Drama in real life: Foreclosure!

Most of the time, the talk about the housing bubble and the credit crisis and the faltering U.S. economy seem rather abstract to me, as if people were discussing a problem in Canada or Mexico. Or Norway. I've spent the past four years focused on my own financial situation, ignoring the outside world. The national economy often seems remote from my own personal economy.

But there are millions of average people who have been affected by this country's fiscal woes. My little brother, Tony, is one of those average people. He's in dire financial straits.

In 2004, Tony bought a house in Portland for $415,000. In 2006, he got a new job in central Oregon, so he moved his family to Bend. He put the Portland house on the market. He intended to rent a place in Bend until his existing home sold, but then he found a house he liked. He applied for a loan and was approved. He bought the house.

The house in Portland never sold.

For the past two years, Tony has been making $5200 in mortgage payments every month. Or, lately, not making the payments. He ran out of money long ago. Tony agreed to let me interview him yesterday in order to share his story with GRS readers.

Note: Tony knows he made some poor choices, and he blames himself for his current problems. He's candid that he should have been paying more attention to his finances. But looking back to 2006, he doesn't understand why the bank approved him for the mortgage on the Bend house before the one in Portland sold. It seems like the bank was betting on that sale, too.

J.D.: How are things going?

Tony: What do you mean? They're not going very well. The house in Bend was foreclosed on yesterday. The one in Portland is for sale again.

J.D.: You weren't able to sell the house over there, huh?

Tony: No. Plus we consulted with a lawyer, and he said we should just give it back because of the tax ramifications.

J.D.: I don't understand.

Tony: Well, it would be a short sale. To give you an idea, we put the house up for sale at $299,000, and we paid $380,000 for it. So what you do is you do a short sale — the mortgage company has to agree to it — but the government considers the difference as money that was given to you. It's taxable income.

J.D.: When did you buy the house in Bend?

Tony: It cost $380,000 in September 2006.

J.D.: And how much was the mortgage?

Tony: Roughly $2400 a month. There were two mortgages.

J.D.: When the bank forecloses on it, what happens?

Tony: We've been out of the house for a while. We're living with my wife's parents. From what my lawyer says, there's nothing the bank can do to us. They'll essentially just take the house and then auction it off at the courthouse steps. There's no other ramifications to me. There are several houses that are being foreclosed on in our neighborhood. One that went to foreclosure and was auctioned off sold for $230,000.

J.D.: Was it the same kind of house that would have gone for $380,000 in 2006?

Tony: Yeah. It's the exact same house as ours except it has a two-car garage and ours was a three-car garage.

J.D.: Holy cats. That's like a 40% drop in two years!

Tony: I know.

Note: In 2006, Bend had one of the hottest real-estate markets in the country. Now it's fallen on hard times. Again, most of Tony's problems come from the fact that he gambled by not selling his first house before buying a second one. Back then, this didn't seem like it would be a problem.

J.D.: You wouldn't have been in such a bad situation except you haven't been able to sell your Portland house, right?

Tony: Yes.

J.D.: And how much did you buy that house for?

Tony: We bought it for $415,000 at the end of 2004. We still owe the bank $367,000. We're paying $2800 a month.

J.D.: And you tried to put it on the market when you moved to Bend, right?

Tony: Well, on the advice of our Realtor, we put it on the market for $585,000, because that's what she said that it would go for.

J.D.: And that was in the summer of 2006?

Tony: Yes. Then after the house had been on the market for a month, we got an offer at $500,000.

J.D.: And you turned that down?

Tony: It was turned down but not by me. The Realtor got it as a verbal offer and said that she told them “no” because she could get more for it. She informed us that they had made a verbal offer a week after they made it. Then last September we almost had it sold at $480,000 but the deal fell through because it was based on whether or not the couple sold their house. Guess what didn't happen?

J.D. And that's when you started renting the house. [For the past year, Tony has been renting the house to a friend, trying to defray some of the mortgage expense.] What do you have it on the market for now?

Tony: We have it on the market for $499,000. We just put it on the market last weekend, but we already have somebody interested in it.

J.D.: If that sells, does it get you out of your bind?

Tony: It helps, but it doesn't necessarily get us out of the bind. Some of that money would go to the Realtor. Plus we owe money to other people. [Tony borrowed money from various family members.] And then there are our normal bills, which are behind. So even if we sell, it doesn't solve the problem, but it does help.

