And Neither Have We

Well, the bigoted Asset Manager for the home we have in North Birmingham (the one where the bank called the second mortgage due) has gotten back to us about our super-awesome short sale offer. As you may recall, we have someone willing to pay $58,000 for our home.

Unfortunately, what the bank had to say was they they will only do a short sale if I agree to give them close to $30,000 upfront and sign a promissory note for the remainder. Now for those of you confused on what a short sale happens to be, it is when the bank agrees to take an amount less than the amount owed because the value on the property is lower than the amount owed.

So, asking us to pay the difference in cash and a promissory note defies the entire purpose of the short sale in the first place. In fact, before we even started this process  I spoke with the Asset Manager to verify we were on the same page. My first clue there might have been an issue is when he said last April, "I just pulled up your credit. You are never going to convince the bank with credit like yours that you can't pay." I should have gone with my gut. However, I do recall speaking with Mr. Asset Manager at the time who assured me in no way did the bank want a foreclosure. After all, then they have to sell it.

And now, here we are. Today I showed the Asset Manager's e-mail to all the major players. Kirby assures me they are bluffing and will cave. When I first got Legal Owl involved today, she suggested I play along to buy some time. But after more billable hours deliberation, we decided to just tell the bank to go ahead and foreclose. Our credit is now crap anyway. We don't have the money and it won't change if I sign a promissory note or not. And frankly, I don't want to promise to pay more money that I can't necessarily follow up on. So Legal Owl wrote a lengthy missive that boiled down to "Go ahead and deny this, I've got nothing to loose." I signed off on it and sent it on is as my own.

Not three minutes later the Asset Manager wrote back that I really needed to reconsider. It will wreck my credit (so will a short sale), I need to talk to an accountant because there are some tax implications (done) and a string of other things that sound like what you might tell a small child when you want them to do something they really don't need to do. The gist was I was making a grave mistake by not agreeing to give them money upfront and pay the rest later. He wrote a good letter until the end when threw this gem at me,

"We could foreclose and that would probably resolve the issues above. Believe it or not,  I have never done a deed in lieu. I am not sure how to handle that."

Yep. That's the crux right there. He doesn't know what to do next. Guess what? That makes two of us. 
 

Reflecting

It infuriated me beyond belief when tenants would say, "I don't have the rent," and then stay in my house. Or, they would be short every month, but when I came to Alabama, they would have furnishings or toys much newer and nicer than mine because furnishings and toys are more important than paying for a place to live. I consider the contract to rent a home to be binding. I do my part, and I expect the person signing to to theirs.

I have been known to call these folks deadbeats, losers or worse. Some of them still make my jaw clench when I think how they stayed in my home, letting me (at times) work two jobs just so we could pay the mortgage company and the lawyer to evict them.

We work for what we have and we expect those on the receiving end to act accordingly. Yes, we have had some nice vacations, but they were paid for with cash. Ahead of time. I bring this up, because one tenant who was squatting in my home actually suggested if my family hadn't gone to California one year, we could have afforded her not to pay the rent. So it was our fault.

The reason I bring this up is because we are doing the same with our mortgage companies. Essentially we have become the deadbeats or losers. I struggle with this daily.

Marty Sunshine suggested it isn't remotely the same. When our situation became the reality it is, we told the banks immediately. We offered them the homes upfront. But they didn't want them. I understand our reason for going this direction was strategic. But then, one could argue, our tenants' reasoning for staying in our homes long past when they should have left could also be deemed "strategic."

In return for us breaking our contracts with the banks, we will be sued. There will be a judgement against us. We are unable to get loans for just about anything for years (if we want loans). We can't get a new mortgage any time soon either. My credit score alone has dropped 73 points in the past eight weeks. Marty Sunshine (whose name and credit is tied with more of these delinquent loans than my name), doesn't want to know how far his score has plummeted. Eventually--when the dust settles--we will most likely file bankruptcy. All because of a situation we couldn't control. Or didn't control properly. You pick.

