“You’ve Sold Your Soul to the Devil”

[Music] brought to you by the every dooll app start budgeting for free today my wife and I we took out a home equity sharing agreement with um one of these companies and we had good intentions we wanted to pay off some higher interest debt and that all got paid off but now I'm staring at this this agreement and you know now that it's been a little while I'm looking at it and it's just becoming um and more daunting um so basically they gave us a upfront cash investment of about $662,000 and um any time between now and about 30 years from now we can choose to square up with them but they get the $62,000 plus 40% of the appreciation from of my house from the time we signed there was an appraisal to to uh 40% of the equity between the time we signed and the time that we settle and we have that time so I'm just wondering you know so if you did that now how much would that be today well we'd have to get an appraisal but approximately yeah um maybe probably around $100,000 okay so this pay makes a Payday lender look like a sweet deal yeah it really does um you're Soldier sold to the devil yeah and so hopefully people hear this call and just never do any home equity sharing agreement of any kind yeah how long ago did you do this was about eight months so that makes it even worse so you make a $100,000 return on a $60,000 investment in 8 months and we don't call that highway robbery in California H interesting okay yeah uh I don't have an answer for you I mean uh obviously the sooner you take care of this the better um the list it's going to cost you um I might call them and beg for mercy like if I get you a check now for the 60 what is the minimum you would take on top of the 60 I mean double your money that'd be a deal right for them and for you I mean if it only cost you 100% interest and not 200% interest that's a pretty good deal so just by talking to them uh compared to what you got right so um I I as far as I know what you've done is perfectly legal um in terms of you know is there some kind of a basis to go at them no I think you just signed up for a really ugly trip and are getting to take it um so the only thing I can think of is you know first off is try to talk them down and and then go refinance and take care of it immediately and then second off if you can't do that um you know you've got to end the cost as quickly as possible because every day you screw around with this in California in Sacramento your house is going up in value and every time it goes up in value um $1,000 they get 400 m mhm I'm just curious what did you do with the 60,000 he paid off the debts oh I I miss off debts he paid off debts okay yeah yeah yeah so in reality we just made our situation worse but so you were just so stressed out and freaked out that you just didn't look at this is that what happened I mean you had to close you had to be you had to willingly close your eyes to how bad this was for some reason what what what do you think that was I think it was just seeing the debt and then seeing you know seeing how long it would take and then you know kind of because I was working hard to pay off the debt which is you know me perfectly fine like what you had to run these numbers right and I just figured I'd let it I'd let it grow until I was ready to I was ready to sell my house and then just you know the the values weren't go going to go up and it was a lot it was a lot of little things and I don't I'm not justifying no I'm not either I'm just I'm trying for folks listening I'm trying to get inside the heads space of someone who's so desperate that they don't look at a deal that's this bad and go forward you know I mean that's that's because I always talk about on here man that you know the dumbest things I've ever done in my life is when I was desperate right after I get desperate I get stupid and um so that that's kind of you know and I've done I can I can look back and tell you about 10 different thing times where I get freaked out I get put in a corner I get I can't move and so I do something desper and I get stupid and it's just not a good plan so anyway uh uh aside from that for your for you tactically um it it's very unpleasant but you're in a very unpleasant scenario so best case is you talk them down and you go get some money right now and pay them out talk them down to 100% return on their money in eight months that's a sweet deal for them and compared to the terms you've currently got it's a sweet deal for you right yes I mean that if if you call me up and I was in this deal and offered that I'd be thinking about it if I was the other side of this and so that's you know have them think about it um then if you can't do that then you either refinance and buy them out today and end this because you've got that option or sell the house and get out of it and that's your most painful of the three staying in the property and letting this thing continue to tick letting this bomb continue to tick in your closet nope not doing that you're going to wake up 10 years from now and you're whole life is going to be screwed so meanwhile you could have been owning a house that you owned and so forth so yeah you need to clean this up in the next six months by talking them out of it refinancing or selling one of those three and if you can come up with another idea I'd be willing to listen I just don't know what it is that's the first one that comes to me so shared appreciation mortgages Sams came out in the 80s they showed up in the 80s and um to to try to get a lower interest rate cuz rates were so high in the 80s you know we were in 12% 14% in the early ' 80s 18% for a few minutes real estate market and in order to get a decent rate and come down like to a 10 or a nine instead of getting the your your money as the mortgage maker on the interest rate only we could you could also participate in the mortgage shared appreciation mortgages and actually FHA came out with a program that underwrote Sam's now they weren't as um onerous as this guy boy that's a mess he got into I was going to say do you think this meets the criteria of predatory lending from a from a legality standpoint no from a moral standpoint 100% right yeah yeah 100% yeah when you're making user amounts of return um you know but again they didn't the the company did not mislead Isaac that's correct that's walked into this straight up with his eyes open and just said sign me up for stupid you know and I've done that so I'm not picking on Isaac and he he's beating himself up enough without me beating him up that's not the point but um but yeah it's definitely predatory I mean but so is payday lender at 800% that's true on a $200 cash advance that's true to poor people yeah and but it's legal in Most states yeah and it's you know it's absolute scum it's horrible product yeah and how do you sleep at night doing that to somebody you know no I you know yeah I mean they're basically stealing Equity out of his home no no they steal it they they well okay he gave it to him I'm saying conceptually though the deal works out for them yeah yeah oh it's it's unbelievable I mean they're they're they they said we'll give you 60,000 bucks and you can't get it anywhere else and cuz you're broke and in debt and your credit's bad and everything else and here you are desperate and you know you just have to sign over you know three of your children and we're going to put them in the safe and feed them through the door until you come back and get them I mean that's what we're doing here it's hands on grle right so oh man create your free every dooll budget today the simplest way to budget for your life