 for my house.

*Cue fireworks*


I'm glad that everything worked out so well. With everything going on (property here, property there, debts here, debts there, IRS coming down the pike) it'll be good to have one burden off your back.

By the way, I wanted to offer congratulations on your decision to divorce your ex. My oldest niece decided, just last week, that all she was doing for her husband (who also suffers from really horrible depression) would never be enough. There was nothing that was in her power to do that would have helped him. I recognize that it was a very hard decision, and I think it was the right one.

Nancy

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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292150 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/7/2009 11:52 AM
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It's like that old line: I wasn't picking you up, I was picking you out.

And I must say, I have really good taste......

AJ

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292151 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/7/2009 12:01 PM
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GREAT!
You'll also have partial P&I and some other costs - it will be more than you assume, although you will get some back later. Far, far simpler and fairer - not to mention in compliance with your divorce agreement - to split it in 1/2 with your ex. Do NOT set the expectations of $1500 with him. What if closing comes in at $6K, or $8K? Once you tell him he only has to pay $1500 you will have a massive flight on your hands to change things. He needs to pay half. Period. And he gets half of any payment reimbursed from lender. Easy peasy.

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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292152 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/7/2009 12:23 PM
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Bears repeating:

If you trust him and love him enough to take on his debt, then marry him and then take on the debt. If you don't want to do that (and I could understand why you might think it is premature) then I would suggest it is too soon to take on his finances.

Hava,

I would heartily second DM's commentary. Additionally, I would say that until you are legally married, there should be no "WE" in finances. Your mess is your mess. His mess is his mess.

And I hope the fact that Hunter brought home an offer for your house did not encourage him to take his land in the country off the market.

- He still is not paying down any principal on his house (either first mortgage or HELOC).
- His mortgage is due to reset in a year.
- It is not clear that he can get his first mortgage modified because of the huge HELOC.
- He still is not paying his full financial obligations to his ex and his daughter.
- He still has over $8k of debt at 28.99% that is costing him $2400+ a year, plus nearly $4k of debt at 8% that costs another $300 or so a year. (Those two debts alone will eat up nearly half of the $30k you are hoping he will net out of the land sale - probably more than half after you take taxes into account.)
- He suspects (but doesn't know) he owes money to the IRS for his 2008 taxes. The due date for tax payments was April 15, so if he does owe money, he is incurring late payment penalties and interest. If he did not make quarterly estimated tax payments, he may also owe penalties on that. If he is not making quarterly estimated tax payments this year, he needs to start, in order to minimize the penalties.
- He is spending $132 a month on the mortgage for the land.

All in all, he can't afford to keep the land if there actually is some equity in it.

AJ

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292153 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/7/2009 12:39 PM
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<<First, I'm glad you have an offer on the house. Remember it's an offer not a done deal, so don't jump the gun on anything.

>>


That's good advice which you fail to apply in your next sentence:

<< Your ex-husband needs to pay HALF on any leftover costs from the house sale and put his half on his own card. STOP subsidizing him. >>


Nice theory, but if the husband chooses to just sit on his hands and refuse to sign a sales agreement and refuse to put up the money needed to sell the property, very likely no property sale will take place.

You might eventually be able to get a court to require him to sign, but more than likely the deal will have flown before that.

Agreeing to pay the husband's half might be the only way to make the sale go through. That's not right, but it may be a fact of life.



Seattle Pioneer

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292154 of 308484
Subject: Re: The Life and Times of HavaTheFool Date: 10/7/2009 12:45 PM
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