But I don't see how I can call the people who did this to me deadbeats without looking in the mirror and seeing the same.

We Got His Attention

If you are a long-time reader of this blog, you might have gotten the impression Mr. Partner is rough around the edges. He is. He is also a savvy landlord and I have learned a lot from him through the years.

The biggest challenge we have faced with Mr. Partner is his memory has holes. We were rocking in the early years of the accidental business. Just rocking. He thought I was a genius. Heck, I thought I was a genius! Our business plan was spot-on and everything was going swimmingly.

And then it didn't.

And Mr. Partner didn't seem to comprehend "We have 12 vacancies, a dead water buffalo heard rotting the basement of one home and the FBI is zeroing in on a potential illegal Romanian gambling ring in another house." The crazies--and I promise you every story I write on here is true--started piling up and 1) a blog was born and 2) we ran out of money. Fast.

When approaching Mr. Partner with financial drama, generally what I would hear from him was, "Why did this happen? It wasn't like this back in 2007."

This is where it got interesting. Marty Sunshine and I always contributed first when I noticed our business bank account was running low. After a few months of financial juggling, we would ask Mr. Partner to match our contribution. Instead of just agreeing, or asking something reasonable, like how much did we contribute and when, Mr. Partner would ask for bank statements. He would then point out that our account on the first of the month had lots of money in it what happened to the money? That's true, but once the bills are paid, the money was gone.

Mr. Partner would also ask for income statements and balance sheets. Let's be fair, he is owed these items. They were also provided to him regularly. He didn't want the regular ones, but he wanted up-to-date numbers that did not reflect reality. Because financial statements tell viewer of what happened before, not what is happening right now.

However, in order for him to commit to putting a penny into the bank account, which was usually on the brink of us bouncing mortgages, he would insist upon seeing these reports. I would always call Bliz, beg her forgiveness, ask her to drop everything she was doing and please make the financials current and send them over to me. Then, once she sent everything, I'd pass it along to Mr. Partner who would scrutinize it and ask why we spent so much on dead water buffalo removal and couldn't we have found someone trustworthy to do it for $25?

Also, for those of you not familiar with balance sheets, the Owner's Equity category is a negative number. This always throws Mr. Partner because his negative number is closer to zero than ours. So, in his mind, it was he who put in more money. And again, before he would commit to making sure nothing bounced, Marty would have to explain this concept to him. The reason Marty did this is because I got to the point where I could not speak civilly to Mr. Partner.

In all fairness, Mr. Partner would always oblige, match our contribution and say things like, "This will be the last time I ever give another dime to this LLC."

One time, when I knew we were on a fast track to bouncing every mortgage payment, I sent him a saccharine-sweet note, letting him know that if he didn't match our contribution immediately, it would be the homes in his name where the mortgages weren't paid that month. And that was fine by me. Another time, I may have accidentally on purpose not paid the property taxes on a home with the mortgage in his name. But hey! We didn't have the money and Mr. Partner was being stubborn.

This tenuous relationship has lasted for years. Marty--bless him--has always been the peacemaker between Mr. Partner's obnoxious insinuations that I have run the company into the ground and me promising a painful and cruel death for the man if he didn't do his part. And, there has been more than one occasion where I have pointed out to him that I go to Birmingham on my own dime (at his request) and I take the calls, shield him from the plethora of drama and a LOT OF OTHER STUFF HAPPENS because I do it and he doesn't. And I am willing to trade jobs with him any time.

In the past six months or so, things have shifted. When we came to Mr. Partner and explained the bank called the mortgage due for our home in North Birmingham and the home in Pinson is beyond reasonable repair he listened. We then told him Marty and I were willing to let the homes go. It would be our credit trashed and we would probably have to file bankruptcy to clean up this mess. Though we weren't excited about this prospect, we had consulted a lawyer and a few other experts (on the LLC's dime) and it appeared it was the only recourse we could see to solve this mess. The banks weren't going to play and we did not have the money anymore.

