Ohhhh, now I get it…
Okay, I’m a little slow on the uptake, it’s true. It seems that the cause of my current financial problem of needing to come up with an extra $13,500 this year and who knows how much more next year originates with our first home loan.
As I’ve said, we got 100% financing. Many people will say we are getting what we deserve by going that route. It does sound a lot shadier than it seemed at the time. At the time, actually, it seemed pretty straightforward. We were tired of throwing away money on renting and started casually looking for a place to buy. We unexpectedly came across this place, only 1.5 miles away from Huz’s work a a quick bus ride to mine. Since we had just started planning to buy and had only meager savings toward that goal, we were offered 100% financing by the mortgage company that was hired by the developer (red flag #1). We had excellent credit and could easily afford the estimated payment as outlined by the mortgage officer. During his lengthy, ahem, counsel with us a first-time buyers, he told us that a tax escrow account was a formality required by the mortgage co, that of course we would pay our own property taxes when we were billed by the county, and that he would simply assign a $50 a month payment toward it to fulfill that obligation on paper (red flag #2). The thought of getting downtown space so close to work for just over $200 per square foot in a booming area seemed like an opportunity that would be foolish to pass up (almost sounded too good to be true, red flag #3). Besides, we knew we would refinance to a more stable loan within a year or two. We did just that. No problems, yay us. Until now.
Our naivete led us to our current situation. We thought we did our due diligence: we took a non-bank-sponsored, first-time homebuyers e-learning course, we read everything we could about the process, we asked tons of questions, and we hired a lawyer who told us that everything looked standard in our contract. We trusted the people we hired to tell us what to do and give us accurate and honest answers when we asked questions. What we did not understand was that our original loan officer factored in the lowest escrow possible only so he could lower the estimated monthly payment enough get our loan approved. He very likely knew we could not afford the actual projected tax escrow that would be required in another year or two by the mortgage company (the banks require almost triple the actual tax amount in many cases to cover themselves). He also knew the banks would not let us pay our own property taxes when billed by the county; typically, you must have 35% of your loan paid off to do that. What did he care of we later defaulted because of a negative escrow amount? He sold our loan within a 60 days. Yay him. He’s a superstar. We suck for not catching it, for not understanding enough.
We are not alone. People all over the place are foreclosing for the same reason. If the market hadn’t taken a dive, we would sell and go about our merry way with lessons learned. We can’t. On this page, we are the #3 case study. So it goes.
There are over 22,000 dead in Myanmar and survivors that are barely that. My sitch is such a silly trifle, isn’t it?
We will manage to work this mortgage shadiness out somehow. Of course, if my employer hadn’t reneged on our tentative teleworking agreement and made me so tremendously uncomfortable during my pregnancy that felt I had to give up on the organization, if our baby hadn’t required emergency medical care when born and NICU care for 10 days after that resulting in tremendous medical bills, and if if if if if if if, this unexpected negative escrow expense and the related fallout would have been no big problem. Ifs can torment a person. I’ll try hard to stay away from them. They don’t actually matter and they certainly don’t help. What matters is that home is wherever the three of us are together.
Have fun with your karma, Michael G.
