Author Topic: Snippet of Shame From Work  (Read 4603 times)

revisednut

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Snippet of Shame From Work
« on: December 14, 2015, 05:57:22 AM »
Background: I work in the "scratch and dent" (read subprime) mortgage business.  The below is an e-mail received over the weekend. Any identifier information has been removed. 

Homeowner called in requesting deferral of Oct/Nov/Dec mortgage payments.  He works *insert blue collar job here*.  His hours have been cut from 65-70 to 40.  The property is a rental and is currently not rented.

More Background: This property is worth $100k-$150k all day long.  His balance is around $60k.  IR is sub 5%. 

It boggles my mind that one would ask the "bank" for a deferral on payments, because of the inability to weather a vacancy on a rental.  Payments are sub $600/mo.  Why wouldn't one just sell, and walk away with the equity?

cawiau

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Re: Snippet of Shame From Work
« Reply #1 on: December 14, 2015, 06:19:22 AM »
Because we are human and always hope/pray that things are going to turn around the corner.

Same reason some folks don't file for bankruptcy till every resort has been exhausted. We continue to hope and hope and hope some more.

My wife has an aunt that should have sold her home over a year ago due to job loss and yet kept on holding on to it. 1 year later, still no job in sight, savings exhausted, has borrowed from everyone she could... Still will not sell.

Not sure how much she owes but her home is valued at 675k in Westbury, Long Island.

Not everyone can approach personal finances like a business and leave their feelings out of it / think practically.


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revisednut

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Re: Snippet of Shame From Work
« Reply #2 on: December 14, 2015, 06:41:52 AM »
Great points made here, but I would  feel it easier being a rental.  After-all, it is a business.

ash7962

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Re: Snippet of Shame From Work
« Reply #3 on: December 14, 2015, 06:57:55 AM »
Yeah, renting out a house is a business, and emotions shouldn't come into play.  If he is making business decisions based on emotions then he deserves the antimustachian wall of shame and a face punch back to reality.  Having said that, I don't see anything in his email that would say his emotions are getting in the way.  He could be just as easily have used some cash reserves to fix some damage, and is planning on finding a tenant or selling it after.  If anything I'd say its more likely he should have had a larger cash reserve, cut back in other areas of spending to cover the mortgage, or picked up a second part time job to do in the 25-30 hours that were cut from his main job.

revisednut

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Re: Snippet of Shame From Work
« Reply #4 on: December 14, 2015, 07:02:44 AM »
It would make financial sense to defer this, if this were certainly the case.  The issue is starting a precedent that payments can be deferred anytime the owner is unable to maintain payments.  What happens if a furnace goes out next month?   

Uturn

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Re: Snippet of Shame From Work
« Reply #5 on: December 14, 2015, 07:57:20 AM »
That is a very significant pay cut.  I would extend a sub 5% loan instead of cashing in a higher percentage investment to get me through until new tenants are found.  This can also keep the cash reserves intact for that furnace that is about to go out next month.  Unless I'm missing some information, I don't see anything that would make me want to shame this man. 

revisednut

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Re: Snippet of Shame From Work
« Reply #6 on: December 14, 2015, 08:18:27 AM »
That is a very significant pay cut.  I would extend a sub 5% loan instead of cashing in a higher percentage investment to get me through until new tenants are found.  This can also keep the cash reserves intact for that furnace that is about to go out next month.  Unless I'm missing some information, I don't see anything that would make me want to shame this man.

I honestly don't believe there are any reserves, or we wouldn't be having the conversation.  Of course, that's just an assumption. 

Apples

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Re: Snippet of Shame From Work
« Reply #7 on: December 14, 2015, 12:47:41 PM »
It's a significant pay cut, but depending on his field of work, this is exactly the time of year that hours get cut.  Our employees go from 50-60 hours a week to 40 through the winter, and sometimes there's not even enough work for a full 40.  Maybe it was a surprise, but with the job being blue collar I doubt it.  Also, he got cut back to a normal workweek.  DH, who had a blue collar job, and I plan our budget on the lowest amount of money we plan to bring in when he worked in that situation, and then made hay while the sun shined and stocked up those savings accounts while he pulled OT all summer and fall.

Kaspian

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Re: Snippet of Shame From Work
« Reply #8 on: December 15, 2015, 01:42:24 PM »
Ah, one of those people who (despite 2008) still see property as a "nest egg" and the only real "safe investment".  ...Gotta love 'em.  :/