Dear Bank — Can I buy my own short sale house?

Dear Bank President:

See here’s the thing. Like much, if not MOST, of the country, the value of my house has dropped substantially. So has my income, but I’m STILL WORKING! Of course my income is now only about 2/3rds of what it was when I bought my house because I had to take a cut in pay to keep my job.

But I’m STILL WORKING and I’ve never missed a payment. I’ve now built up all of my credit cards to their limit and raided almost 100% of my 401k so that I can make my mortgage payments, yet I’ve NEVER missed a payment.

But the ratio between my mortgage and my house value is laughable. I’m so far upside down, I might just as well keep tunneling. Maybe I’ll end up in China like my Momma used to say.

And my friend, the very educated and talented REALTOR, says that the best way for me to get out from under this mess is to short sell my house because, like my income, it’s only worth about 2/3rds of what I paid for it five years ago. I even consulted with that real estate attorney who says maybe I should just let the house go back to the bank.

But, you see, I’m a responsible person. I make a commitment and I stick to it. Again, let me stress, I’ve NEVER MISSED A PAYMENT! It won’t be long now though. I just can’t continue to make payments at that fantastic 6.8% interest rate I had five years ago.

Here’s my proposal: My income supports a purchase that’s 2/3rds less than the current mortgage on my house. And interest rates have dropped below 5%. I CAN AFFORD THAT! And I can save you thousands of dollars and all of us can come out of this without egg on our faces and tons of embarrassment if you’d allow me to just buy back my own short sale property. Well, technically we shouldn’t have to go all the way through the short sale process. That’s messy, lengthy, expensive, and totally unnecessary!

So let’s do this: You process your own unbiased and fully researched Broker Price Opinion and I’ll pay for the appraisal. And then we’ll agree that the value of my house is 2/3rds of what it was. And then you’ll rewrite my mortgage/loan for that number at the current interest rate of less than 5%.

You’ll save money. You’ll not have yet another house sitting in your “bad loans” portfolio. And I’ll get to stay in my house and continue to maintain it, thus saving my neighborhood from further decline and dropping my house value even more. And my credit score will stay reasonable since we won’t have to go through all that “miss a payment or two or three so we’ll look at your short sale offer” business. My kids will continue to grow up in the same house at the same schools with the same friends in the same neighborhood, thus continuing to contribute to their sense of security. (We need these future secure workers to pay for their own houses and cars someday, thus helping to ensure your bank’s longevity.) We’ll all be winners.

How about it, Mr/Ms Bank President? Doesn’t that make loads more sense?

Sincerely,

Struggling Homeowner
i.e., Your Next Foreclosure Client