Mr. Partner offered to help out with whatever financial necessitates were needed. And we appreciated it. But it didn't change the realities. This wasn't something we could just write a check to fix. We asked him to think about if he really wanted to do that. And he asked us if we were really sure we wanted to "strategically downsize." We were sure. And frankly I think Mr. Partner was sure too.

Since then, Mr. Partner has been very conciliatory. "Anything you need," he has told me almost weekly. When I warned him the insurances were due this month and it was usually Marty and I who handled this, he said not to worry, he'd cover it.

A couple weeks ago, the three of us went to lunch to discuss the state of affairs. I made a few jokes about our credit being shot and our impending financial meltdown. I joked because at this point, one can only wallow in the miasma of doom for so long. It is the decision we made. And so far, I feel it is for the best. I realized afterwards my comments made him uncomfortable, but that was certainly not my intention. But that said, it seems that Marty and I being willing to let these homes go to get this monkey off our back has certainly made an impact on him.

Functional Dysfunction

Every July, since the first year of our accidental business, most of my home owner's insurances happen to be due. Don't ask me why, but the majority of our gazillion homes we bought through the years were purchased in July. So here we are.

Also, because of strategic business decisions of years' past, we pay several of our insurances (and taxes, but that's December's issue) out of pocket. And, because we have a gazillion properties, traditional insurance companies stopped insuring us long ago. So five of our homes happen to be lumped into two commercial insurance policies.

This is where it gets a bit messy. Unfortunately three of the five homes in these two policies are homes Marty and I own without a partner. In the event you aren't completely confused and are still reading this: one policy holds three homes (two are Marty's and mine and one belongs to the LLC we have with Mr. Partner) and the other commercial policy holds two (one is Marty's and mine and one happens to be the home we have a short sale on--but it is in Mr. Partner's LLC).

Additionally, paying these two clunky policies is a bit of a chore. The money can't be co-mingled. So the Solo LLC can't pay Mr. Partner's LLC's policy without a lot of excessive journal entries and insanity Bliz just hasn't signed up for.

There are other insurance policies on our other homes out there, but these are the two policies tend to be most maddening. Once upon a time when Bliz had more free time, she would patiently sort through this, figure out which home's policy cost how much and then pay these particular bills for me. But one year she gave me some veiled threat of mutiny and a quadrupled hourly rate if she had to figure out how to disperse the money for these five homes.

So, this job is now mine. And now every July I have to dedicate several hours to figure out the login to the insurance Web site and guess at the password (because it is something unconventional like !obn0xious1) so I can actually read the policies and decipher the payment amount per home. It takes less time to read the entire Harry Potter series than figure this nonsense out.

I have to tell you, it would be genuinely nice if the insurance company would actually just mail me the policy and the bill like I have repeatedly requested. But, they don't. It is a fight I fought and lost. And at this point, I know what to do, where to look and just have adjusted my life accordingly.

Then there is Mrs. Sherwood's home's policy. This policy is from a different insurance company and they never send me a bill either. And again, I have asked and got tired of loosing this battle. There is only so much rejection I can handle in one month. But to their credit, they do send me a cancellation notice if I don't pay it. There have been numerous years I have had to call the insurance company begging to be reinstated (and suggesting if they had sent me a statement in the first place I would have taken care of this). Ironically, the only other time they send me a bill is after I send them $300 or so around July 12. Only then will they let me know exactly how much I really owe.

The biggest challenge with this process is, of course, that we are under-capitalized And, when one has under-capitalized issues, paying several thousand dollars of home owner's insurance is a bit of a challenge. So every summer we start a campaign to scrape together the money. Generally Marty and I make up the difference in July and Mr. Partner handles the money for the taxes in December. It is a simple dysfunction we have all grown comfortable with.

However, this year things were different. After I settled down last week do figure out what needed to happen, I discovered we had just enough money in the LLC to cover our insurances! You know, the way it should have been all along if things had gone smoothly. Sadly, the reason the money was there  this year to begin with was because we aren't paying for the two homes we are giving back.

