My cost of living just went down

Turbo_pro · 04-20-2010, 07:10 AM

In an effort to deal with changing times, I looked around and found cost savings in my home.

First I sot a reduction in my property tax assessment. Since my home was purchased at a relatively high point in the market my assessment reflected that value.
I filed a request for a reevaluation and was promptly denied. The next step was an appeal. The county set a hearing date and I started preparing my case.
I amassed a collection of comps, articles on price decline in my area and a collection of similar houses for sale in my area.
One week before the hearing the appeals board contacted me to work out an agreement.
I presented my case to the representative and she presented hers.
Needless to say, I prevailed at reducing my property tax by nearly 50%.
My request was filed for two previous years and when all was said and done the county cut me two checks and credited my tax account for the first installment on this years tax.
The new tax figure will reduce my living expenses by over $ 280 per mouth.

Next was to deal with the reduced equity in the home.
I contacted my bank some 18 months ago with a proposal to modify my loan. Because the home was not in default they reject my request immediately.
So I filed a different request.
After nearly 13 months of screwing around (4 separate offers), I told them they could have the house.
All of a sudden they started talking.
When all was said and done I ended up with a 20% principle reduction (added as a no interest, balloon payment) and a 4.5% interest reduction to just over 3%.
I now have a loan fixed at 3+% for the life of the loan. No government program (programs don't fit jumbo loans) and a $1,290 payment reduction.
I'm thinking I should right a pamphlet.

Your bank will screw you if they can so stand your ground and roll the dice.

EarlyPorsche · 04-20-2010, 07:15 AM

That is wonderful.

In terms of principle reduction - what was your argument? I feel like a bank will just say "hey you made the choice now be responsible for it."

In terms of your credit - did they ding your credit at all? How much was the jumbo loan for?

Cdnone1 · 04-20-2010, 07:27 AM

I guess I'm missing how the bank was screwing you by not volunteering to rework (in your favor) a contract you, I assume, legally signed.

I can understand you wanting to reduce your costs. I can understand how you bought at the peak of the housing market and wanted your taxes re assessed, but I can't understand what the bank was doing to screw you.

I've made a couple of bad investments, but I always figured it was me that made them and was responsible for my own decisions.

Steve

Turbo_pro · 04-20-2010, 08:27 AM

Quote:

Originally Posted by EarlyPorsche

That is wonderful.

In terms of principle reduction - what was your argument? I feel like a bank will just say "hey you made the choice now be responsible for it."

In terms of your credit - did they ding your credit at all? How much was the jumbo loan for?

Remember it wasn't a principle reduction. The principle is the same, just some of it is deferred without interest. The argument was simple "I can buy the same house for less and you don't want this house". The deferred principle was their idea. I wanted a principle reduction and we compromised.
There was no credit damage at all. Never missed a payment. I will say that I don't really care about FICO scores and some arbitrary judgment about my credit worthiness. I think that is all a scam. If I can't get what I want without the approval of some $12/hr bonehead, I will just forgo that purchase. I will tell you that rarely happens.

Quote:

Originally Posted by Cdnone1

I guess I'm missing how the bank was screwing you by not volunteering to rework (in your favor) a contract you, I assume, legally signed.

I can understand you wanting to reduce your costs. I can understand how you bought at the peak of the housing market and wanted your taxes re assessed, but I can't understand what the bank was doing to screw you.

I've made a couple of bad investments, but I always figured it was me that made them and was responsible for my own decisions.

Steve

The bank wasn't screwing me on this loan. That's not what I said. I said bank will screw you if they can. I have one credit card that arbitrarily went from just over 9% to something over 20% for no apparent reason. When I called the bank they said their criteria had changed. I paid it off and don't use that card.
It was a simple business transaction. I convinced them that they loose if they foreclose.
I convinced them that I was willing to walk, where in actuality I was not.
They did the math and negotiated a deal that works for both of us.

Remember that the contract was set with requirements that we both agreed to. One of the agreements was if I stop paying, they get the house. My $200k down payment is of course gone but even with that the bank wins if I stay.

04-20-2010, 08:47 AM

Sounds like both a principal reduction and a principle reduction happened here.

nostatic · nostatic's Garage

Quote:

Originally Posted by Turbo_pro

First I sot a reduction in my property tax assessment.

-----

I'm thinking I should right a pamphlet.

hmm, maybe not

McLovin · 04-20-2010, 09:05 AM

maybe it's a text message pamphlet.

nostatic · nostatic's Garage

srsly?

Turbo_pro · 09:24 AM

Quote:

Originally Posted by nostatic

hmm, maybe not

So just so I understand, you find no value in the post that can excuse some spelling errors.
WTF

Many people are completely up side down with their home loans and I offer hope for them and you idiots whine about spelling.
FO

masraum · 04-20-2010, 09:20 AM

Quote:

Originally Posted by Turbo_pro

First I sot a reduction in my property tax assessment.

I'm thinking I should right a pamphlet.

