Tomorrow, March 25, I'm closing on the house. The title company has the money, my sister has my power of attorney, and all is set; tomorrow I become a landowner again. But there's something I don't understand, now that I've seen the HUD document detailing the financing of this deal.
John Fitch bought this house to form the Renaissance House in 2003, financing $54,000. I very much doubt he'd paid more than he had to. So five years later, I can't imagine he owed less than $50,000 or so. Following me?
Of the $8000 changing hands tomorrow, $2500 goes to the realtor, $700 to a property management company (coincidentally also the realtor, but that's not the point), $500 to a listing placement company, etc. etc. The actual current holder of the mortgage will be getting a tad over $4000 for this magnificent structure.
So here's my question. Given that this is more than a 90% loss -- why? Why would they foreclose? Is this one of those "pennies on the dollar mortgage purchases" one reads about? Who benefits?
Because somebody thought this was a good idea. The realtor clearly thinks so, with reason. I think so, because I get a cheap house (actually, Renaissance House may end up getting the use of the building for a year or two; we'll see). But the original holder of the mortgage?
Somebody's really insane in all this. And it seems indicative of the whole economy.