The Non-Relationship Manager

The home where we are doing a Deed in Lieu of Foreclose (the house in Pinson with the charming wrap around front porch, for those of you keeping track) has a first and second mortgage. The process is maddening. There are times I feel like dealing with it, and times I don't.

We have been in contact with both mortgage companies since the beginning of the process. This has not stopped the second mortgage company from calling us twice a day, which they do. Last week, when they called for the first time one day, I needed to talk with them. You see, they had sent us a certified letter that we opted  not to accept. So, I wanted to find out what they wanted.

When "Mark" called last Thursday, I was in a cheerful mood. As soon as he identified himself, I said, "I am so glad you called. Would you please put me through to the asset manager. I need to speak with her."

At which point, Mark put me into the main phone system where a computer admonished me for being late, told me how much I owed and told me they would like a payment immediately thankyouverymuch, and if I wanted to speak with a human being, please press 2.

Apparently my relationship manager (Laury, whom I have yet to speak with), was unavailable but someone named "Agent 26" came on the line. Still being somewhat cheerful, I was totally taken aback by Agent 26's demeanor. He was downright hostile. He pointed out I owed money. Why wasn't I paying it? Seriously, it is a second mortgage and can't I just give up my "daily Starbucks addition" and manage my budge better so that I can pay them the money I owe?

This was all before I even said why I wanted to talk to him.

By the way, I don't drink coffee, nor do I frequent Starbucks.

I didn't give him a sob story. I won't. But I told him the truth (because he finally asked why we hadn't paid): the tenant moved in, didn't pay, trashed the place and fought the eviction. We drained our savings trying to pay the mortgage and pay the attorney on the house where these deadbeats lived. We don't have the money to fix it up. That is the truth. All of this I conveyed with as much of a pleasant professional demeanor as I could muster.

Agent 26 replied, "So this is a short-term problem and we can expect your payment when?" And at this point there was really no reason to continue with the call. The two points of interest I did gleam from this guy was they will not do a Deed in Lieu. Nope. No way. No how (then we will go straight to foreclose--but there was no point telling him). He also told me the second mortgage company plans on suing us. Which I pretty much figured out by the twice-daily phone calls.

I never did get around to the crux of the call (what was in the letter they sent?). Nor did I say what I really wanted to tell him, which is: "Do you think after owning this home for 11 years we want this??" Frankly, Agent 26 wouldn't let me talk anyway. And by that time, I really didn't want to.

We're In The Money

So Kirby has sent me another offer for our short sale. This phenomenally wonderful offer is for $58,000. Sadly, this is a full priced offer. Hopefully the bank will be as thrilled as we are.

This Is A Fine How-Do-You-Do

Last summer I helped Kathy and Tony find a lovely rental home. The home in question is a modest three bedroom stuccoed home in East Mesa. The house isn't in property management, but it self-managed by the out-of-state owner.

I should explain--because it might give you a bit of context--the way the system in Arizona works is that I show the house, the folks interested put an application in and if approved, a few weeks later I get a check that equates to about $4 an hour for my time. So, I don't know who the owner is. I don't write the lease. And I don't have any details about the lease.

Fast forward to this week. Kathy called me. You see, her lease states that she is to deposit the rent money directly into the owner's bank account. Apparently, her lease also gives her the owner's phone number to call if anything happens. But the lease does not give a few other vital tidbits: like the owner's e-mail address or a physical address. Just in case.

After all, what could possibly go wrong? Right?

If you happen to be one of my three readers, you will be snickering to yourself, because you know that something wrong happens in situations like these. In this case, when Tony went to deposit the rent money last week he found out the account was closed. While standing in line while the Wells Fargo teller waited patiently, Tony called the phone number he had for his landlord only to find out it was disconnected. And after probing a bit farther with the teller (who could have just told him this to begin with), it turns out the owner is deceased.

And that's when I got a phone call.

Technically, Kathy and Tony have not been officially notified about the owner's death. In fact, after I dug around on the ole' Internet for a while I found out that 1) the owner had resided in Miami Florida, 2) He died in January, 2015 and 3) it was a "tragic death", though I don't have any real details about it. I can also tell you he was self-employed and had heirs.