Note: You know how the power of compound interest can help you save? Well, it works in reverse too. People in credit card debt understand that. Tony's learning that the damage from mistakes can compound, too. What started as a small problem — needing to sell the Portland house — has mushroomed out of control. Things just keep getting worse…

J.D.: A couple months ago, you mentioned that you're doing some sort of consumer credit counseling or something. How does that work?

Tony: Not very well. It's not a debt consolidation place, but it kind of is. These guys are for profit. They piss me off. They told me they settled a Bank of America account for me, but I keep getting letters from Bank of America saying the account is not settled. So this place drafts money out of my account every month to pay the people we owe — it's kind of forced savings, in a sense — but I won't let them draft any more until they give me written proof that they've settled with Bank of America.

You know, this is my own frickin' fault for not paying attention to exactly what was going on. I want to repay everyone because it's my debt, but at the same time, it's so frickin' huge, I don't know how I'll ever do that.

J.D.: Why do you think you got in debt? Do you think it's because of the house? Or do you think it's other stuff?

Tony: There are several reasons that got us into debt. The first time we put the house on the market in Portland, we used credit cards to fix it up. We put a fence on it and that sort of stuff. The move here probably cost us $8,000. The idea was when we the house sold, that'd be paid back right away. The house never sold. Then we got ourselves into a situation where we had double mortgages.

J.D.: Oh yeah. What was the mortgage on the Portland house?

Tony: $2800. You do the math there. So, we had double mortgages, and we're doing whatever we can to pay them both, praying that the house in Portland will sell. So we borrow from people. Slowly but surely, the amount we can beg, borrow, or steal keeps dwindling. I finally said, “This is is not going to work. We've got to do something different.”

J.D.: Were you having problems with debt before?

Tony: Before we moved from Portland? No. We were actually okay. We were financially okay. Did we have credit card debt? Yeah. Was it manageable? Yeah. Could we make all our monthly payments? Yes. Did we have extra spending money after we made our monthly payments? Yes. We weren't paying off our debt extremely fast, but we weren't building debt. You know what I mean?

J.D.: To me, you guys typify all the problems that are going on with the economy at large. You guys are the ones we know most being affected by it. Do you pay attention to the economic news at all?

Tony: Hell yeah — every day!

J.D.: What do you think about it?

Tony: I was just talking about this with my wife the other day. I don't know if it's because of what I've been going through or what, but my personal opinion is that we're not looking at a recession. We're looking at a depression.

J.D.: And what's going to happen for you guys if there is a depression?

Tony: To be honest with you, I have no clue. I'm scared.

My heart aches for my little brother. Obviously, Tony is not a “victim” — I don't think he'd claim to be — but he is one very real part of the ongoing credit crisis. To me, he's the average American. He wasn't pro-active. He was eager to have a new house, so he bought one before the old house sold. He didn't have anything in savings, so he took a risk by financing his move on credit. Now, along with many others, he's paying the price. I just hope he comes through this okay. Photo by respres.

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JerichoHill
JerichoHill
11 years ago

One thing that strikes me is that Tony could’ve avoided alot of this heartache had his realtor not held out for a better offer when she had one.
Yet another reason to distrust the incentives and advice of realtors

Tim
Tim
11 years ago

I’m mixed on this one. I think you are giving your brother a slight pass because he is family, especially since you make a contradictory statement “Tony knows he made some poor choices, and he blames himself for his current problems…But looking back to 2006, he doesn’t understand why the bank approved him for the mortgage on the Bend house before the one in Portland sold.” Being approved and actually taking out the loan when you can’t afford two mortgages at the same time are two different things. Although you made a fine print summation, which I thought was good,… Read more »

interwebhunt
interwebhunt
11 years ago

Sadly this is happening all over the country to good people who just wanted to participate in the American dream. It was proliferated by money hungry brokers who made deals that they never would have made in the late ’80s or ’90s when the market was more sluggish. Greed trumps all, always has, probably always will in a capitalist system.

Jen
Jen
11 years ago

You may want to suggest to your brother that he cut ties with this settlement company. My experience with them, when I worked in the collections industry, is that they take money from their clients, take a hefty percentage off the top, and then allow all the accounts to charge off so as to negotiate a settlement. Often the settlements offered are in the range of 10 to 15 cents on the dollar, which no creditor will accept until the debt is, say, six years old and has been sold multiple times – each time reappearing on his credit report… Read more »

J.D.
J.D.
11 years ago

Tim wrote: I’m mixed on this one. I think you are giving your brother a slight pass because he is family. Yeah, I’m aware of this danger. Kris and I talked about this a lot as I was prepping this post. I mean, I know that Tony did some dumb things (he knows it, too), but at the same time I feel sorry for him, especially because he’s family. Though it’s not reflected very well in the post, I believe he’s reached a point where he’s ready to stop letting other people (the bank, the realtor, the credit counseling place)… Read more »

Kate
Kate
11 years ago

Thank you, Tony, for being brave and sharing a hard story like that.

