Upside Down – The Story of My Mortgage

Ahhh…the joys of being a homeowner. The maintenance, the cleaning, homeowner’s insurance, the (pain in the ass) HOA and of course…the mortgage.

Even though it’s not Wednesday – I’d like to confess something to you all…

My name is Michelle and my mortgage is upside down.


The hubby and I built (well, a builder did) our house at the height of the market in 2005. We had just moved from Tallahassee where we had bought and sold our first house (for a profit! That $$ was shortlived – Ha). There was minimal housing in our area. Most apartment complexes were turning into condos and there were very few house to rent. We thought we were being smart. Hmmm… looking back I think it was the dumbest thing we’ve done yet. Live and learn, right?

When we first moved in, the value of our house actually jumped up by about $30k. Yay! we thought — we did the right thing! WRONG. The housing market CRASHED about 8 months later and in Orlando, it FELL HARD. And I’m pretty sure it’s still falling.

You want to know how much I’m upside down??? (of course you do – that’s why you are still reading this!) According to what Zillow estimates my house to be worth (which is not 100% accurate by any means) — I’m $120k under what we OWE and and $165K under what we paid.

That number truly astounds me — but sadly there ARE people worse off than me.

Thankfully we CAN afford our mortgage. We did actually buy within our means when we bought the house. Which actually brings me to something that REALLY pisses me off…short sales.

With the mortgage rate RIDICULOUSLY LOW right now, there are A LOT of people hopping on this short sale bandwagon. They sell their house that’s worth thousands less than what they paid with a high(er) interest rate (they DO have to default on their loan and risk foreclosure)– and then buy a new house. A BIGGER house that costs about the same with a lower interest rate.

At first glance this sounds awesome. I mean – props to those people who figured out THAT loophole. But… at the same time,  these short sales {and foreclosures} are feeding INTO the problem. And for people like us who LOVE our home and plan on staying in it foralongtime (The Biebs is right – never say never) it makes us bitter. And resentful. And we want to TP and egg your house, so be prepared.

{Standing ovation to whoever did this TPing job!}

Go ahead and blame the government. I will be the first to tell you that their plans and efforts to help homeowners {such as me} totally suck, but if we are being truthful here — the power is in the people.  (People who buy houses they can’t afford – I’m talking to you). Let’s get our act together America!!!

Honestly – I don’t want to point fingers. There are a lot of unemployment situations out there – and some people HAVE NO CHOICE. At the same time – everyone makes mistakes (myself included!). Real estate is never a given, always a risk. But man, it sucks it sucks knowing that my neighbor lives in the SAME house as me and bought it for at least $150K less.  I really like a good bargain and my house? Is definitely not one of them.

We love our house, it’s without a doubt a HOME and while we don’t love the mortgage situation we are in – we are holding strong and trying to have faith that some day it COULD be considered an asset again. *Fingers Crossed*


Obviously, my life is not perfect — far from it… and my mortgage is just PART of the proof!

  • Are you in an upside down mortgage? Come commiserate!!
  • Have you been involved in a short sale?
  • Have you taken risks that have backfired?


  1. says

    Ugh, I hear you–and unfortunately, Florida will probably be the last state to recover. Zillow just sends me into a hot sweat, so I need to learn to stop checking the app everyday. My boyfriend bought his house in 2008 right before everything crashed, and although it was a great first house for one guy, it’s way too small for even the two of us and our 120 lb dog. Obviously there’s no immediate need for us to find a larger house except that we are literally maxed out on storage space and we can never have people over. We’re trying to wait it out, but I get so jealous of my friends who are first time homebuyers who are paying the same that we did and are getting houses twice the size of ours.
    Jessica @ Sushi and Sit-Ups recently posted..Chi Pan Asian

    • Michelle says

      I am so jealous of first time buyers who are buying bigger houses than me (without kids!) too. Waaaaah. I guess it’s a lesson learned though!

  2. Lori says

    I’m right there with you sister. Zillow “zestimates” my house at $112,900, but houses in our neighborhood similar to ours have been selling for about $175,000. We bought our house in 2004 and we owe $212,000 on it, which means I am between $37,000 and $100,000 upside down, depending on which figure you believe. Either way, it makes me want to puke. Fortunately, we had always planned to stay in our home for the long term and we can afford our mortgage, so we’re better off than most. I understand your frustration, though, when your neighbors are buying the same house as you for half what you paid.
    Lori recently posted..Back to School

    • Michelle says

      I am also really grateful that we plan on staying here for the long haul — as are plenty of my neighbors who have been here since the beginning! It actually makes me feel a little better. I hate that there are so many people in this situation — but I guess it’s good we aren’t alone.

