Author Topic: Underwater Mortgage:/ Washington State  (Read 6027 times)

Tami1982

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Underwater Mortgage:/ Washington State
« on: December 12, 2012, 02:51:54 PM »
Hey guys, I'm reaching out on behalf of my parents.  Let me tell you a little bit about them.  They are and will always be horrible money managers.  I was raised thinking we were poor.  We were not poor, mom and dad just spent all the money.  Now mom and dad make a combined $90,000 a year, but live totally paycheck to paycheck and a $200 unexpected expense will completely horrify them.    There are all kinds of psychological reasons for why they are who they are, and two people with all these money hangups getting together has been kind of a disaster.   

They went bankrupt in 1998.  The housing situation was complicated, so I'm skipping it and jumping to the important bit.  In 2006, mom and dad bought a house.  Yep, when everything was crazy inflated.  They paid $267,000 for a house that they might be able to sell for $180,000 today.  They tried to do the special refi's and everything available from FHA and work with their mortgage company, but were told that they signed 2 days too late to do the special FHA refi and the mortgage company offers no programs to help.

They are barely treading water, and are not willing to make major life changes.  They have lots of debt in the forms of cars, boats, and credit cards.   Trust me, I've shouted until I'm blue in the face.  They are of the "ignore it, and it will go away" persuasion.  The house issue isn't going to fix itself, they need to fix it.  They are not willing to look into it and I'm jumping in on the tail end here so I can at least tell them their options before they get kicked out of their home and have to live in my living room.

As far as I can tell, there are three options.  1) Short sale  2) Walk away 3) Bankrupt again.    I doubt they will short sale because it's too difficult (not really up for challenges or hardship.)  I guess what I'm really looking for are the consequences of option #2.  What happens in Washington state if they walk away?  Anyone know?  I think if they could get in a cheaper housing situation they could still bleed money, but not worry about being without a house. 

I thought about them renting it out, but the mortgage payment is so high that it's more than they could reasonably rent it for. 

::sigh:: I don't know how to help them.  My brother and I are both adults (though he still lives with them) so it's not like they have to worry about kids any more.   I tried to talk to my mom about it today and she talked about dropping her health insurance ($300 a month) instead of, I don't know, CUTTING CABLE!   Because her life is work and television.   They blame each other for their money problems.  Mom says it is dad's fault, and vice versa, and comes up with how she's worked 35 years for the same company and dad couldn't hold a job (which is true when they were first married, but dad's had steady work for over 20 years now) and he owe's her for that stressful time.  BAH - parental money basket cases!

Anyone have anything to offer?  I'd appreciate any feedback.  Thanks guys!

StashinIt

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Re: Underwater Mortgage:/ Washington State
« Reply #1 on: December 12, 2012, 03:17:01 PM »
Option #4

Stop making payments, squat, wait for foreclosure. Seems to match their personality perfectly.

gdborton

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Re: Underwater Mortgage:/ Washington State
« Reply #2 on: December 12, 2012, 03:55:51 PM »
Let them deal with their own problems.  It seems pretty obvious that they don't want to take your advice.  Don't let them into your living room either, they'll be able to find a place to live with 90k a year income, and they're payments should be much lower after the bank sells their house.  I know they are your parents, but get too involved and they jeopardize your lifestyle/plans/finances.

Paul der Krake

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Re: Underwater Mortgage:/ Washington State
« Reply #3 on: December 12, 2012, 06:43:46 PM »
Why any household making 90K a year is unable to buy cars in cash is beyond me. At that income level, a brand new corolla is what, 3-6 months worth of savings?

This forum is filled with anecotes of financially illiterate relatives. If one bankruptcy didn't make them question their lifestyle, there is probably nothing you can do at their age.

Your best bet, if you insist on helping them, is to drug them, cut their tongues off, and file for guardianship.

Tami1982

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Re: Underwater Mortgage:/ Washington State
« Reply #4 on: December 12, 2012, 07:04:30 PM »
You guys are right.  I can't fix them.  This is a battle I have fought my whole life.  When I was about 14 I started doing all the bills and I did them off and on (even when I was away at college) until two years ago.   That's 16 years of trying to help.  I think I may have hurt them, and not helped them by doing that.  I was a kid when it started, but it went on too long.  I moved out, bought a house (without help - I paid the down payment on the house they are in) and am working hard to be debt free and ahead of the game in my life.  I can't get hung up in theirs.  It's too stressful.  I ate a mountain of crap today because I was so upset when I got off the phone with my mom.   Not my responsibility.  I'll just repeat that 1,000 times. 

