This is the story of Adam Truman and Bob Bowder. Adam and Bob met their first year in college. They hit if off right away thanks to their mutual love of baseball, craft beers, and vintage muscle cars. Even though very different people by nature, when they were together everyone would always smile.
Right after graduating, Adam and Bob both found jobs working in the same company. Adam’s personable nature and flair for creatively solving problems made him the perfect fit in marketing. While Bob’s tenacity and head for numbers made him a natural in sales. Being ambitious and well liked at work, they climbed the ladder with great success. Neither really thought about what the future would bring, but Adam and Bob were really in for a surprise. Adam met Cathy, and Bob met Debbie, who were also best friends. They were both married by springtime after dating less than a year. Each was the best man and bridesmaid in the other’s wedding. It really seemed only right. The four of them were practically inseparable, like friends in a sitcom.
It was the perfect time to find a place they could call their own.
Cathy finds a lovely new development in one of the nice parts of town. With the help of Debbie, she convinces Adam and Bob to buy the two houses right next to each other. A home within a culde-sac with cream brick façade surrounded by maple trees, a wonderful place for kids to grow up. It didn’t take long for children to come into the picture.
Adam and Bob each take out a mortgage of $400,000 to buy their new homes. Though it seemed a little excessive with a family on the way (and thinking of at least two kids) it made sense to have room to expand. Besides, they could both afford it, even with Cathy and Debbie taking time off.
As the years pass by, Adam and Cathy were blessed with Jason and Emily, while Bob and Debbie had Kyle and Ashley. At that moment their lives were just about perfect. Everyone was healthy and happy, and they could not have asked for more.
Then the economy took a downturn. Adam and Bob both lost their jobs when the company they worked for went bankrupt. Cathy and Debbie both just had their second child, and were not ready to return to work yet.
Luckily Adam and Bob had been smart, with ample savings to live off. They were both experienced and had good references, and would surely find a new job soon. They never thought of selling the homes they worked so hard to get. When they checked the latest housing prices in their neighborhood, Adam and Bob were even more determined to get through this bad turn of events.
The house down the street sold for less than $300,000 and there was no way either wanted to accept that kind of loss (remember they bought their house for $400,000).
Months pass and neither Adam nor Bob have any luck finding new work. Cathy and Debbie had little luck themselves, finding only low-paying menial work, not even closely related to their degrees. They took the jobs anyway so Adam and Bob have more time to find something.
Even then the money is not enough to cover the mortgage, car payments, and all the bills. Every month they watched their savings dwindle, and with no good job prospects in sight, things start getting a little desperate. It now looks like they might not be able to make their next payment.
Adam and Bob start talking to their bank to discuss their options. The bank offers to modify the mortgage but Adam doesn’t like the idea of just delaying the inevitable. You have to have a job to qualify for a loan modification, which he does not. (modification could mean a reduction of monthly payment) With savings dwindling, Adam didn’t want to risk everything so he could have a few more months of possibly fruitless job searching.
Even with a lower monthly payment, he would not be able to afford the mortgage due to being unemployed. Adam said “There’s no way I’ll put my family through foreclosure, I’d rather sell it and start fresh!” Adam decides to put his family’s home on the market. Bob decides to modify his loan as he is sure he will find a job in time with his salesmanship skills.
His savings take a huge dent, but he figures out that he will come out ahead in a few years as long as he finds work soon.
Bob said “I don’t want to lose my home; I’ve worked too hard for it!”
More months pass, and neither Adam nor Bob have any luck finding work.
Adam does some research and finds out about short sales. He talks to a short sale expert who advises him on what to do next.
While the agents start putting together a financial package, Adam writes a letter to the bank talking about his financial hardships.
In less than one month Adam and his real estate professional receive a firm offer to buy the house for $310,000 in cash. Even though its $90,000 less than he paid for it, Adam takes the offer to the bank, but they reject the offer price. The bank asks for at least $340,000.
Undeterred, Adam and his real estate professional work with the bank diligently to get his offer approved. Using current market comparables, detailed statistics and by staying in close contact with the bank they continue the path towards a short sale.. By this point Adam was dangerously close to exhausting his savings, and had already missed one mortgage payment.
Bob has now exhausted his savings. He misses his first mortgage payment, but hopes the bank will leave him alone until he can find a buyer.
The bank sends him a letter which he hides from Debbie. “I don’t want her to know” Bob tells himself. He starts using credit cards to pay the bills.
Adam takes his carefully prepared financial package, hardship letter, and offer to the bank once again.
His real estate professional spends the next few weeks negotiating until the bank finally agrees to accept the offer of $310,000 in cash. The bank agrees to accept the offer as payment in full, and the sale closes in less than 3 months after Adam first received the offer. Adam walks away debt free from his mortgage.