  3. Lisa says

    My house situation is also sad…zillow has the estimate $70k less than we bought in 2006. So much for our 5 year plan! We put 20% down when we bought it, yet had to refinance with PMI since we lost that 20%. Sad.

    My friend went through a short sale after her divorce, they tried to sell it close to what they paid with no luck (they also had barely any equity), eventually to just be done with it they sold it to one of those “we’ll buy your house” type people whose ads you see around, went through and walked away with literally nothing. So, lost whatever money they may have put into it, but could move on. She now rents…

    • Michelle says

      I really do sympathize with those who aren’t able to stay in their house – especially when divorce is involved. Short sale is SUCH a better option!

      UGH on PMI :( We put $35K into the house — it’s like kissing my money goodbye :(

      • Lisa says

        I hear you, believe me.. We have kissed at least 70k away at this point. Ughhhh..that is awful to see in print!! Makes you wish you rented!

  4. says

    We bought a really crappy house and fixed it up. In terms of our loan, I think we would get what we owe for sure but maybe not what we paid and definitely not what we put into it. We rent it since we don’t live in Texas anymore. My husband keeps pushing to sell it, but I’d rather just hold onto it if it’s not going to make us any money.
    Alecia recently posted..Lady stuff

  5. Stefanie says

    I do have to stay that not all people involved in a short sale do it for those reasons. Myself included.

    My husband and I bought a home, LOVED IT tremendously. My husband had a nice comfy job at the time, working for his Dad’s construction company. And then the big economic downfall hit, and he lost his job. The entire company went under. He was able to find another job again pretty quickily, but not NEARLY what he was making with his Dad. We drained our nest egg, trying to keep up with our payments on the house. Worked with the mortgage company for almost a year, trying to get a modification on our loan. And then BOOM. The mortgage company suddenly sent us a foreclosure notice, denied our modification, and said we owed them over $10,000 because of making the modified payment amount (Which they told us to do) instead of our regular mortgage payment.

    At that point, we didn’t have $10,000 dollars to keep our house, we had used it all to keep up on the mortgage payments. The only option we had was to go ahead and let the bank foreclose on our house, or a short sale. The short sale was a better option for us, because it doesn’t have as nearly as harsh side effects on your credit as a forclosure. Not only that, had we tried to sale our house on our own for what we owed on it (we considered this option as well), we would be in the exact situation you are in now. Our house just wasn’t worth what we paid for it because of the economy. Had our situation been different, and my husband hadn’t lost his job, I’m certain we would still be in that house. :(

    • Michelle says

      Oh that sucks :( I’m so angry for you!!

      I definitely wasn’t saying that everyone who short-sold their house was doing it for personal gain. I know a few people who have lost their house/been forced to do a short sale and I feel so incredibly bad for them. It sucks that people like them (and you!) CAN’T get the help you need and the banks are being so ridiculous about it.

      As for how people are doing it — they buy the new house first (you just have to qualify and make sure the loan isn’t contingent on selling), claim they are going to rent the old house, and then stop paying on the old house. Burns me up!!

  6. Stefanie says

    Also…I’m not sure how those people are managing to get a loan right after a short sale?? It takes a hit to your credit, and also lists a default. Not many bankers are willing to risk that.

  7. says

    I *so* feel you on this! We are unbelievably upside down on our home right now. We fall into a different category though – the home equity loan problem. When my father passed away in 2004, I was able to buy out my brother & sister and purchase my father’s home by refinancing the loan he had – which meant a relatively low mortgage because he had been living there & paying the mortgage for 15 years (only owed about 35% of the value). The home was built in the 60s and needed LOTS of updates – which we were able to due thanks to an equity loan. Jump to 7 years later & our home is valued at less than what our original (already low) mortgage was! The value has dropped over 55% since we purchased it. Luckily, we can afford the payments (got loans that were well within our means) so we’re still lucky. But there’s no way in hell we’ll be able to sell any time soon…so we better stay comfy in our little 2 bedroom 1 bathroom place & hope we only have 1 child!

    It frustrates me to no end when I hear about people abandoning their homes and/or doing short sales because they *can*…instead of because they *need* do. Especially because there is a multitude of honest people out there that really CAN’T make ends meet right now & to me they’re the ones that need short sales & other programs the bank/government offer. Not lazy (or greedy) folk that just want more bang for their buck right now.
    Theresa @ActiveEggplant recently posted..The Sad Truth

    • Michelle says

      Oh wow! Here you are thinking you were doing the smart thing.

