Redfin overvalued his house and the housing market is dropping drastically now. Once the Fed is forced to raise interest rates, DSP's condo will drop pretty far in value. Can't imagine he will get enough to pay off his mortgage and buy a new house
That's because they're run by people so dumb or mean they want to be on an HOA.
Oh but they are.
People who need to hit a quota and can justify a loan to him that has collateral and a six figure income
Wasn't even out of a lack of concern for his own financial security either, because one of the most consistent themes in Phil's history is an obnoxious dedication to paying people as little as he can get away with.
You are overestimating his financial savvy: Phil will happily pay $10 for the rest of his life to get out of paying $100 right now. This was how he committed to a 30 year, 3% down mortgage on the Connecticut property and decided not to sell it before/concurrent with the move to Washington and why he committed to another 30-year mortgage when he moved to Renton. Even after he admitted the bankruptcy was real when somebody asked the obvious question of "why do you never pay more than the minimum?" he got angry and defensive and responded "then I'd have less money NOW stupid!". This is also why his "obnoxious dedication to paying people as little as he can get away with" hasn't worked since Rambo and Howard ditched him - he must have paid thousands in interest on his credit cards without really touching the principal and the banks might even have broken even on him because of it. Phil is a grifter but he's still an amateur compared to your run-of-the-mill banker.
This is a moot point when he has made holding onto that place the hill he is willing to die on: He has said in as many words that if he loses the place, the trolls win. This was news to me but that's just how smart Phil is, he knows us trolls better than we know ourselves. He has also ignored obvious opportunities to downsize (Single Saga in 2017, the fantastic seller's market during Covid) and hard proof his financial situation is unsustainable (bankruptcy, overdrafts, late mortgage payments). Speaking for myself the only ways I can see him selling that place are if he accidentally wrecks it (bad fire, blizzard, mold somehow taking down a wall) or he ends up with unsustainable debt from a hospital bill or at-fault car accident and those are all out of his control.
Sorry, I should've said that from HIS perspective, he's getting away with paying people as little as possible. I wasn't meaning to imply that he's GOOD at this. Obviously the less you put down, the more it hurts you in the long run, on ANYTHING. It's just that he feels nothing from it because, as you say, so long as he has more money NOW, it's okay. He lives completely in the moment, a fact confirmed most powerfully by his lack of any savings whatsoever.
Phil calling it an L for himself is basically an unintended admission that he knows damn well how much he deserves for karma to kick his ass, because that's exactly the reason we would laugh at him for losing the Wakhando. The only person who can bring it about is Phil. He knows this, and so he dreads it same he does every other kind of moment where he detracts himself.
Not only should Phil have saved up money, but he also should have sold the CT Condo as well. That equity he had in the CT Condo would have helped him on a down payment for the WA Condo so he could actually start paying of the principal of the loan instead of just insurance and interest
You forget that he was underwater on the CT property because the value dropped by about half after he bought it. We do not have an exact number but it must have been at least $35k underwater (deficiency when he defaulted in 2019) when he tried to short sell in 2017. Not paying the mortgage on the CT property would have been huge but that was all hypothetical unless he got the bank to accept a five figure loss or found a buyer willing to pay 50% above market value. I'm sure there are buyers willing to overpay by that much in exchange for the seller taking their bid immediately but I doubt those kind of people want tiny condos in a damaged building.
He was underwater on the CT condo because he just stopped paying the mortgage on it all together. I can't remember when he went home and his mother gave him that great advice, but he had stopped paying for the mortgage and was barely keeping up payments when he moved to WA because of his aunt who was paying rent. Had he sold it back when he moved, this would have been fine. Even if it was 10-15% of the downpayment on the WA condo, that would combine with his 5% and get him to a magical number that doesn't have the insurance kick in
When he tried to short sell it in 2017, he was up to date on the mortgage of the CT condo. The reason he was rushing to sell it was because he simply didn't want to pay for it anymore. He even admitted at the time that he had no problem being able to pay it. The whole deal with the CT condo was that he didn't want to keep paying for it and it wasn't until his trip to CT to see his "dying parents, possibly for the last time" that he got the idea to just stop paying for it.
I think you are confused on what a short sale is: It does not mean a sale with a quick turnaround or one without missed payments, it means one where the property is sold for less than the outstanding mortgage balance and the bank either accepts the loss or gets it from somebody else (usually the seller). He was "up to date" in the sense that he had not missed payments but that does not mean the property was above water which is most likely why the bank vetoed the short sale - they stood to lose tens of thousands of dollars by going ahead with the sale even if Phil paid on-time until the day everything closed while forcing him to keep it let them continue collecting payments. MidFirst took on some risk here because they were assuming he would not just declare bankruptcy in response to the denied short sale, but it looks like they guessed correctly since he did not default for another ~two years.
This begs the question of why he didn't want to sell it for MORE than the outstanding mortgage, since then, if that worked, he would've been free of the thing years ago. Deciding between "try to make the bank eat the remainder" and "continue owing money on it for years, but don't actually give any of it up" tells me that Phil's real priority wasn't to get rid of the condo. It was to give MidFirst the finger, and to Hell with anything else.
Because the sale price necessary just to break even would have been prohibitively high: When he defaulted in 2019 he owed about $100,000 on a $65,000 property; these numbers would have been even less in his favor when he tried to short sell in 2017. Some buyers will pay more because they want to be sure they'll get a house, but expecting a buyer to pay 50-plus percent over the assessed value is not realistic. If Phil had done that the property would probably still be on the market today.
Phil just wanted it out of his hands, damn the consequences. At the time it was valued so low that there was no way to sell it at a price to cover his outstanding mortgage. His only option to get rid of it at the time was a short sale, but given that he had no issues paying mid first what he owed, there was no way for him to get one.
This. Phil operates on three things. Greed, pride, and laziness. He made the decision to leave for Seattle to make his trophy daughter happy and to flex on his haters so he didn't need the original condo anymore. He was too lazy to rent the condo out himself and too greedy to let a management take a cut of the rent. With all three motivators satisfied to some extent, I think greed wins out in ignoring consequences and to screw the banks over because he feels were draining him of money. Which leads to another point...
It is not uncommon for people with excellent credit to only have to put 5% down in normal circumstances. I know this from personal experience. The difference is that the loan market at end of 2007/the beginning of 2008 is about where we are at now. Financial institutions are giving out fiscally irresponsible loans because the know they can be covered several different ways. They could have the loan insured. They take less of a hit knowing the house will end up back in their hands and resold. Or they could just sell it off to another financial institution. I had the latter happen with my mortgage and it is not uncommon. You take out a loan at a local bank, it is sold to a much larger regional entity, and then it is sold to a far larger national entity. The original bank that made the loan is off the hook so why should they care.
