Just wanted to stop back in to let everyone know I just made a lowball offer on 15 acres of land.
(10 acres have planted corn, and 5 acres of forest). My offer was accepted and I am closing in August. The land is about 7 miles west of my dads lake house on Lake Huron.
I now have a great investment, and a great place to bring friends to hunt deer in the fall.
Most people are financially destitute after a divorce, but my net worth just keeps growing! :)
Its funny what you can do when you have the power to take risks and chase your dreams.
See you next year when I get the new house to add to my growing real estate empire.
Housing Fear may be over for most Americans....The housing market will slowly start to recover in the years to come.
For me however, I have had a heartbreaking 2011, and I am going to have a very rough year ahead of me as I begin my year long internship at a local hospital.
I still own a condo that appraised for 60,000 (it is really only worth 35,000) and I paid 87,000 dollars. Do the math, but either way you look at it I have a huge paper loss right now on my books.
I am still trapped in this place, and I have to much skin in the game to walk away at this point.
In one year I should be making enough money where I can take advantage of lower interest rates, and lower housing prices and purchase a second home. I will have missed the very bottom of the market by next summer, however, I think I can get in before a full recovery has taken place and still get a good deal.
My total mortgage payment, taxes, insurance, and association fee on the condo are roughly equivalent (maybe even a little lower) then what comparable units are renting for in my complex. So I think I can rent this place out and be in a good position. The 15 year mortgage helps because a large percentage of the potential rent money will be going to equity.
While I am still currently trapped in my condo, and "Housing Fear" continues... I see a bright future beginning next summer for me.
I have accomplished pretty much everything I wanted to do with this blog...
...almost all of my economic predictions have come true (read 2007/2008 posts for a good laugh, and maybe even a little bit of awe of how spot on I was). I feel like I entertained readers, provided some information and insight and maybe even brought some joy to some people during a tough economic time.
The truth is I did this for me....It felt good to vent some steam, and share my thoughts with over 100,000 people during the past 5 years.
Next summer when I start my house search, and rent this place, I will be sure to come back and give everyone an update, and then make an official end to my "Housing Fear" Journey.
Thanks for reading my blog, and I want you to know that if you guys never came, I would not have had the motivation to share my story with all of you.
I want to leave you with the video below that I watched back in September of 2007 that inspired me to write this blog. Thanks to Keith@HousingPanic, all the bubble bloggers, and everyone who saw this coming way before the media did in October of 2008....Enjoy...
My loan has came out of underwriting and I have been granted a final approval for my Harp 2.0 refinance. I am scheduled to close early next week. I will have a 3.375% interest rate on a 15 year mortgage. This is a really great thing because even though my mortgage payment is staying nearly the same as it is currently on my 30 year mortgage. I am taking years off my mortgage, saving tens of thousands of dollars in interest, and I believe I can have this house paid off in 5 years due to the fact my income is going to double next year.
I lost basically everything that really mattered to me last year, but it is nice to have a fresh start and have something good happen for once. It is also good to see people rewarded who did the responsible, and the right thing, instead of rewarding the deadbeats and flippers.
I began this Harp 2.0 process back in October 2011 when I first heard about it, and it has taken 8 months to get to this point.
Wells Fargo was giving me one last fight on the insurance I had on my condo but now I finally have that resolved, I have met all of the underwriters conditions, and my file is now ready to be sent in for final approval on the Harp 2.0 Refinance.
Hopefully this gets back in time to close and fund by June 16th so I don't have to make an additional mortgage payment.
"With the exception of Miami and Las Vegas, there are not
enough condos to go around anymore because that's all anybody can afford
now if they want to buy or even rent.
I guess all the landlords, specu-vestors, and foreign money bags will
be buying the decent houses while the rest of us slave away at Target
with 100k in student loans and dream of condo living by the airport."
