Saturday, August 25, 2012

Day 177: When to Leave


 
Credit Score: 657

My score is up two more points! I'm liking this direction much more than dropping by huge chunks each month. 

I did hear from the lawyer soon after my last post. He says my shot at foreclosing in 2012 in lots better now that we have the auction date, but it could still get postponed up to four months without me having any notice or say in it. I'm still betting that it'll happen in December based on the crazy punctuality and thoroughness of the law firm that's been sending all the documents. 

As far as when we can move out, he says pretty much any time, but we should still check with a tax professional. There are examples, even examples published by the IRS, that show that people can leave before the sale and still qualify for the tax credit. 

However, after some internet research, we've decided to stay till December. Some tax people, real estate agents, and home owners all recommend staying till the bitter end. For one, you get to keep pocketing your mortgage each month. But mostly, the liability of the condo would remain with us until the day of the sale. November and December are dangerous months to leave a home unattended. If our pipes burst and damage our unit, or the neighbor's units, we're still liable to pay. If people notice the place is vacant and move in or destroy something or get hurt, we're again liable. 

Thus, we'll be staying until the sale. We might even go attend the sale just to verify that it not only happened but to ensure the amount it sold for is the number that actually shows up in the tax documents. 

I'm still having fun looking at houses and apartments online though. We're thinking we'll move closer to Corey's job and I'm looking forward to a new area. I'm hoping to rent a house, just for lower density living and to test-drive home ownership versus condo ownership. House rentals seem pretty expensive though, much more than we'd pay in a mortgage if we bought an equivalent place. Perhaps that just means these owners are still paying their higher interest rate mortgages and need to refinance. Or that the demand is high enough they can ask that much. 

Monday, August 6, 2012

Day 158: Notice of Trustee Sale

Credit Score: 655

YAAAAAYYYYY!!!! It came!! I was so hopeful that the law firm would be just as fast with this notice as with the last one, but I didn't really believe they would be. On the date that was the minimum time from the Notice of Default, they dated the Notice of Trustee Sale, then got it on my door a couple days later.

I saw it taped to my door when I got home from work on Friday. Saturday, again matching the previous history, we had six letters in the mail with a note that we had an additional six letters to pick up at the post office.

I was excited enough to just see the notice on the door because our odds of selling before the end of the year had just rocketed up, but there was one piece of information later in the notice that made it even better - they had a specific date of sale! Date, time, detailed location of exactly where and when my condo will be sold. The earliest would've been early November based on the notice being posted August 3rd, and no, the sale isn't the earliest possible, but it's still pretty darned good. Early December!

I'm really liking this law firm - their punctuality and thoroughness - so I think it's a safe bet that the sale won't be postponed. I'm feeling really good that it's going to sell in December and that we aren't going to owe taxes.

(One person asked me recently "what if no one buys it?" so thought I should explain that quickly. In all likelihood, no one will buy the condo at the trustee sale. The condo doesn't get listed as "on the market" and I don't have to find a seller. What'll happen in early December is that the county will auction off my condo on my behalf to the highest bidder - most likely the bank will be the highest bidder. They have to go through this process to legally transfer ownership from me to the bank. If someone does want it, they just have to pay an amount that the bank accepts and ownership transfers straight to them. But, 99% chance that the bank will own it at the end of the sale, and 100% chance that I won't.)

Even if it the sale gets delayed though, I'm glad to see articles like the one a commenter linked in my last post saying that some lawmakers are worried about this bill expiring. I would think, as the non-expert I am, that allowing the bill to expire could only be damaging to the economy. I had not considered the possibility of a retroactive reinstatement of the bill though. That really could work, and seems more likely than the off-chance that congress will get anything this big (i.e. useful) approved before the election. But, the article is entirely right that if your foreclosure ends anytime in 2013, you don't owe the tax burden until April 2014. So really, congress has until the end of 2013 to give the homeowners that tax relief. I'm more optimistic that it'll happen when the timeline really stretches out that much further.

Now that we've got a date, a schedule we can plan to, and a newly solidified future, Cory's finally onboard with contemplating a new place. He's been a little resistant, knowing that we might still have a year or more in this place. So we've just now started looking online at apartments and rentals. I asked him to circle areas on a Seattle metropolitan map where he'd be willing to rent. I, the transplant, had been repeatedly finding places I thought looked great but that weren't in places he, the native, wanted to live. I'm starting to wrap my head around a much longer commute too. Plus, we think we're definitely paying movers to do all the hard work. We'll be in a new place by Christmas. : )

I did send a copy of the notice to the lawyer we've been working with, and asked if we HAVE to still have the condo as our "primary residence" on the date of sale. What does that really mean? We sleep there that night? We're not paying for another apartment at the time? We haven't redirected our mail yet? Or can we move a month before the sale and still qualify for the exemption? Does a tax advisor make that decision for us? What's needed?

Buuuut, I haven't heard back yet. I'll post again when I do.

As a last note, my credit score went up another point! So far in this process, I've taken two big wallops to my credit score equaling about 100 points. Since those two wallops, my score has increased twice by one point. That's a really slow rate of improvement, but once my foreclosure goes through, my number of missed payments will stop growing, and hopefully my credit score will rise faster. It'll still take 7 years for the negative information to drop off my report all together, so it won't be fully repaired until then, but it'd be nice to see it back at a good number eventually. There's also still the possibility that there'll be a third wallop after the foreclosure finishes, since that'll be the first time that my report officially gets a "foreclosure" on it, instead of just a bunch of missed payments. Credit Karma's simulator says that adding a foreclosure won't lower my credit score, but who knows how accurate that is. It'll definitely be interesting to watch.