ss After reading the posts on this forum for the last several months, my wife and I have decided to buy and bail. We thought we would chronicle our experience for those interested.
My wife and I have credit score north of 700. We are both from New England and have wanted to move back. We currently live in California.
The CA house
We bought the house (1962 ranch house, 1800sqft) for $530K in 2005, with and first mortgage of $423K (GMAC) and a purchase money second of $107K (ResCap (Also GMAC)). Total payment per month of $3300, not including tax escrow or insurance, which are both paid separately. As such, the total per month is just under $4k.We have never missed a payment or been late and actually make one extra payment per year. Our interest rates are 6.25% on 1st mortgage, and 7.5% on 2nd mortgage. We have replaced the HVAC system, windows, and landscaping. We intended on staying.
We called several times seeking to reduce the interest rate but the call center worker instead chose to lecture us on our obligations to pay our as prescribed. The irony of getting this lecture from GMAC, a company that required a govít bailout, isnít lost on me. As such, no interest rate adjustment is possible.
Luckily, my job affords me the opportunity to pretty much work from anywhere. There is a moral issue we each wrestled with. In the end, it is a business decision, pure and simple. Our quality of life would greatly improve by moving back to New England and dumping this house. We decided to live in Southern NH. We have identified a number of houses we will be looking at when we go back to NH at the end of July. We are looking in the $300K to $400K range. Houses in this range are a considerable improvement over the CA house. Most are at most 10 years old and need little is any work as opposed to our CA house.
We have good credit and make good money. I was concerned that the question of our intentions with regard to the CA house would come up. One mortgage banker from Discover immediately asked us about the CA house. At that point we changed our approach. We went directly to a mortgage broker. Our thinking is that he could care less provided we put down a good amount of money. We are putting down 20%. Once he heard that he never asked about the CA house. Yesterday I got our pre-approval for a $325K at 3.875%, fixed for 30 years. With our down payment that means we can buy a $400K house at 3.875% fixed. Our payments on a $375K house, with high NH real estate tax and insurance included, will be about $2200 per month. We are saving at least $1800/month for a house needing little to no work!
Once we close on the house in NH, we will cease all payments to GMAC and ResCap. I am going to contact them and let them know I have walked. I may engage a CA lawyer to officially notify them that we surrendered under DIL. We were going to short sell the property but why? If a short sale is treated exactly the same as a foreclosure and reported as such to the credit bureaus then why should I waste my time and effort to help out GMAC.
Sorry for the long post, but they will b shorter now that the background has been established. Please feel free to ask any questions. Also, any advise or suggestions are appreciated.