My appraisal is in for my Harp 2.0 refinance and it came in at $60,000 dollars. This was much higher than I expected and I am thrilled because I am now under 125% LTV and am all set for final approval on my refinance.
Due to the good news my quoted mortgage rate is dropping from 3.875% to a new rate of 3.350%. This is over 15 years. And I am now in good financial position to have this condo paid off in the next 5 years.
Final outcome of the Harp 2.0 Program for me....
6.50% 30 year mortgage reduced to a 3.35% 15 year mortgage.
Of course, the loan is not closed yet so anything can happen. But hopefully this all goes through successfully.
My monthly payment will be roughly the same but I will now have this place paid off 10 years earlier then I thought (If no extra payments are made). And I get to refinance the house in my name only which is good from a pride standpoint.
I will keep the blog updated with further details as they occur.
In this article written in 2008 I discussed how the price per square foot was over inflated in most area's of the country. I stated that 90-100 dollars was a good price per square foot for the average single family home and that prices would drop in the next 4 years to reflect that.
2008 DATA REVISTED
Metro Areas: Most Expensive to Least Expensive (Price Per Square Foot)
Rank
Metro Area
PPSF
Year-Over-Year Price Change
1
San Jose, CA
$418.54
-8.8%
2
San Francisco, CA
$367.28
-13.3%
3
Los Angeles, CA
$325.42
-16.6%
4
New York, NY
$292.07
2.0%
5
San Diego, CA
$264.17
-21.2%
6
Washington D.C
$214.07
-8.7%
7
Seattle, WA
$210.20
-1.4%
8
Boston, MA
$207.39
-9.0%
9
Miami, FL
$176.02
-14.4%
10
Chicago, IL
$171.78
-3.2%
11
Sacramento, CA
$165.66
-27.8%
12
Philadelphia, PA
$148.05
-0.9%
13
Minneapolis, MN
$143.34
-7.2%
14
Las Vegas, NV
$136.61
-25.4%
15
Phoenix, AZ
$135.74
-14.6%
16
Denver, CO
$127.71
-9.1%
17
Tampa, FL
$117.08
-15.6%
18
Jacksonville, FL
$113.80
-3.9%
19
Milwaukee, WI
$105.80
-0.8%
20
St Louis, MO
$105.66
-3.0%
21
Charlotte, NC
$95.54
3.9%
22
Detroit, MI
$94.79
-13.2%
23
Columbus, OH
$91.63
-2.4%
24
Atlanta, GA
$91.41
-9.2%
25
Cleveland, OH
$84.91
-6.1%
I found some new data and was surprised to see what the current price per square foot is now in 2012.
As you can see,
As I predicted most of the country with the exception of NYC and California has dropped below the 100 dollar per square foot threshold that I stated indicated where housing should be in terms of inflation. However, I feel that when you look at places like Ohio/Michigan for example you can see that some area's are selling for 60 dollars a square foot now which is far below where prices should be historically.
In most places the "housing crash" simply took house prices down to normal...Florida and Phoenix for example now have a healthy real estate market in terms of affordability and price per square foot just as I predicted would happen in 2008.
The key though...Is that the industrial Midwest has crashed to 1980's level prices, and based on my analysis they are a screaming buy at these levels. Purchasing a house in Ohio or Michigan for 60 dollars a square foot almost guarantees you will make a 30 dollars per square foot profit when prices return back to the historical average adjusted for inflation (IE 1999 Prices).
A 1000 sqft house in Michigan now lists for about 65000, In a normal market this house would sell for 90000. That is a 25000 dollar projected profit. And remember that this profit is not based on another housing bubble occurring (2005), it is simply based on the real estate market coming back from the grave and returning to (1999) prices.
Detroit house prices will return to the magical 90-100 dollars per sq foot price where they should be. And those who are in the financial position to buy a house now, at about 40% off their regular price, will be glad they did when this occurs.
I have received a "conditional" approval from the mortgage underwriter. I have the appraiser coming out here tomorrow to appraise my condo.