April
April
11 years ago

I know I harp on personal responsibility a lot, but it’s not because I don’t think the banks deserve some blame or that they aren’t predatory, it’s only because there will always be bad business practices and scams out there, and the only way an individual can protect themselves is to get informed and make good choices. Even if the government regulated, say, credit card companies, there would just be some other industry preying on consumers. Tony’s situation is very unfortunate. Tony–It might be worth exploring whether you can make a case against the realtor who didn’t present the offer… Read more »

FMF
FMF
11 years ago

A few thoughts: 1. Sad. I’m sorry for him. 2. Yes, he contributed to much of his own pain. But there are many people who did “everything right” (in that they simply went along with prevailing market thoughts at the time) and are getting burned. 3. This crisis is hitting close to home for me too. Not a brother, but close friends are leaving their home for the bank. 4. Isn’t there some sort of legal action that can be taken against the realtor? Doesn’t a realtor HAVE to share any offer with a seller? 5. “Holy cats”? Is that… Read more »

Lilblueyes
Lilblueyes
11 years ago

I believe a combination – of mortgage company greed AND lack of personal responsibility – is to blame for the current financial crisis / meltdown. I too have a family story to tell. In March 2004 I bought a single family house with my partner, and we had 2 townhouses to sell. We bought the new house before 1 of the old houses was sold … and took an expensive 10% mortgage out on the new one until we could re-finance after the 2nd townhouse sold. Luckily it sold quickly, we re-financed the new house on a 5 3/8% mortgage.… Read more »

J.D.
J.D.
11 years ago

@FMF Though I did clean up some of the language for this post (I’m no angel), I did, indeed, say “Holy cats”. Perhaps I shouldn’t admit it, but I say “holy cats” all the time… 🙂 @Lilblueeyes I’ve been so focused on Tony’s story that I forgot I had one of my own. Except with mine, the numbers are much smaller. In 2004, we bought this house for $280,000 before we sold our existing home (on which the remaining mortgage was $70,000 or $90,000 — cannot remember off the top of my head). I financed a lot of the move… Read more »

April
April
11 years ago

Holy cats. Heh.

No Debt Plan
No Debt Plan
11 years ago

Wow, sorry to hear about his problems… the thought of trying to move from our current house, find two new jobs, sell our house, and buy a new one all at the same time is terrifying.

But I can see how in the past it would be seen as “oh yea, no problem!”

I wonder if he has any legal grounds with the realtor for not bringing the offer to them? Idiotic realtor.

Conrad
Conrad
11 years ago

A $415,000 mortgage (2004 Portland or elsewhere) is heavy, heavy debt. Think about it, his mortgage payment alone was $2800 per month. If your brother followed the golden rule of 33% NET regarding home loans, then he would need to be making $150,000+ year income to be comfortable leaving about $5900 per month for other expenses. Was his income even close to this? If not, then his first mistake was living beyond his means, even with the first home in Portland!

J.D.
J.D.
11 years ago

You know, one question I should have asked Tony is: “Would you have taken the $500,000 offer if the Realtor had told you about it?” I mean now he thinks he would have, but that’s with two years of hindsight. What would he have done back then? What did he do back then?

Steven
Steven
11 years ago

I fail to see how it’s possible for so many people (on such a large scale) to end up foreclosing on their home around the same time within the last year. Year after year for decades, people have been paying their mortgage as usual. Job market has been bad before. If people were to lose their job and were unable to pay their mortgage, shouldn’t there have been a steady trend of foreclosures instead of everything happening within the last year? That said, mortgage don’t change that much (especially if you’re on a 30-yr fix) or even if people who… Read more »

Until Debt Do US Part
Until Debt Do US Part
11 years ago

I admire both your and your brother’s honesty. It gives a real feel for the pain that people are going through. I have to agree that most of us are so wrapped up in our own little worlds with our own economies (as you put it) to ever notice how the people around us are coping. Sure Tony is not free from responsibility here – but I don’t think there is a whole lot to be gained by engaging in self flagellation. Hindsight is 20:20 and we would all be millionaires if we could see into the future. I try… Read more »

Seth
Seth
11 years ago

The only people I feel bad for are those who were responsible enough to sit on the sidelines during this bubble. Now they get to pay to save the banks, cover everyone else’s bad mortgage and, if they’re lucky, help to maintain propped up housing prices so they still can’t afford a house while the irresponsible keep their gains.