Bob has now missed 3 months of payments, and the bank finally sends a Notice of Default. Bob has now maxed out his credit cards and has no way of paying the back-payments, interest charges and additional legal fees.
After admitting to Debbie their real financial situation, Bob reluctantly puts the house up for sale. Bob finds no firm offers in time, and the bank forecloses on his home. Bob is sued by the bank and is taken to court by his second lien holder. The bank demands full payment of the loan, but he has no way to pay the back payments, let alone the whole mortgage. The court rules in favor of the bank, and the bank is now after Bob for the entire loan. While all of this is happening, the bank sends an eviction notice to Bob.
The Truman’s manage to stay in the same city and rent a home similar to the one they short sold, while Adam continues to look for work. With Cathy earning minimum wage they manage to keep afloat with some difficulty. For right now, the Trumans can wait for better things to come.
The Bowder’s are now broke and homeless, with a huge amount of credit card debt. They are forced to file for bankruptcy which completely devastates his credit rating. They are forced to move in with Bob’s parents out of state.
So what happened to Adam and Bob?
Adam and Bob both find great jobs a few months after losing their homes. Adam gets an executive position in a local marketing firm, while Bob finds a position managing his own sales team with an international distributor. They both move to new cities.
Since Adam avoided foreclosure, his credit rating took only a minor hit due to the short sale. After working for 6 months (10 months after short selling the house), Adam is able to secure a new loan. He buys a new house just like the old one, for a much lower price (the housing prices finally working in his favor), and the Truman’s move into their new home. Their struggles a distant memory.
Bob and the Bowders manage to get back on their feet as well, but with a foreclosure and bankruptcy appearing on Bob’s credit report for the next 7- 10 years. No bank is willing to give him a new loan for a house, or even a new car. The Bowder’s are stuck renting (and buying used cars with cash) until the foreclosure and bankruptcy disappears from their credit report.
The Trumans and Bowders still keep in touch and remain great friends throughout this whole ordeal, although they both followed very different paths despite very similar circumstances. While Adam and Bob both eventually recover from losing their jobs, Adam virtually wipes away the experience by acting fast and cutting his losses before they became unavoidable. Bob stuck around too long and suffered the consequences that are unfortunately all too familiar for the average American homeowner today.
This scenario was based on several real cases, and is not a true story. These experiences may not be exactly what you go through, but are very similar to what has happened to millions of families across America.
How can you avoid Bob’s fate?
If you know that you cannot afford to keep paying your mortgage, and that your house is worth less than what you owe, it is time to stop hiding, and start dealing with the situation.
We are not pretending that short sales are magical deals that will solve all your financial problems. This is simply a solution that can remove the overwhelming financial pressure you are facing right now and allows you to move on with your life.
The alternative is hiding (which you can’t do for long), ignoring the problem until its knocking at your door (literally), foreclosure (and possibly bankruptcy) which will ruin your credit. All of which you can avoid if you want to. Right now you can decide the best thing to do for yourself and your family, or you can let the bank decide that for you (and we know they’re not that interested in your wellbeing). Foreclosure is a ticking clock and the chances of failure increase exponentially the longer you wait.
A Short Sale Will Help You:
Avoid Foreclosure
Avoid Bankruptcy
Protect Your Credit
Get the Bank to Agree to Your Terms
Walk Away with Your Debt Paid in Full
Information about Short Sale San Diego
Short Sale San Diego is a local real estate company that specializes in foreclosure prevention by providing options for homeowners who are experiencing difficulties with their mortgage. Our knowledgeable agents and short sale negotiation team are licensed by the Department of Real Estate and collectively have over 20 years of experience in the real estate and banking industries. Over the years we have helped hundreds of families and individuals throughout the San Diego area.
We understand the stress that is related to not being able to make your mortgage payment. At Short Sale San Diego our goal is to provide you with the information and options that you need to make an informed decision about what steps you need to take. We make it our number one priority to putting our clients in a better position for the future and we want you to know that we are here for you every step of the way. You can be assured that by choosing Short Sale San Diego you will be partnered with a business that you can trust will provide you with excellent service and results that cannot be matched.
Short Sale San Diego Highlights:
– Highly Experienced & Licensed Short Sale Negotiators
– Knowledgeable Agents that Specialize in the San Diego Market
– We Do Not Charge Anything for our Service
– Alternative to Foreclosure
Regain your Financial Freedom:
If you would like to find out more about Short Sale San Diego or would like to schedule a free consultation with a Short Sale San Diego agent, call us at 619-825-0000. We are more than happy to explain how the short sale process works and together decide if Short Sale San Diego is the right company for you.