Not so immune.

We had an appraiser come to appraise our house yesterday.  We are in the process of refinancing.  (Interest rates are so low that if you have not financed or refinanced your house in the past year – do it!)  The appraiser did a drive by appraisal of our home a few weeks ago and the appraisal came back way low.  $70K less than the last house that sold in our section of the neighborhood (last summer) and almost $10K less than we paid for our house in December 2004.  Less than we need in order to make our refinancing work for us.  So yesterday, the appraiser came back to see, measure, oogle, gawk and form opinions about the inside of our house.  And maybe to judge my messy family room a little.  At least I made the beds and picked up the dirty clothes – Aubryn did get tubes yesterday!  He asked us straight out how much we need to make the refi work and we told him.  I am crossing my fingers that the number comes back where we need it.

Besides the historically low interest rates, we are refinancing now because we may not be better to do it later.  There are two houses in the other section of our neighborhood (the section built by, in my opinion, an inferior and less prestigous builder) which are short sales.  What this means is that the owners can no longer afford their mortgage.  Instead of foreclosing on the property, the mortgage company will let the owner stay in the house and sell it for less than mortgage left on the property.  The bank takes a loss but does not have to carry the property – banks are really bad at managing foreclosed residential assets.  The bank has to approve the sale, realtor commissions, etc.  Both houses in the other section of our neighborhood are larger than our with all of the bells and whistles (we’re talking three fireplaces, including one in the master bath) and are for sale for less than we paid for our house.  One of those houses is for sale for more than $100K less than we paid.

For those that know me in real life, you know that we tried to sell our house last summer to move closer to my parents’ house and my office.  Although we got three offers, we weren’t able to get the price that we needed and decided to stay.  Now it looks like we’ll need to stay for at least five years.

Before the first of the year, I had lived in a bubble pretty much thinking that we were immune from what is going on in the economy.  A bit naive given what Tom and I do for a living?  Perhaps. I now realize that we are not so immune.  Some of our neighbors are avoiding foreclosure on their houses by selling them at a short sale.  Some people who were just like us in 2004, 2005 or 2006 are now have their credit scores in ruins because they cannot afford their houses.  Are they different from us?  I don’t know.

What I do know is that TK4 and I are incredibly fortunate to both have our jobs.  If you follow legal news, you know that last week saw more than 800 attorneys losing their jobs from firms just like mine.  Another large law firm announced that they are asking their associates to take a 10% pay cut.  Almost every large law firm – including mine – has frozen salaries and virtually eliminated bonuses.

My husband does not exactly work in a stable industry either.  He has seen his company lay off 60% of their workforce in the past 2 years and we have seen his salary reduced by 25%.  We have seen many friends lose jobs.  We are blessed to not count ourselves among them, yet.

So we are not so immune from what is going on around us.  I know that it is much, much worse in other areas of the country but what I see here scares me.  How did we get this way?  When did our nation (our world, really) come to this?  I know that God will not leave us or forsake us and that we should depend on Him for all of our needs.  But some days it is so hard not to worry.  In the end, I know that as long as Tom, Aubryn and I are together and healthy, that is all that really matters.

Published in: on February 18, 2009 at 5:00 am  Comments (4)  

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4 CommentsLeave a comment

  1. we had a similiar thing happen. our appraisal came in $10k less than we needed it to. and $20k less than the realtor estimated 6 months ago. ouch.

  2. saying a prayer for you.

  3. You know, I thought for sure that I was completely immune to what was going on in the economy. For one, I have no money in the stock market, so I do not need to worry about losing anything. Furthermore, I am in school to be a nurse and with the nursing shortage being what it is, I thought it would be incredibly easy to find a job. Apparently, due to the economy, many hospitals in the are are putting a freeze on new grad hires. Which means, they don’t want to hire you unless you have experience. It’s a lucky thing I did an externship last summer because I have one foot in the door. However, I am not guaranteed a job when I graduate which is what was promised to me when I started school!

    I may have to move out of state to find a job. Don’t tell mom and dad yet though. I don’t want to freak them out over something that may not even be an issue yet. PS sorry for the spelling errors.

  4. I hear you with the concerns about law firm layoffs and freezes. Mine’s in that batch. Trying to figure out a safety net in case the income disappears.

    Also making two house payments with no ability to refinance either one after the appraisals were so low.

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