Why any household making 90K a year is unable to buy cars in cash is beyond me. At that income level, a brand new corolla is what, 3-6 months worth of savings?

They are incapable of saving.  Never have been able to do so.  They want things NOW.  All my life, as soon as they'd pay off a car loan, they'd get another one.  They have probably $10,000 in cc debt, $9,000 on a truck, $13,000 on a boat, plus a personal loan of $4,000 and their monthly bills are quite high too - mortgage is $1,800. Once you pay everything, there is hardly anything left over. 

They have impulse issues and there are "isms" at play here too, but it's painful to watch them make so much, work so hard, and live, really, so poorly.   I just want to shake them and be like, "do you know how you COULD be living?"  And this is me saying this.  Me - disabled, very low income, and yet able to make more progress on less than 1/5 their income. 
« Last Edit: December 12, 2012, 07:18:53 PM by Tami1982 »

kiwichick

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Re: Underwater Mortgage:/ Washington State
« Reply #5 on: December 12, 2012, 07:34:00 PM »
I paid the down payment on the house they are in

Seriously? YOU paid the deposit on THEIR house?? I agree, you've done way more than anyone could every expect. They need to take responsibility for their own actions. I would say going bankrupt would be the wake-up call that they need, but you mentioned that already happenned in 1998, so..... hmm.

My folks are similar (though not as bad). They're determined to retire in 2014 (they're mid-40's) and travel the world, but they have absolutely no savings and the house needs a lot of work. They have a farm with a small mortgage (which at least will be paid when the stock is sold). Their "retirement fund" is the bottom section that they plan to sell off when they need the money, but there's no way it's going to cover all their expenses for the next 17 years before the (pitiful) supperannuation kicks in!

Parents eh?

Tami1982

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Re: Underwater Mortgage:/ Washington State
« Reply #6 on: December 12, 2012, 09:11:33 PM »
Seriously? YOU paid the deposit on THEIR house?? I agree, you've done way more than anyone could every expect. They need to take responsibility for their own actions. I would say going bankrupt would be the wake-up call that they need, but you mentioned that already happenned in 1998, so..... hmm.

Yeah, I did:(  And I did live with them there for five years (paying rent), but when I asked for a tiny bit of financial help during the move in process when I closed on my house - you would not believe the guilt trip (yeah, I did that) I had to lay on.  And I paid them back every penny within a few weeks.  I think maybe too many people, myself included, always rescue them.  When we were kids, I know my mom's family helped out a lot, because we were the only kids in the family, but as an adult - there is no one to bail them out anymore.  No people are going to rush in and offer assistance.  And I definitely am not in a position to do so now. 

My dad is under the impression he has all this money for retirement.  He is in for a rude awakening.  Mom has zero. She cashed it out prebankruptcy.  Now - I can't blame them entirely for the bankruptcy as there was a business that went under, but she has not rebuilt her retirement at all since.

They just keep living like they'll never be old and unable to work.  It's sad and worrying because I'm going to be the one taking care of them and just don't know how I'm going to manage it. ::sigh::
« Last Edit: December 12, 2012, 09:16:41 PM by Tami1982 »

Adventine

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Re: Underwater Mortgage:/ Washington State
« Reply #7 on: December 12, 2012, 09:37:05 PM »
I'm sorry to hear you're involved in a giant mess that you don't deserve, Tami. I think some space away from your parents would be good for now. If you keep "intruding" into their lives (I imagine they see your attempts to help that way), they may just keep resisting you. But if you leave them alone for a while (no visits, zero communication), they may stop being so defensive and become more receptive.

Well, that's me being optimistic.