I swear to you that if this does not work out, and they somehow try to screw with me, I will never, ever, do any banking with Wells Fargo ever again for the rest of my years on this earth.
(And I will refinance my mortgage with another lender, no matter what the closing costs, just out of spite. They will not continue collecting 6.5% interest on me... This I promise.)
My mortgage was initially approved using the computer underwriter. My loan has been sent to a human underwriter to look at to see if it is 100% approved, and then to get a commitment to lend letter. It is nice of my mortgage broker to make sure that I get a 100% concrete approval before he charges me for the appraisal fee.
I will let you all know when I get that final approval letter, and the results of my appraisal when that occurs.
Why was my rate locked in at 3.875% for a 15 year mortgage when rates are around 3.00%?
Unfortunately if your house is more than 125% LTV you have to pay a premium on your mortgage rate with the Harp 2.0 program due to the higher risk involved in refinancing such an underwater home. I don't mind because 3.875% still beats 6.500% any day.
Hopefully if my condo does come in at 124% LTV during the appraisal my mortgage rate will drop even lower at closing. I highly doubt my appraisal will be that favorable but we will see what happens.
Mortgage guy called and said that Wells Fargo edited their DU Software to allow for unlimited LTV. I went into the office today and I was approved at unlimited LTV.
I decided to go with a 15 year mortgage refinance, and my rate was locked in at 3.875%. I am currently paying 6.50% on a 30 year mortgage so my new monthly payment is roughly the same as my current 30 year payment. I am also taking my mom off the mortgage, which is worth its weight in gold knowing that the condo is in my name only, and that she is no longer responsible for it.
I decided to go with the 15 year mortgage because I am shaving 10 years off my current mortgage, and 15 years off what would have been a 30 year refinance. I am saving myself thousands of dollars in interest, and paying down principal at a much faster rate.
I think I am scheduled to close on this loan around May 15th. I will keep you updated.
As many of you know who have read this blog since the start I paid about 84,000 dollars for a 1 bedroom condo that is now worth about 30,000 in the economically depressed Michigan Market.
Luckily my month payment on the 84,0000 (I put 20% down) even with a 6.5% interest rate is roughly equal to what month rents are in my area.
I found a renter who wants to sign a 2-year lease on my condo.
I have also found 3 bedroom houses for sale for $60,000 that at one time were selling for 120-150,000 dollars.
The new plan is to get a mortgage for one of these new places and let the renter rent my old condo at a "break even" rate. I am going in to sign the application papers today for a mortgage.
Let me start with some background about my situation.
I have never missed a payment or been late on a payment. My home is owned by Fannie Mae. I originally put a 20% down payment on my Home. I have had the same Job since 2008. I have a 770 median credit score. Wells Fargo services my current mortgage.
My application for Harp 2.0 was rejected by Wells Fargo because I am too "High Risk" due to how underwater my home is. LTV is too high!
The whole purpose of Harp 2.0 was to finance people who did the right thing but were underwater for no fault of their own. Wells Fargo is criminal. They are ignoring the government guidelines and refusing to refinance Harp 2.0 loans with a LTV more then 115%. That is not even as good as Harp 1.0. (which they would only refinance up to 105%).
Even if I would have have been refinanced I would have had to pay a 5% interest rate when rates were hovering in the low 4% range due to how underwater my home was (about 170%)
This whole thing is criminal, and ridiculous. They do not want to refinance me because they are making money off me already and do not want to lower their profits.
Why even claim to participate in the program if you really are not following any of the guidelines?
I met with the mortgage broker....I do have to pay 370 dollars for an appraisal fee :(.
Because I told him I think my house is more then 125% underwater my interest rate will be a whooping 5.0%. He says if my appraisal comes in better, and I am 125% or under then I will have a lower interest rate.
The only reason I am going through with the refinance is 5% is better then the 6.5% I am currently paying, So I still feel like its worth it even though it will take me like 2-3 years to break even on the refinance.
