Just A House

Today’s post is brought to you by the letters C, F and D.

C is for Contract, “an agreement entered into by two or more parties with the serious intention of creating a legal obligation.” (i)

F is for For, a preposition meaning, “with the object or purpose of.” (ii)

D is for Deed, “a writing or document executed under seal and delivered to effect a conveyance, especially of real estate.” (iii)

A Contract for Deed is an agreement in which the “seller finances the buyer’s purchase of the property. The buyer takes immediate possession of the property and agrees to pay the purchase price of the property in monthly installment. The seller retains the legal title to the property until the last payment is made and the contract is fulfilled.” (iv)

See also: Notamortgage.

MckMama and MckDaddy have a Contract for Deed arrangement on the Becker house. The CFD was entered into with Mainstreet Bank on 8/28/2009 and is for a five year term, maturing on 8/28/2014. The monthly payment is approximately $3,300 and includes insurance and taxes. The following terms are important to note:

  • The agreed upon purchase price is $485,000 with a down payment of $30,000 due at the time of signing.
  • The entire balance of the purchase price plus accrued interest is due on the maturity date, i.e. a large payment will be due on 8/28/2014.
  • The deed to the property will only be signed over to the purchaser once the contract has been fulfilled. Until then the seller remains the owner of the property.
  • The purchaser is responsible for all real estate taxes and insurance policy premiums.
  • The time of performance by the purchaser of the terms of the contract is an essential part of the contract.
  • If the purchaser fails to timely perform any term of the contract the seller has the right to give 30 days notice that the entire unpaid purchase price, together with accrued interest, is immediately due and payable.
  • If the seller elects to terminate the contract all right, title and interest acquired under the contract by the purchaser will cease and terminate. All payments made by the purchaser pursuant to the contract will belong to the seller as liquidated damages for breach of contract.
  • After service of notice of default and failure to cure such default within the period allowed by law, the purchaser shall, upon demand, surrender possession of the property to seller. (v)

MckMama and MckDaddy do not have a mortgage. They have never had a mortgage on this property. They have not and do not own the property, regardless of what MckMama says. And she has said plenty on the topic recently. (vi)

Man, if we don’t own our house, the bank who sold this to us is pulling the wool over our eyes very seriously! We pay homeowners insurance, property tax, mortgage payments and if we wanted to move, we’d have to sell our home. Those are the things that I consider “owning a home,” wouldn’t you say? (3/15/2011)

You own a home when the deed is in your name. No deed? No home ownership.

Yes, we don’t “own our home” in the truest sense. No one who still have a mortgage truly “owns” their home. It’s not “owned” in that sense until it has been paid off, some 30 years or so after one “purchased” it oftentimes. But we are homeowners in all the other senses. We have a loan for the amount of the home minus our down payment, pay homeowner’s insurance and property tax, pay a mortgage payment to our lender every month, have the right to sell the home on our own, paint, improve the home, etc. But as it is not paid all of the way off, no we don’t “own” it in the literal sense of the word. But in the sense that most other people use when they say they “bought a house,” we do. (9/21/2011)

When you purchase a home with a mortgage the deed is transferred to your name; you own the home. Your mortgage is collateralized by the home but you own the home. Again, no deed, no ownership.

We did end up deciding that keeping that house and trying to save the equity we have in it through keeping renters living there or whatnot is just not going to be worth the effort and risk, especially without any inkling of a promise of if or when the housing market will bounce back. It was a big decision, but it’s one we’re glad to have made. Thankfully, with the type of mortgage we have on the house, we’ll be able to let the house go rather easily. While we’ll lose out on the money we put down on it, which is a huge bummer, we won’t have the constant worry and wonder of keeping up with the mortgage every month. Not having to default on anything or foreclose is a blessing, too. (9/21/2011)

Did you “decide” or did you become unable to meet your monthly housing obligations? You do not have a mortgage; you have a CFD. “Letting go of the house,” is not an option given to you in the CFD. Breach of contract is the correct terminology here.

Thankfully, we are going to be able to get out if our home in an upstanding way, leaving noone in the lurch. (9/21/2011)

Reneging on your contractual obligation to the seller leaves the seller in the lurch, with a home that must now be repaired and maintained, as well as property taxes that must be paid, in an economy that is not friendly to selling what once was a half million dollar home.

This is the third time that the McKinneys have “decided” not to abide by their contractual obligations, the terms and conditions set forth by the banks that entered into real estate agreements with them. The third time. The first two homes were purchased with mortgages and ultimately ended in foreclosures. Since they could not qualify for a mortgage with tax liens and judgments on their records the third home was a contract for deed, and now they are breaching that contract as well. They have spent $110,000 on a down payment and mortgage, interest, taxes and insurance payments for a house. This is not a case of making a poor judgment call and learning from it the next time around. Instead it would appear that they have learned nothing from their past financial mistakes and are determined to keep repeating them.

Yet MckMama continues to pretend that all is well, that this was a choice they made, that they’re intentionally downsizing, that it’s okay to “give back” the house. The only thing that they’ve really made is one poor financial decision after another, until they’re in so much debt that they have little recourse.

I don’t know why I’m surprised at MckMama’s blatant lies but I always am. For a woman who claims to be a Christian she certainly does not espouse the teachings of Christ. Her deceptions, outright lies, intentional misleadings and manipulations are so transparent at this point.

Ye shall know them by their fruits.   Do men gather grapes of thorns, or figs of thistles?
Matthew 7:16, KJV


Sources Cited
(i) Wikipedia
(ii) Dictionary.com
(iii) Dictionary.com
(iv) University Of Minnesota, Extension
(v) Contract for Deed signed 8/28/2009
(vi) All Quotes by MckMama

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