Slowly Going Back Into Debt (Update/Trigger Warning #420)

[debthaven]

Shane I was wondering if you are SURE that you want to sell the house, are you sure you won't change your mind, but your post N° 241 addressed that.

I hope the refi goes through quickly.

[shanendoah]

raeoflyte - since I'm going through my credit union for the refi, not really certain how they would hit themselves with an early payoff fee. But it is something to be aware of.

debthaven - So when we were looking at the terms, the 5/5 ARM was 0.1% APR higher, and so I asked C if he would prefer the 5/1 or the 5/5. And we talked about the fact that with the exception of the 0.1% APR difference, it wouldn't really matter unless we were looking at staying in our house 7 years. And C's response was that he honestly couldn't even look 5 years in the future right now. And that's true. We can try and prepare and mitigate, etc, but given our situation, our future beyond the next 3-4 MONTHS might as well not exist - everything is too nebulous.
Honestly, I'm not certain of anything, except that we can't make ends meet as things stand today, and so I've got to try and figure out a way to keep us afloat now. And lowering our long term monthly debt payments seems like a good plan to do that.

[NomoreDramaQ1015]

We break even for February between paying our final Cox bill, the first new provider bill, our first mortgage payment and we're getting our taxes done.  I would have liked to have been flush with spare cash but I will take it.    We should start coming out ahead in March.

DH's blood pressure was just shy of being in the red zone at his physical, the doctor wants him to eat less salt and lose weight.   The idea of having to be put on medication is apparently enough to scare DH into giving up fast food.   He's been eating it for lunch A LOT lately.   Cutting that out alone should decrease his salt consumption dramatically and it'll also be beneficial for our wallet.


Then we found out we do not owe anything for DH's MRI.   The hospital screwed up filing with our insurance for so long (he had the MRI back in June 2016) that by the time they did it correctly they were in violation of their contract.   BCBS will not pay them and per the agreement they have with the hospital we do not owe anything either.   We have the EOB in the safe because they warned us the hospital will likely come after us and try to intimidate us into paying hoping we don't realize how our insurance works.

[shanendoah]

Our home refinance is set to close on April 25.
We have an actual court date set on our case. Court starts May 2.
This means we have to have a $15,000 payment to the lawyer by April 18. $15k on a credit card, one week before the re-fi is set to close. I need to talk to the loan officer and let them know/find out of that will be a deal breaker.

Now, there is still a chance we won't go to trial. Until now, no one has actually been investigating the case. Now that the date is actually set, they actually have to investigate in order to be ready for trial. So there is a chance we won't go, won't owe the $15k. But it's about 50/50, so I've got to make a plan for it.

[debthaven]

Fingers crossed for you Shanendoah. I hope you get a break from all this soon. 

[Works4me]

Mar 15, 2017 13:00:03 GMT -5 shanendoah said:

Our home refinance is set to close on April 25.
We have an actual court date set on our case. Court starts May 2.
This means we have to have a $15,000 payment to the lawyer by April 18. $15k on a credit card, one week before the re-fi is set to close. I need to talk to the loan officer and let them know/find out of that will be a deal breaker.

Now, there is still a chance we won't go to trial. Until now, no one has actually been investigating the case. Now that the date is actually set, they actually have to investigate in order to be ready for trial. So there is a chance we won't go, won't owe the $15k. But it's about 50/50, so I've got to make a plan for it.

What about trying to close on the refinance prior to 4/18/17?

Also, I'd ask the attorney if there is any reason he can't take the $15,000 payment after the refinance closes. It seems to me that you have been working with him for a while now and he knows you are "good for it." 

My concern about bout the way you propose making the payments as you suggest above is thatnut will f-up the refinance. From all that you have said, the refi seems to be a great move, one that will allow you to keep your financial ship afloat.

Goodnluck and please remember - you CAN do This!

[shanendoah]

Works4me - The contract we signed with the lawyer (last June or July), specifically states that if we go to court, the payment for court is due 2 weeks before court starts. My guess this is because people who then lose court cases are less likely to want to pay their lawyer. 

I would love to close on the refinance earlier than 4/25. That is the "best guess" date they have sent us, but sadly, we may actually be moving more slowly than that, partly thanks to the fact that, unknown to me, our current mortgage servicer decided to sell our mortgage. As of today, I have a new current mortgage servicer, and so I now have to get all that information to the refi people.

If our loan officer says that paying the $15k one week (or a little more) before the refi closes will prevent it from closing, I will work with the lawyer's office to see what we can do. But my first hope is that by having open communication with the loan folks, it won't actually be a problem.

That's not true. My first hope is that now that they are actually investigating this case, people will realize that there isn't anything to go to court over, and I won't owe that $15k at all.

[shanendoah]

Got the paperwork submitted to escrow today. They had asked for it back on March 10, but by that time, I knew our mortgage was being sold (as of March 16). The problem was, no one at the new mortgage servicer could give me our new loan number, not even after March 16 when they officially had our loan. I did get something in the mail this weekend with the new loan number (though we're apparently still not in the computer system with the new place, so I can't yet set up the April payment), which allowed us to finally complete the escrow paperwork.