Quote:

Originally Posted by nostatic

hmm, maybe not

Quote:

Originally Posted by McLovin

maybe it's a text message pamphlet.

Quote:

Originally Posted by nostatic

srsly?

You guys kill me, I love this place.

masraum · 04-20-2010, 09:24 AM

Quote:

Originally Posted by Turbo_pro

So just so I understand, you find no value in the post that can't excuse a spelling errors.
WTF

Many people are completely up side down with their home loans and I offer hope for them and you idiots whine about spelling.
FO

Wow, so hostile. It's a joke. You make a pretty big spelling mistake, and then mention that you should write a pamphlet. In a way, that's pretty funny.

No one said that the info that you were providing was crap. The info that you provided was interesting.

I'm wondering about tax rammifications of your principal reduction. Will that be looked upon as partial loan forgiveness which is taxed like income or capital gains, or because it's a balloon payment at the end, will it not be an issue until then?

Fortunately, I'm ok on my house, but congrats on the good work.

VenezianBlau 87 · 04-20-2010, 09:25 AM

Quote:

Originally Posted by madcorgi

Sounds like both a principal reduction and a principle reduction happened here.

Eloquent, sir.

McLovin · 04-20-2010, 09:27 AM

Quote:

Originally Posted by Turbo_pro

So just so I understand, you find no value in the post that can't excuse a spelling errors.
WTF

Many people are completely up side down with their home loans and I offer hope for them and you idiots whine about spelling.
FO

What's the big deal about being "upside down" on your home loan? Isn't your monthly payment still the same?

If housing continued to skyrocket, would you have shared that upside with the bank? Do you think it would have been fair for them to demand you change the deal so they could get the upside?

What kind of constitutional patriot are you?!?

nostatic · nostatic's Garage

Quote:

Originally Posted by VenezianBlau 87

Eloquent, sir.

and maybe a bit too subtle for some

EarlyPorsche · 04-20-2010, 09:29 AM

Quote:

Originally Posted by masraum

Wow, so hostile. It's a joke. You make a pretty big spelling mistake, and then mention that you should write a pamphlet. In a way, that's pretty funny.

No one said that the info that you were providing was crap. The info that you provided was interesting.

I'm wondering about tax rammifications of your principal reduction. Will that be looked upon as partial loan forgiveness which is taxed like income or capital gains, or because it's a balloon payment at the end, will it not be an issue until then?

Fortunately, I'm ok on my house, but congrats on the good work.

AHHHH OH NO!!! Spell check if you're going to make fun of spelling, people!!!

speeder · speeder's Garage

Quote:

Originally Posted by Turbo_pro

So just so I understand, you find no value in the post that can excuse some spelling errors.
WTF

Many people are completely up side down with their home loans and I offer hope for them and you idiots whine about spelling.
FO

That's not a spelling error, amigo. That's using a completely wrong word because it sounds like the word you meant. Reading your/you're/yore schit is like following the crawl on the bottom of a TV set in a loud bar.

speeder · speeder's Garage

Quote:

Originally Posted by McLovin

What kind of constitutional patriot are you?!?

The usual kind. Hypocritical and not too art-smay.

Turbo_pro · 04-20-2010, 09:41 AM

Quote:

Originally Posted by masraum

...snip...

I'm wondering about tax rammifications of your principal reduction. Will that be looked upon as partial loan forgiveness which is taxed like income or capital gains, or because it's a balloon payment at the end, will it not be an issue until then?

Fortunately, I'm ok on my house, but congrats on the good work.

There is no forgiven amount, it's just deferred. No tax issue as far as I can see.
Look at as a lien on the property.

Congratulations on being right with your loan, many people aren't.

Quote:

Originally Posted by McLovin

What's the big deal about being "upside down" on your home loan? Isn't your monthly payment still the same?

If housing continued to skyrocket, would you have shared that upside with the bank? Do you think it would have been fair for them to demand you change the deal so they could get the upside?

What kind of constitutional patriot are you?!?

The payment is $1,200+ lower.

The terms of the contract were clear and they had a right to negotiate or not. Like any other contract.
My rights and theirs were not compromised. They had a secured loan, secured by property and a $200K down payment. My legal options under the terms of the contract were to pay the loan as specified by the contract or default. Default is a perfectly legal and moral option under the contract they wrote.
We came to a mutually beneficial agreement. If /when the property becomes more valuable the bank wishes to exercise an option in the contract that benefits them, I'm certain they will. That's business.
What's your problem with that?

DARISC · 04-20-2010, 10:05 AM

Quote:

Originally Posted by Turbo_pro

...you idiots whine about spelling...

Your right (and your left also).

We've all mispelt words.

There shall be no excuse for tipos.

Oosp!

Ignore that fiat if referring to a Fiat.

Thank you.

EarlyPorsche · 04-20-2010, 10:06 AM

I think what you did is amazing. This is business and if you can do it go ahead. I would bet that 99% of people cannot do that since the economy has been rebounding but still is nice when it happens. A total savings of $1400 a month will be nice for you.