I am starting a clinical internship rotation soon, and I will need the lower mortgage payment so I can work less hours and focus on the very last part of my education.
Harp 2.0 was pretty disappointing because the Banks are not obeying the intent of the program, and are instituting overlays like appraisals when they are not required by Fannie or Freddie. I am a Ron Paul supporter and a Constitutional conservative but you can really understand the occupy wall street movement and their anger to the banks when they screw over people like this just to make a larger profit.
I did the right thing. I put 20% down on my condo, I kept paying my mortgage even though I am 170% underwater (even after the 20% down I am still 170% LTV). And I did not buy more house then I could afford.
Yet they still do everything they can to screw me with appraisal fee's and making me pay a higher risk interest rate because my home is underwater even though that is not the intent of the program, and goes against the federal guidelines. If I cared how underwater I was I would have walked away already...why punish me further when I have proven I am responsible.
Very disappointing but I guess a 1.5% savings is better then nothing.
Tuesday, March 20th I will be meeting with the mortgage broker to fill out my mortgage application and lock my rate. Of course knowing my amazing luck, mortgage rates have been rising the past week. (/Sarcasm)
I will post an update Tuesday night and let you know what happens, and see if I still get screwed having to pay an appraisal.
Just wanted to give you all an update the the Harp 2.0 Financing will be available on March 17th. And I am going to start my mortgage refinance on that date. Hopefully rates stay low for one more month and I will keep you posted.
For many years scum bag realtors have been claiming that the bottom of the housing market has been reached only hoping to boost their sales.
Well folks, on Jan 31st, 2012. I am telling you that in my opinion we have now reached the bottom of the housing market and that prices will only rise from this point forward. Not saying they will rise astronomically but house prices will no longer crash until after the next peak is reached.
Why?
1) The New Harp 2.0 program will give responsible home owners a reason to stay in their home.
2) Foreclosures will no longer be a major anchor on the housing market because most of the foreclosures that were going to happen have occurred already, and Harp 2.0 and other refinancing options being talked about will give responsible home owners who have stuck it out this far a reason to continue doing so.
3) All the people who strategically defaulted back in 2008 have recovered their credit almost to the point where they can actually qualify for a mortgage again. From now on as each month passes more and more of the original losers who created this mess in the first place will now be able to get mortgages again at the lower home prices. I predict that this will be the major factor in driving house prices higher, as all the sub prime borrowers who got foreclosed on will start to feast their greedy eyes on mortgages, and house profits once again.
So everybody...Housing Fear is ending...And Housing Rise is about to begin once again.
Jan 30th, 2012...The Housing Crash has hit Bottom, and it's all uphill from here.
And if you are the girl in the photo...Please email me because I would like to buy you some drinks sometime.
My mortgage guy calls me up yesterday and tells me that if I am still interested he could go forward with the refinance, and he now has all the information he needs.
Wow I thought...This was great news. When I asked him if it was true that there were no fee's with the harp 2.0 mortgage if you refinance to a shorter term he started to play dumb with me and asked "whats harp 2.o". I was kind of flabbergasted because he knew this was the whole purpose of me meeting with him in person 2 different times and what I was waiting for.
Basically he was trying to refinance me with the harp 1.0 mortgage saying I would qualify with that and tried arguing with me that my condo was not more then 125% underwater based on the information he had in his system.
I informed him that My condo was worth 30,000 if I was lucky and I paid 87,000 for it. I also told him I was not going to pay the appraisal fee associated with harp 1.0 or the higher origination fee's.
Basically I told him I was not interested in Harp 1, and I will wait till Harp 2 is out. He said it won't be until March or April, and he would hear more around Feb 1st.
I kind of feel like he was trying to trick me into refinancing into harp 1, even though he knew I wanted harp 2.
Sometimes it sucks being so smart. Hopefully it's not another April Fools Joke.