Kevin Wright
Kevin Wright
11 years ago

Wow, it is amazing how banks were just throwing money around. This also shows how we are all just impatient. That is why the title of this blog is so fitting, Get Rich Slowly.

Jimbo
Jimbo
11 years ago

I hope you’re helping your brother in some way – there is NOTHING in life more important than family, especially your immediate family.

Nick
Nick
11 years ago

Thank you for sharing Tony’s story with us. I hope he makes it thru this and winds up in decent financial shape at the end (with a brother like you helping, I don’t see how he couldn’t).

It also hardens my resolve to stay out of the real estate market. Right now (single, no kids), renting is so much cheaper and if I want to move I don’t have to worry about selling a house.

I also agree with Seth tho, those like me that have stayed on the sidelines will end up footing part of this bill.

Karen Putz
Karen Putz
11 years ago

I have a friend in Chicago who is sitting on two mortgages as well. They purchased a house about a year ago and hoped that their other house would sell quickly since it was in a prime area. I’m not sure how much longer they can hold out. They’re now looking to rent the house, but the house next to them is up for rent too and no takers. My husband and I made that same gambled four years ago when the market was hot and we sold our house by the second month. I would not take that gamble… Read more »

Troy
Troy
11 years ago

Hey JD Tough situation for your little brother. I have a little brother too, and here is exactly what I would tell him if he were your brother. LOWER THE PRICE!!! There is a reason it has taken two years. If I read correctly, they forclosed on one (Bend), yet will not lower their price on the other (Portland) even though they have $132,000 of equity. Doesn’t make sense. He states they owe $367,000 on the Portland house (paying $2800 month) yet they have the house for sale for $499,000. While waiting their other house went into forclosure. Drop the… Read more »

Amy
Amy
11 years ago

The reality is that this is a common situation. Whether you are “giving him a pass” or not, everyone makes mistakes. It reminds me of congress and the bailout issue. This is not the time to try and place blame. That’s for later, when the crisis has passed. I’m sure that there are many things that your brother would do differently now. It’s very sad, and I can see how it happens. Thank you for posting this.

Eric
Eric
11 years ago

Tony: Your real estate agent owes you fiduciary duties, and by failing to tell you she received an offer it looks like she breached those duties. And I bet she and/or her brokerage have insurance that would kick in on a breach like this. My advice — go find a lawyer and kick-start that process. Best of luck to you.

Michael in TN
Michael in TN
11 years ago

FYI – but Congress passed and Bush signed into law HR3648 at the end of 2007.

Basically – the ‘phantom income’ from short sales doesn’t count as income anymore.

http://activerain.com/blogsview/317772/Great-News-IRS-Revision

partgypsy
partgypsy
11 years ago

J.D., maybe you can do a post about helping or not helping family members financially. I am in the same boat, except worse where almost all of my family members are in bad financial situations. Although I would be willing to have my mother or father move in with me if they needed a place to live, what they all want is money. I have a job, but work hard for my money and use it to support my own family. I have been saying no (other than cash in leiu of gifts) but they want more than that. How… Read more »

downwithdebt
downwithdebt
11 years ago

There are no winners here. The only winners maybe are those who sold there homes in 2004 for overinflated prices. I live in a somewhat rural area, and I see a lot of new homes that have sat empty since 2005. The area I live in has the average wage of around 10-12 dollars and hour, and they are asking 189-275 thousand for these homes. Most of these homes are owned by speculating builders or real estate agents. In my town the average wage earner is at 11 dollars and hour which equates to 22,800 a year. Even if two… Read more »

kj
kj
11 years ago

Troy – I’m with you completely. To me, if there are interested people when the price is well north of what you owe, and even of what you paid, the housing market there must be substantially better than here. I live in Michigan and know of quite a few people whose homes are either on the market currently or sold in the last couple years. My husband and I even asked our realter to tell us what she’d list our house if we decided to sell (which we didn’t). Here, I don’t know of a single person who lists their… Read more »