      That’s exactly how I feel about the people abandoning homes. I get why they are doing it — I’m not going to say I’m not tempted to join in on the bandwagon, but there is just something SO wrong about it and I don’t think it helps ANYONE. Maybe I’m naive (I really am, about a lot of stuff), but I just feel like whatever I do is going to come full circle at some point.

  8. Sabrina says

    When Joe was transfered to Illinois SF was going to buy our house, dream come true, right? Second mortgage company wouldn’t agree to the short sale… So instead of getting about $16k from SF, they got a FORECLOSURE from me. Their greediness caused the whole deal to fall through. We paid a mortgage and rent for four months, nearly bankrupting us. We had to keep current while we waited, SF wouldn’t buy unless we were current and the mortgage companies wouldn’t help unless we were behind, are you kidding me? If I knew then what I learned, I would have just walked away and not poured four months of payments into that house, but we did the right thing and now we are dealing with a foreclosure and lawsuits, awesome. While our neighbors across the street, gutted their house; sold everything but the freaking walls… ac units, doors, sinks, fixtures, switchplates, etc… There were no handles or locks on any doors so we walked around… It was disgusting. And now, I’ve been lumped with them, no better. Can you tell I’m bitter. Lol, oh well, c’est la vie, right?

    • Michelle says

      Oh man — and you did everything right! That sucks. Karma is definitely a bitch though – you’ll have your comeuppance!

  9. Marie peoples says

    Me too :( it is very sad that our builder is still building, and for 120k less than what we paid, and it’s 5k square feet!!! Yes, thankfully we LOVE our home, and will stay here until the market flips back or completely emplodes.

    • Michelle says

      That is just SO SAD! 5K sqft?? What the hell do you do with that kind of a house??

      Hee about the market emploding. It’s gotta do something, right?

  10. says

    For my first home, I bought a condo in 2008 as a foreclosure. I’m in construction, so I know fair value is for labor & materials and with the square footage of the house, I was definitely on the winning side. I’m upside-down now too. Ugh. It’s so annoying. I hate that people are ditching their houses and upgrading for free. I feel like, well, congrats to you for getting away with it, but thanks for helping my home value drop just a little bit more.

    And the government gave free money to all these banks who did nothing to help the people. If they had made them use the money to renegotiate with anyone trying to get out of their mortgage (unless very extenuating circumstances occur) this problem wouldn’t be near where it is right now. But instead, they got the free money and now the government assists them with their “losses”. Way to use your head jerks.

    I totally agree with you. I hate it.

    The end.

  11. says

    We got into the game much later than you and were able to benefit from the down market, but it’s just a matter of timing. You did what was right for our family, we did too – it’s just that you needed it when houses were expensive and we needed it when we had to jump through hoops to qualify for a mortgage (despite having good jobs and credit!). I think you’ll be OK in the long run, you’re happy in your house and it’s very nice. Plus you have new floors! Yay! What matters is that you can afford it, you didn’t overspend, and you can have a happy family there. 😉

    I didn’t want to TOTALLY ignore your questions so that’s why I answered them… but it did make me think of that time we were at… where were we? And you said “Let’s go, eh…” and then realized there were cops there. And then that became what we said all the time. 😉
    Nicole C. recently posted..Thursday Ten: Ways to Plan a Meal

    • Michelle says

      We were at Wendy’s!!! Ha ha. Let’s go, eh. We were so cool :)

      I agree on what matters — and I love my floors :) Obviously, we wouldn’t have gotten them if we didn’t intend to stay — then we REALLY would be throwing away money!!

  12. says

    We are in the same situation only in Polk County. If going by Zillow, our house is worth $137,000 less than what we paid. There have been tons of short sales in our neighborhood because of all the foreclosures and my husband was even approached by someone wanting to buy our house for an amount much lower than we could sell it for. (Not a conversation that went well). This is our first house and we did not plan on staying in it forever but it looks like we might have to.

  13. Noel says

    We are not under thank goodness despite buying in 2005 but we are still look at our neighbors who bought 2 years earlier who bought for 100k less than we paid (130 v 230) and think “man were we behind the 8 ball). But then there are the neighbors who spent 290 and we know that it will take 20 years to recoup that. To us it is frustrating fr 2 reasons. 1) we wanted to wait until we got married and we ended up behind; an 2) we bought 6 months too late; we tried to sell 6 months too late; we refied 6 months to early, etc. All the advice we received was too late. The only siler lining is that
    Our agent tried to convince us to buy the biggest house we could stretch to afford. After all the would only go up in value. Had we done that, we would have lost our shirts as that area has seen a 50% decrease in value!

    I am sorry that you have to go through the upside mess.

    • Michelle says

      Glad you guys played it safe!! We went for the smaller house too — and I’m SO glad we did. Definitely could have been MUCH worse!!

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