Sent it in and almost immediately got something back from them going - you list this company as holding your mortgage - is this new? and also, they require actual signature (vs electronic signature). So I replied yes, new as of last week, and we'll get the actual signatures in to you tomorrow.



I've asked the loan officer about the $15k payment on April 18 and haven't heard anything back yet. Kind of nerve wracking as the appraiser is due out tomorrow.
However, what I'm kind of hoping the response will be is that they just ask us to increase the amount of the refi by $15k, with the promise to pay off that credit card (which I would absolutely do).
With the $15k added to the amount we were asking for, the house would need to appraise for just over $505k in order for us to still be at 80% LTV. Best guess is that the house (based on current market) is worth close to $550k.

Also scheduled April credit card payments today. It's killing me how fast that new 0% card is filling up, but there's already been over $2500 in legal feed put on it, and it only had a $6600 limit to begin with.
Funny note that I had to "pull" available credit off my more established Citi card in order to get that limit. Within a week, I had a letter from Citi on the more established card that they were increasing our limit back to what it had been.

[naughtybear]

I'm very curious to what this legal matter is, but that is just me being nosy. Good luck.

[shanendoah]

naughtybear - Mid-May the worst of it will be resolved, one way or another, at which point I will share what we have been going through. It will probably be a big blog post and I'll just point everyone there (don't worry, I'll make a post here linking to the blog post), but that way I won't have to write it out a billion times. 

House appraised at $511k. They had a hard time finding comps because inventory in our area is LOW. (It's low in the Seattle area overall, and especially in our neighborhood). Which drives up the sales prices, but since the comps they found were from last summer, when inventory was higher....
And on some level, I don't get how this works. If I were to sell the house, I would almost certainly get $550k-$575k. But banks technically won't give mortgages for more than houses appraise for, so how would someone who didn't have $100k in cash be able to buy my house, if it appraises for only $511k. Or do appraisers do things differently when you're buying the house vs refinancing the house?
We have not heard anything back about our question regarding needing to make a $15k payment in mid-April.

On the good news front, my father found a couple Savings Bonds that had been purchases for me by my grandparents. While neither of them has reached their full 30 year maturity, they are both now worth over original issue amount ($250). One of them gets a new disbursement in April, so the plan is to wait until then, then cash them, and use that money to pay taxes.
Since they are in my maiden name, I am assuming I'll need to bring a copy of my marriage certificate along with my current ID to the bank when I go to cash them.

In bad news, we may need to replace our microwave. It was sparking like there was metal in it a couple times this weekend, and we have no idea why. We have cleaned it out really well and are hoping that maybe a small piece of tin foil had somehow gotten in, but no idea. In addition, my dryer is making a terrible squeaking noise - to the point where I can't stand to have it run. And line drying in the spring in the PNW is not really an option. So, we either need to start using a laundromat, or get it repaired. Best guess (based on internet research) is that it is a bearing that needs to be replaced, and that requires a special tool, so not something we can do ourselves. Maybe a couple hundred there.

[NomoreDramaQ1015]

If it's  a stand alone model you can get them uber cheap at Wal-mart.  We have a $20 microwave that I've had since college.   That sucker will.not.die.

[Deleted]

shanendoah - Microwave sounds like the magnetron is about to go (if it hasn't already).  Unfortunately, it might be toast.  Replacing those is not cost effective.  Same thing happened to mine a few years ago.  I'm still using the one from the camper on our countertop waiting for someone to install the new ($50 on Craigslist) over the range one. 

[shanendoah]

NomoreDramaQ1015 & minnesotapaintlady - It is a stand alone/counter top model, so not super expensive to replace, just annoying that everything is dying/needs repair right now while I really have no spare cash.

[shanendoah]

Okay, good news. Actually good news, finance wise.

Our mortgage was sold to a new servicer as of March 16. Because of the timing of the sale, we don't owe an April mortgage payment. And if our refinance goes through at the end of April, that means we won't have a May mortgage payment either. That is just shy of $5,000 back to get credit cards under control. As is, for certain I've got not quite $2,500 "extra" in April. I'm going to look at making some extra payments on credit cards, and pay for dryer repair, and add money to savings. (We've got about $1,500- the barest of emergency funds right now.)
Also, while one savings bond gets another accrual in April, the other gets an additional one in May, so maybe I don't cash those until May. Not certain. I need run some numbers.

[shanendoah]

Okay, have run the numbers.

$500 set aside for dryer repair and savings.
Credit card that had started accruing interest will be paid off (with the exception of new interest accrued) on April 14.
New 0% APR (for 21 months) that had already reached a balance of $4500 (of $6600 available) will have $1117 paid off on April 14.
Plus, instead of having $2 left after bills are paid for the month, we'll have $200 in the checking account, giving us a bit more of a cushion.

Breathing room is the best feeling, especially after months of slowly having the oxygen being cut off.