Moneyblogga
Moneyblogga
11 years ago

If Tony cannot work out a workable loan modification with his present mortgage company, let the house go. Let them both go. File bankruptcy as well and get rid of all other debt while he’s at it. Then start over again. With two foreclosures, Tony might as well file BK and start out with a clean slate. That’s what I’m going to have to do myself. It’s pretty much cut and dried. I can’t afford to keep paying greedy lenders exorbitant mortgage payments at the expense of everything else. I should never have been approved for the mortgages in the… Read more »

Alex
Alex
11 years ago

I moved to Phoenix in 2006 and bought a condo. I was fresh out of college and accepted a job making mid $30k’s. My realtor was showing me around town when she goes “Good news! I saw you were approved for up to a $500k loan! Should we start look at homes in the mid $400’s?”. I nearly fell out of my chair. I knew damn well I could only buy a $200k condo(I was putting 20% down).

Just goes to show you how the US got in this predicament in the first place.

ThatGuy
ThatGuy
11 years ago

A lot of people do not understand how mortgages work, period. People always get upset when they take their monthly mortgage payment multiply it by 360 and realize that it is 2-3x the cost of their house. I suspect that the world would be better off, if people knew more information about the technical side of debt and interest.

-ThatGuy

Betsy
Betsy
11 years ago

“Tony: No. Plus we consulted with a lawyer, and he said we should just give it back because of the tax ramifications.” Two things. 1. Your brother’s lawyer gave him lousy advice: “Tony: Well, it would be a short sale. To give you an idea, we put the house up for sale at $299,000, and we paid $380,000 for it. So what you do is you do a short sale – the mortgage company has to agree to it – but the government considers the difference as money that was given to you. It’s taxable income.” Yes, it is taxable… Read more »

Pamela
Pamela
11 years ago

“Tony: Your real estate agent owes you fiduciary duties, and by failing to tell you she received an offer it looks like she breached those duties. And I bet she and/or her brokerage have insurance that would kick in on a breach like this. My advice – go find a lawyer and kick-start that process. Best of luck to you.” Eric is right. I don’t know what the code is like in the states, but in Canada it is against the realtor code of ethics to NOT disclose every offer received to your client. Your realtor may have done something… Read more »

PDXgirl
PDXgirl
11 years ago

Sorry I skipped some comments here because I really wanted to say this before I have to actually start working (dumb)

Tell your brother, if he has not already surrendered his house to the bank, to negotiate a “Cash for Keys” settlement with the lender/mortgage servicer (and if the servicer is Wilshire Credit have him email me, I know most of their foreclosure team).

It won’t be a lot, but the basic premise is that if you leave your house vacant and in occupiable condition they’ll give you $1-2K for saving them the trouble of trash outs/repairs/eviction proceedings.

bamboozlde
bamboozlde
11 years ago

“I believe he’s reached a point where he’s ready to stop letting other people (the bank, the realtor, the credit counseling place) tell him what he can and cannot do, and simply decide for himself.”

good! that’s one of the most important lessons he can learn.

Dave
Dave
11 years ago

First, best wishes to Tony and thanks for sharing his story. I find myself in similar, but not so dire circumstances. We found our dream house, and the market was still hot, so we put our house up for sale and made an offer, with a contingency on the sale of our house. So far, so good. Then the market started to slip. All thetalking heads made it seem like just a temporary setback, we had plenty of equity and could afford to take a cut in our asking price, so we waited. The market collapsed (we’re in southern CA).… Read more »

escapee
escapee
11 years ago

this story about your brother made me really sad.

even when people make dumb decisions, I think that it is very important that we all have compassion for our fellow human beings at this time, especially when it’s someone you know and care about.

most people reading this blog are the lucky ones- we know financial basics that a lot of (good) people out there just don’t have a good grasp upon. it’s important that we try to lead by example and to hold out a helping hand if we are able to.

Klug
Klug
11 years ago

As an average American, it grates a little to hear people like your brother described as the average American, even though you’re probably right.

K
K
11 years ago

I think we’ve passed the peak of the permanent house. People are moving more for jobs or just for better job prospects. People also move in search of the cheaper property costs, etc. The days of being able to expect you’ll work for the same company for 30 years is gone, and with it, the expectation that you’ll be living in the same place for 30 years will soon follow if it hasn’t already. Somehow the Donna Reed / Pleasantville suburban ideal is still embedded in much of the American psyche. Clearly house-hopping is no longer a reasonable expectation (if… Read more »

Moneymonk
Moneymonk
11 years ago

At least he is a MAN about and fessing up to his own mishaps and not blaming others.

