My Name is Mark and I Have an Adjustable Rate Mortgage

Three years ago my wife and I bought a perfect 1234 square-foot, 3-bedroom condo in Cincinnati, Ohio. Since I had an entry-level job making about $27,000 and she only worked part time, our lender, Third Federal Saving and Loan, sold us on an adjustable rate mortgage. The rate would be 4.5% for three years, which was perfect for us since in three years, we planned to either move into a house or have more lucrative, higher-paying jobs.

It didn't work out that way.

We purchased the condo for $86,000 thinking we were getting a pretty good deal. With a down payment of about $12,000 our monthly payments were about $529 plus a $125 housing fee that covered garbage, water and snow removal.

Three years later, we now live in Minneapolis, Minnesota, work for different companies, pay $1090 rent on an apartment but still pay our $529 monthly mortgage payment on our Cincinnati condo. It has been on the market for nine months and we have had only three showings. Paying rent and a mortgage (especially a mortgage on an empty condo) is a dismal, depressing albatross around our necks. We thought we would be able to sell during the summer but as we pass Labor Day, we realize we may be in for another year of double payments.

And to make matters worse, our ARM just expired. Our rate jumped from 4.5% to 6.5%, which means our payment went from $529 to about $620. And we don't even live there anymore!

We called our lender, Third Federal Savings and Loan, and explained our situation and they told us, "We're sorry but you signed a contract." We inquired about refinancing with Third Federal, U.S. Bank and Wells Fargo and were told two things: 1) we won't refinance a vacant residence or 2) you can't get a better rate than 6.5%.

Realizing that we were stuck with this empty condo in Cincinnati, my wife and I decided to lower the price so dramatically that we won't just lose our entire $12,000 investment, we will have to bring money to the closing.

A little back story. When I completed my MBA in January and was offered a high-paying job with a great company in Minneapolis, the decision to move was easy. It was the opportunity of a lifetime that we needed to jump on. We put our condo on the market for $89,900 hoping to make a small profit. Boy, were we kidding ourselves. My new employer was generous enough to pay for 60 days worth of housing once we arrived in Minneapolis. That gave us some breathing room until March but once we started to pay a $1090 rent along with our $529 note, we felt the financial impact. I was making twice what I was at my last job but the price of housing (plus the monthly power on the Cincinnati condo) was getting expensive. In April, we lowered the price to $84,900. Now less than we bought it for, we'd still recoup a good portion of our investment.

Activity in Cincinnati is almost non-existent. Buyers were few and inventory was high. Potential buyers had lots of property to choose from and the flexibility to be very picky. One of them complained that our condo "smelled musty" and another buyer was turned off by a small puddle of water on the back deck. With feedback like this we knew we'd have to hunker down for the long-haul. Buyers were in no hurry to make a purchase. With plenty of properties to look at and few buys to compete with, they had all the time in the world. But with summer approaching, my wife and I remained optimistic that we'd be able to sell during the so-called "peak season."

Yet, the condo sat on the market without a look. Months passed and we realized we'd need to lower the price again in order to generate some activity. But we ran into problems with our real estate agents, Hoeting Realtors - marketed as the "Third largest realtor in Cincinnati." They took horrible pictures of the condo to begin with and fought us when we wanted them changed, insisting that they were the agent, and knew which types pictures would sell the place. It's important to mention that out of six pictures, Hoeting felt it was important to include two pictures of the kitchen and not a single picture of the upstairs bedrooms. They then proceeded to bash our property any chance they had. "The outside does it no justice," "The dining room needs to be painted mauve," and "For the love of God, PLEASE paint that upstairs bedroom!" We explained that we lived out of state and could not just pop in on a weekend to do needed maintenance but Hoeting hardly helped. They even threatened to RAISE their commission from 6% to 7%! We were outraged and explained that our ARM was about to expire and we were losing a large portion of our investment. They quickly retracted and denied the threat but my wife and I had had enough. We switched to Sibcy Cline and lowered the price to $79,900.

Hardly a visit over the entire summer and at this point, we realized we will not only be losing our entire investment, we will likely have to PAY money to sell this thing. As of this morning, we dropped the price to $74,900 and have set aside about $1,700 to bring to the closing should we be lucky enough to sell for this price.

People ask us if we've tried to rent it. We have but Cincinnati is like a ghost town when it comes to new arrivals. The Cincinnati economy is nothing special. There are a few big companies but it's not like people are pouring into town. It's a dismal situation and we hardly see any light at the end of the tunnel. We cross our fingers everyday hoping that a new family will arrive in town and need a secluded, spacious, well-maintained 1234 square-foot three-bedroom condo, with a view of the woods and a walking path to the local park. If we can just get someone in there to LOOK at it, maybe it will sell but buyers in Cincinnati are scarce and we're at the mercy of the market.