PJ

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Re: Underwater Mortgage:/ Washington State
« Reply #8 on: December 12, 2012, 10:56:07 PM »
Tami, I know you're primarily looking for information about the consequences of certain courses of action your parents can take, so apologies if this oversteps the bounds too much ... but I hope that you have or will seek some counselling.  The kind of dysfunction that makes a 14 year old feel so insecure that she would take over the paying of the bills (and that would have the parents allow that to continue!) is significant.  While an adult child contributing to the downpayment for a house they are planning to live in with their parents is not unheard of, in the context of the bigger pattern of the relationship, it suggests that you're not entirely joking when you say that you're just hoping to keep them out of your living room.  If you've taken on the role of fixer in the family dynamic your whole life, it's not so easy to step out of that role now.  It might be very helpful, when you are repeating "It's not my responsibility," to have someone whose job it is to assure you that you're right! 
 
Now, there is a question that comes to mind about your brother - about whether he's old enough to be contributing to the household, and if so, is he?  If not, would appropriate contributions from him be enough to keep them going for the time being?  Or alternatively, would it be appropriate to try to focus your helping efforts on him, helping him get out of the way of the coming financial disaster and get set up in his own household?  Maybe introduce him to the sign of the 'stache?

Tami1982

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Re: Underwater Mortgage:/ Washington State
« Reply #9 on: December 29, 2012, 08:24:14 PM »
Hey PJ - I wanted to thank you for your thoughtful reply.   I am in counseling and have made a great number of changes in my last the last few years.  The biggie being I bought a house and moved out.  That was incredibly empowering for me.  All the things I've done for my family and in my life and I still had a core belief that I was not a capable person.  The fact that I did that without help made my perspective change.

I don't honestly believe my parents will end up in my living room, now my brother? Maybe, LOL.  They make too much money for that.  I guess the worst thing is that they'll skip payments, the house will get foreclosed on and they'll end up in a rental.  They make enough money that I can't envision them having to live here. 

And you are right, I do need that check in from others to assure me that it isn't my job or responsibility to fix them.  It's not, but a part of me will always believe I am delaying the inevitable because instead of saving and investing, they are spending and when I have to take care of them in 20 years (god, how did that happen? so soon!) there isn't going to be any money to do it.  But Adventine is also right, because they do not see my attempts at helping them as helpful.  They know there is a problem, I talk to them and stir them up (individually), but they never talk to each other and resolve anything.   So I give. 

I give.  I figure, I've made an offer of aid.  If they want or need it, or need someone to research or look into something I'm here and willing to do that.  My hand is out, but they need to meet me half way or I'm just grabbing air.   My life has been too stressful for my being so young.  Too many years full of anxiety and worry over things I had no control over.  What a waste of my time!  Ouch, that kinda hurts to say.  So many of my teen years and twenty's were lost to just huge amounts of anxiety, stress, and worry.  So much so that I often made myself sick, missed school, and was completely isolated.  I'm so grateful my life has changed and how it is evolving. 

Thank you for all your input.  I greatly appreciate it and am thankful. 

Working Mama

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Re: Underwater Mortgage:/ Washington State
« Reply #10 on: December 30, 2012, 11:07:04 AM »
Tami,
HUGS!!
WOW you are a good woman.  Protect yourself both emotionally and financially - and then you can help your brother when he is ready.  Your parents will never be ready.  Love them from a distance.

PJ, excellent and wise words - so kindly put.

Love, Mama

kaeldra

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Re: Underwater Mortgage:/ Washington State
« Reply #11 on: December 30, 2012, 08:42:32 PM »
Another Washingtonian - I've had several friends stop paying their mortgages. It seems it can take quite a while to actually get kicked out. Two people I know chose to move out on their own after living 'rent-free' for several months, and once they left, the bank changed the locks very quickly (like within a week). So get everything you want out right away, don't drag out the moving process or you might get locked out.

It's my understanding that in WA everything but the walls is yours, so some people will sell their fridge and stove etc and leave the place totally stripped. I'd double-check that though :)

Jack

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Re: Underwater Mortgage:/ Washington State
« Reply #12 on: December 30, 2012, 10:55:02 PM »
Being the huge jerk that I am, I'd inform them that you expect to be paid back for the house down payment. Then I'd invest the money to offset the costs of supporting their penniless asses down the road.

Losing a home to foreclosure/short sale is one thing, but if somebody did that after I'd given them the down payment money I'd find it offensive!