There are legal reasons I don't want to get involved with this. It isn't that I don't like these folks, but there are legalities associated with my real estate license, so I am not advising them. However, I have told the where to go for the information they are seeking. I did tell them if it were me, I would hold on to the rent money and not to spend it. They owe the money. But then again, they are owed their security deposit when they leave if they have fulfilled the terms of the lease.

I called Kathy today to follow up her and see how she was doing with her new news (I was morbidly curious). At this time they have decided to stay--though their lease is up at the end of July. Their thinking is that someone will eventually officially notify them, whether it is a family member, the bank telling them the home is in foreclosure or a probate court.

They are also setting aside the rent money so that they can show they have tried to pay it. They have written a statement, attached it to this month's rent, saying the owner had refused to give them his address or any way to get in touch with them other than a disconnected phone number. They put that in the same envelope as the rent. I am not advising them on this one, but I did tell them to call me when they are ready to find another home.

So, fellow landlords, it might be a really good idea to give your tenants a few ways to contact you. And, it might be a good idea for your heirs to contact your tenants in the unlikely event something unfortunate happens to you.

Happy Independence Day

Here's a little ditty about perspective.

The Greatest

And The Game Continues

I am pleased to say I got the banks to stop calling my cell phone at all random hours of the day. In fact, there is now only one bank who calls us. Every day at 8:36 a.m. Depending upon my mood, I will speak with them. Though I have talked to the "asset manager" there a couple of times and am not sure why we aren't on the same page. We are on the same page with all the other mortgage companies. I am kind of impressed though. This company has the least stake in the game and they are fighting hardest.

The calls are always from someone who sounds like he or she is working in a call center. Their accent is thick and not an American English dialect I am familiar with. In fact, in whatever call center training they are getting nobody has told them about American English colloquialisms. I once asked one of them where they were originally from and she named a city I later figured out was "Santa Fe." She pronounced it "San-te-a-fe-a."

Lately, the calls are pretty standard. They announce who they are (today was Travis). They ask if I am who I am. I always reply with a dull, "Can I help you?" and they continue on with their script. About two minutes after they come up for air, the next time I am to interact with them is when the poor unassuming person on the other end says, "Is this a good time to talk."

I always answer "No," and they promptly ignore me and proceed to the crux of the call. It has to be part of their script, because they all say the same thing, "I have very important information to share with you about your mortgage. Will you verify your social security number please?"

At this point, I will either say a few random things. Usually I just say No. But I have been known to change it up once or twice and ask if they would like to give me their social security number first. Every time I do this, the person on the other end gets flustered. Yesterday she ("Jane" or "Jean") said, "I don't think you need my number." When I refused to give mine to her, she then asked for my address--which I did provide. Much to my surprise, Jane (Jean?) announced I was wrong.

Then Jane (Jean?) said that I was to get the real Mrs. Landlord to call her back because I can't verify who I say I am.

Today when I talked to Travis, before he could get to the part where he asked my social security number, I interrupted and asked for an asset manager. I have spoken with asset managers at this mortgage company before. Today's request was going to be to have these yahoos stop calling. Period. Sometimes when I ask to speak with an asset manager I am told there is nobody there with that title. One person offered me the call center floor manager. "Do they have the authority to make decisions about my loan?" I asked. No. They didn't.

However, Travis seemed to have his A game on. He offered to transfer me to the person I wanted to speak with. I told him she was assigned to my case and I would be happy to discuss this with her. After waiting on hold for a few minutes, I was told no asset manager was available but Travis' boss would talk to me. And then "Mick." was on the phone. His first question was to ask who I was, and why I was on the phone with him. "Your company called me. Don't you know?"

Apparently he did not. We went a few rounds of this before we parted ways. But no matter. This mortgage company will call later today: at 2:17 p.m. and then again tomorrow at 8:36 a..m. where we can have another go.