Rule 1 don’t buy a new house until the other one has sold.

We learn from our mistakes.

Two years from now he will be alright!

From Scandinavia
From Scandinavia
11 years ago

Being an International reader I just have to leave a comment on this mortgage-related issue. You Americans should consider yourself lucky that a foreclosure on a non-recourse debt means that the bank can’t claim the value from other assets and the debt is considered paid in full even if the sale price is less than the remaining mortgage. At least in Scandinavia (and I suspect much of Europe as well) this is not the case. Over here if the foreclosure doesn’t bring in enough revenue to pay for the mortgage the borrower is still required to pay the mortgage in… Read more »

Kent @ The Financial Philosopher
Kent @ The Financial Philosopher
11 years ago

For lesson’s sake, this is not the depression, where almost 10,000 commercial banks disappeared from 1929 to 1934, we had 23% unemployment, and people were standing in line for a loaf of bread. In this current “financial crisis,” we’ve had about 15 bank failures, around 6% unemployment, and no breadlines I am aware of. Perception is reality but they have inverse relationships: Tony perceived times were “great” two years ago but “real risk” was actually high. Now Tony perceives times are terrible, but “real risk” for financial markets is much lower now than it was two years ago, and even… Read more »

Barb1954
Barb1954
11 years ago

Alex, the notion that a mid-30s income means one can afford a $200,000 condo is ridiculous. We’ve been in our house for 19 years. At the time we were buying, the rule of thumb was that you can afford a house that is no more than 2.5 times your gross income. When did that change? Interst rates have been so low the last few years so perhaps that has changed the thinking. When we bought, the loan rate for a 30-year fixed was 9.75% (our current 10-year mortgage is only 4.625%). On a combined gross income of $56,400 we could… Read more »

The Tim
The Tim
11 years ago

The saddest thing about this whole mess is how preventable it was.

If only people had been listening to the “whackos” out there that were trying to warn everyone of the dangers of the housing bubble back in 2005 and 2006, we could have avoided the problem entirely.

typome
typome
11 years ago

J.D., you and the other personal bloggers out there should totally have courses, maybe at a university, maybe even for free, to teach people about personal finances! It’s tough looking backwards at people’s problems and fixing what’s already done, but maybe doing some preventative courses would steer the next generation of adults away from poor money choices, or at least educate them better. It’s unfortunate that people who have done all the right things (saving, staying out of debt, living within your means, etc.) still end up getting screwed over, either by paying for others’ mistakes, or having lower savings… Read more »

Mike
Mike
11 years ago

Economic Depressions: Their Cause and Cure, by Murray N. Rothbard.

http://mises.org/story/3127

A lengthy, but valuable read.

Jan Dillaha
Jan Dillaha
11 years ago

One of the biggest lies we tell ourselves is that we can afford something just because we can swing the monthly payment. I feel for your brother, but this is entirely his fault and he can work his way out. He signed for the loans they SOLD him. Mortgage brokers are sales people. If they don’t close a deal they don’t get paid. He could have chosen to get advice from someone like a CPA who would have painted this dark picture for him BEFORE he did it. When we decided to move we put our house up for sale.… Read more »

Lacy
Lacy
11 years ago

1. I used to work for a mortgage lender until they left the market (it was a new market for them) when the mortgage bubble burst. What some don’t realize when things like a forclosure happens, it stays on your credit report for years, severely limiting your ability to purchase a house in the future. Things like “bridge loans”, or financing a house when the other hasn’t sold is not a good idea unless you can carry both for an extended period of time! The lending institutions generally try to keep your mortgage debt under 45% of your income or… Read more »

Crystal
Crystal
11 years ago

I can relate completely to your brother’s feelings of frustration, anxiety and overwhelming stress. In 2006 we bought land as an investment property. Real estate was booming around here. We were making more money than we had ever dreamed of and had been doing so for a few solid years. A year after buying the land, my husbands company “restructured” and our yearly pay was cut by $60,000! That made things tougher, but it was okay because we had an amazing investment that gave us a huge monthly return. We used that to pay this loan on the land. We… Read more »

Laura
Laura
11 years ago

I’m with FHF (#8) – I think the realtor bears some responsibility – it seems she was trying to maximize her commission at the expense of your brother’s best interest.

I don’t know that it would do him any good, but he might look into it.

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