When we took out a second mortgage on our house, we were looking to get rid of our PMI. Because we were told that we had so much equity in our house we decided to also consolidate our debt. That was three years ago. When interest rates hit the "all time low", we decided maybe it was time to build the home we wanted to retire in. We no longer needed a 5 bedroom/4 bath home.
We put our house on the market and contracted with a builder. At this point we had excellent credit, retirement accounts and money in the bank.
After three months of no bites on the house and believe me other houses were selling fast, we decided to investigate.
We found that our house was over priced and that homes around us were selling for much less. In fact an identicle floor plan house directly across from us sold for over $100,000 less than the appraised value for our second mortgage.
We checked out the appraisal and found that the comparables were on acreage when our house was on a city lot and this was not adjusted for. We also tried to get a look at the comparable properties and could not find 2 of the three houses. They didn't exist!
We contacted Wacovia and they said we could do a short sale on the house, but we would have to carry the remaining balance on an unsecured loan. At that point I would have done that, but since then things have gone downhill.
We continued to market the house and kept lowering the price. For almost two years now we have been making double mortgage payments on two houses. This has eaten up all the money we have including our retirement accounts. In order to close on our new house we had to accept a higher interest rate with PMI. In December of 2003 we found ourselves no longer able to make double payments because we literally ran out of money.
Finally we had a buyer for the house, but Wacovia did not work with the buyer on her needed timetable and never approved the short sale for them. We lost that buyer. We now have a second buyer, but Wacovia has started foreclosure proceedings and is not working with us to get this sale through either. Because of their 30 days to make up their minds, the buyer has to accept a sale contingent on whether or not they will allow the sale and take the chance they won't approve it. If they foreclose, they will sell the house for less than the buyer is offering right now and incur legal costs.
I don't understand this approach to business and I wouldn't want to be an investor in their company. I talked with the Loss/Mitigation Department about being a victim of the inflated appraisal as well and they had absolutely no interest in this fact. It was plain fraud. We did everything we could. We now have bad credit ratings, no money and will need to file bankruptcy. Where is the justice???
If I were them I'd let the sale go through and file a suit against the broker and appraiser. I wouldn't want to keep doing business with them. I guess that's not one of their scenarios.
Small Town, Minnesota