First the bad – last Tuesday morning my lawyer handling the contract side of the sale of my parents’ house called me shortly after 9 am. The buyer had backed out of the contract due to an inability to obtain financing. That has to suck for them as they paid for the home inspection, oil tank inspection, and septic inspection, plus lawyer’s fees. That sucks for me since the Reverse Mortgage is considered to be in default as of 7/23/11 – a mere 2 weeks away.
I called the Reverse Mortgage company that afternoon to discuss the situation. I was advised to send a letter explaining the situation and requesting an additional extension. The terms of the loan are that it is due 6 months after the last borrower no longer lives in the house. There can be 2 extensions of 90 days each granted. We got both of those extensions already. Apparently, the rules are not the bank rules, but dictated by HUD who oversees and/or backs these loans. In retrospect, I wish that I had known what my father’s assets were in more detail. Had he simply withdrawn money from his IRA and investments to pay expenses, much of them to have Visiting Angels care for mom, I wouldn’t have this headache. He was overly concerned about having to pay income taxes on withdrawals, so he only took the required distributions and rarely cashed any Savings Bonds. And, sadly, the reverse mortgage allowed him to spend money like crazy on the scams and honest requests for donations he was constantly bombarded with via the mail that I fought with him over on a regular basis. Ah, well… Anyway, there is a very good chance that another extension will be granted rather than allow the loan to go into default and the foreclosure process beginning. I am, after all, doing everything possible to sell the house for a fair price and it is valued much more than the outstanding loan balance. Apparently the bank reviews the request and associated documentation and submits it to HUD for review and approval.
Despite the loss of the buyer I still needed to continue with the oil tank replacement and the new septic system. On Friday it was time to put the new oil tank in the garage and remove the old one from the ground. The risk was that a leak would be detected and I’d need to pay for mitigation of the leak at a minimum cost of $10,000. The good news is that it was in good shape. The failed tightness test had to be piping related. There is a nice new tank in the garage now and the front yard is a mess, but the new tank is going to be a good selling point for the house. An expensive risk has now been dealt with.
I had received a ballpark estimate for the new septic system of between $11-15,000 plus engineering and test fees. I paid $3,000 for the latter, which included an unexpected $700 for a survey, since there was no recent survey available. I was waiting with baited breath for the actual price for the work. I received the application and plans last Thursday and submitted to the town Friday along with the $100 permit fee. The contractor also received a copy of the plans directly from the engineer. I called the contractor yesterday and received the firm price of $9,850 for the new system. Hooray! There will still be additional cost for a plumber to disconnect the old laundry sink and add a drain for the washing machine. At the same time I’ll have them fix the toilet in the half bath which is not tight to the floor. I expect the septic work to happen next week.
In the meantime, the house is back on the market. The realtor is hoping to have an Open House this weekend.
http://www.coldwellbanker.com/property?propertyId=210567434&mode=detail&brandType=CB
Spaces, One Frontier 