[raeoflyte]

Mar 27, 2017 11:23:59 GMT -5 shanendoah said:

Okay, good news. Actually good news, finance wise.

Our mortgage was sold to a new servicer as of March 16. Because of the timing of the sale, we don't owe an April mortgage payment. And if our refinance goes through at the end of April, that means we won't have a May mortgage payment either. That is just shy of $5,000 back to get credit cards under control. As is, for certain I've got not quite $2,500 "extra" in April. I'm going to look at making some extra payments on credit cards, and pay for dryer repair, and add money to savings. (We've got about $1,500- the barest of emergency funds right now.)
Also, while one savings bond gets another accrual in April, the other gets an additional one in May, so maybe I don't cash those until May. Not certain. I need run some numbers.

Shane--I'm not doubting your meticulousness, but I've never seen a servicing transfer/sale also waive a monthly payment.  I would just ask that you double/triple check that and make sure its in writing, and even run it by the new loan people to make sure they won't care/notice or what they need to show it isn't a missed payment.  

[shanendoah]

raeoflyte - Trust me, have checked and double checked. No payment due to the last servicer on April 1, because they no longer own the loan as of March 16. First payment is not due to the new servicer until May 1. And it is the same amount as my normal mortgage payment. I don't think it's so much a waiving of a monthly payment, and more like when you first get your mortgage, and there's a time period between when it's dispersed and when the first payment is due. For example, we bought the current house in mid-June. Our first mortgage payment was due Aug 1. I think this is similar.

But thank you for your concern. We have had loans sold before and not had this happen.

However, I have called the new servicer to confirm, specifically stating that my April 1 payment would be skipped, and she did confirm. The representative made a note on my account saying that I called to verify, so I shouldn't be able to be hit with any penalties. 

[shanendoah]

I will also add that credit card payments are scheduled to be made Apr 14. If my auto-draft for April somehow got transferred from the old servicer to the new servicer (with them forgetting to inform me), I will have plenty of time to reduce the credit card payments back to what they were originally planned to be. 
And I do have $1500 in emergency funds to pay for fixing the dryer. I just hate the idea of using those funds (I know, this is what they are there for), when it is so hard for me to then replenish the account.

[TheOtherMe]

Just hope this all ends for you very soon and in your favor.

[raeoflyte]

Mar 27, 2017 15:31:07 GMT -5 shanendoah said:

raeoflyte - Trust me, have checked and double checked. No payment due to the last servicer on April 1, because they no longer own the loan as of March 16. First payment is not due to the new servicer until May 1. And it is the same amount as my normal mortgage payment. I don't think it's so much a waiving of a monthly payment, and more like when you first get your mortgage, and there's a time period between when it's dispersed and when the first payment is due. For example, we bought the current house in mid-June. Our first mortgage payment was due Aug 1. I think this is similar.

But thank you for your concern. We have had loans sold before and not had this happen.

However, I have called the new servicer to confirm, specifically stating that my April 1 payment would be skipped, and she did confirm. The representative made a note on my account saying that I called to verify, so I shouldn't be able to be hit with any penalties. 

Since interest is paid in arrears I can't see how this would work during a loan servicing change.  When you refi they wrap the interest from the day you close to the end of the month into your prepaids paid at closing (and oftentimes rolled into your loan amount).  

BUT if they've verified and confirmed everything I'd also go with it.  

[shanendoah]

raeoflyte - Another saving grace is that there is a 60 day window after the loan servicer is changed in which I cannot be charged any late fees/penalties for a missed payment, and the re-fi should close at 41 days after the loan servicer changed. And since the refi amount was based on what we owed pre-March 1, it will be more than enough to cover the full balance. And while I'll get less "overflow" from the refi than I might have otherwise, I'll owe the same amount on it one way or another. So in that sense, this is just giving me some of that money early.
The one concern is that I might owe some money into the escrow account.

[shanendoah]

And because the second one thing seems to be going right, something else goes wrong. No re-fi. Apparently, the 5/1 ARM is capped at 75%LTV, not 80%. And, given our low appraisal, we would be at 76% LTV. So, no re-fi unless I can come up with $6k to bring at closing. (I'm complaining at them because the 75% LTV is not in any of the material I saw, and might have made a difference in choosing a product, or choosing to try and re-fi at all.)
We don't have $6k to bring at closing, without putting it on a credit card. And at that point, the "savings" I'd get each month would simply be going to pay back that $6k for the first year, not actually giving us any breathing room. So there we go.

[Wisconsin Beth]

I'm sorry Shanendoah. That sucks.

[wvugurl26]

The no refi really sucks.

[debthaven]

I'm sorry Shane. I hope you get some good news very soon.

[TheOtherMe]

So sorry, Shane.

[Angel!]

I'm sorry. Just keep focusing on the fact that there is a light at the end of the tunnel and things will eventually get better. I hope everything gets worked out soon.

[Jaguar]

I'm sorry Shane, that sucks completely.

[CCL]

Can they do another appraisal, maybe find some more recent sales, even if they have to look further from your neighborhood?

[Peace77]

Could you refinance with a different lender?