Repercussions of Foreclosure

[Flasch186]

I was wondering if anyone had insight into the wide variety of repercussions that can occur if someone goes into foreclosure. I am hearing a wide variety of info regarding this lately, for example:

No longer is a short on sale by the bank considered taxable income toward you
The bank can go after different assets of yours to make up the difference
After 2 years or so, with some down payment, a bank may not weigh a new mortgage as heavily as a bankruptcy
etc.

Story is my parents are upside down on their retirement home and continue to live in their previous home that they cannot sell. What exacerbates the problem is that the retirement neighborhood they bought in has gone under and the home are depreciating fast due to the developers inability to follow through on what the neighborhood's appearance was supposed to be so the values wont return to what might even be average for some time.

I have been getting some advice to advise them to let it go into foreclosure, save the money that would be going into the loan that is upside down and that in 2-3 years they will have repaired their credit such that they should be fine or above average.....Does anyone have any insight into this sort of thing?

[Anthony]

uhhhhh...i hardly think your credit can rebound after only "2 or 3 years" of foreclosing on your home, let alone leave you in "above average" shape.

why can't they just sell it at a huge discount, take the loss and just buy a small condo for cash with the proceeds?

[Flasch186]

Originally Posted by Hell Atlantic

uhhhhh...i hardly think your credit can rebound after only "2 or 3 years" of foreclosing on your home, let alone leave you in "above average" shape.

why can't they just sell it at a huge discount, take the loss and just buy a small condo for cash with the proceeds?

unfamiliar with the Florida Market?

It's pretty crazy whats happening in some communities down here. In some communities like theirs, many many homes are for sale (in this one its not just due to investing but the fact that the community will not end up being what it was intended to be) and when theyre for sale theyre 50K-75K less than what they owe so if they just simply chose to sell they would owe 50K - 75K to the bank. So that huge discount it would have to be sold at wouldnt solve the problem but may actually accelerate it.

from what I gather, the foreclosure would mean the bank has to sell it and then choose to come after them for a deficiency judgment. I dont know how often they choose that route or not.

The question regarding credit is what Im truly asking because my companies lender said that, literally, with all other credit payments on time and no other delinquencies that they could get a loan (with a down payment) within 2-3 years. Im not sure though and the deficiency judgment would be hanging out there if I'm reading things correctly.

[cody8200]

Originally Posted by Flasch186

unfamiliar with the Florida Market?

It's pretty crazy whats happening in some communities down here. In some communities like theirs, many many homes are for sale (in this one its not just due to investing but the fact that the community will not end up being what it was intended to be) and when theyre for sale theyre 50K-75K less than what they owe so if they just simply chose to sell they would owe 50K - 75K to the bank. So that huge discount it would have to be sold at wouldnt solve the problem but may actually accelerate it.

from what I gather, the foreclosure would mean the bank has to sell it and then choose to come after them for a deficiency judgment. I dont know how often they choose that route or not.

The question regarding credit is what Im truly asking because my companies lender said that, literally, with all other credit payments on time and no other delinquencies that they could get a loan (with a down payment) within 2-3 years. Im not sure though and the deficiency judgment would be hanging out there if I'm reading things correctly.

I read an article the other day in, I believe the WSJ, that was about people that are in the same boat as your parent's. They said in the article that you could get a new home in probably 3-4 years if you had good credit otherwise.


A few articles:

http://blogs.wsj.com/developments/20...om-a-mortgage/

http://money.cnn.com/2008/02/06/real.../walking_away/

[JPhillips]

I'd check with some of the new walk away companies. I'm sure you need to be careful with some of them, but I'd imagine there are some where you could get good info.

[Swaggs]

I would imagine that even 3-4 years would be a push, unless your parents have/had excellent (750+ credit) AND also had a very high debt/income ratio.

[Fidatelo]

I guess I would lean towards the moral side of this coin, which is that they made an agreement to pay back some money they borrowed, and they should be doing whatever they can to make good on that obligation, not simply weighing out what solution will leave them better off.

If they are in danger of starving or living under a bridge huffing Ragu, then by all means foreclose. But I didn't get that impression from your post, because it probably wouldn't even be a question if it reached that point.

[CU Tiger]

I wouldnt worry much about the next home. They are retired, sounds like if they sell their home they will have enough $$$ to pay for a new home. Just do the details right next time, contingency sale/offer, and they shouldn't have problems.

You can just about count on the bank coming after them for the balance. Worse the foreclosure sale will probably only be 80-90% of value and will then have foreclosure fees, and sale fees applied. It is not uncommon to see their net value be about 50% of value.

The by far cheapest out will be for them to sell the home and try and negotiate the short down with cash in hand. Once they allow foreclosure they lose all leverage. It is amazing what you can accomplish with a lender when you say, look I know I owe 300K, I have a buyer willing to pay 250k tomorrow, Im willing to feel some pain, lets split the 50, and you finance me unsecured on the balance for 10 years. Or Im gonna let you foreclose on it, auction it for 200k and then spend 20-30 trying to collect the other 100 from me, then Ill declare bankruptcy and you will net 170....

[Lathum]

They may get a loan in 2-4 years but what would the interest rate look like?

[cartman]

That's one of the secrets the mortgage industry is scared of. A house repossession is a much lighter hit to your credit score than bankruptcy is. It is true that most people, if they keep their other credit accounts current, can get back to their previous credit score level in about two to three years. Lenders are afraid more and more people will go this route as the number of people who are in negative equity are looking for ways out.

[vtbub]

Can't they do a reverse mortgage?

[Flasch186]

AFAIK, a reverse mortgage is when you slowly pull equity out of your home, as if it's paying you. This is the opposite situation that they are in.

I guess the #1 concern is that of the bank coming after them for the difference although they couldnt come after their homestead. So it would have to be assets (401K, IRA, etc.) or wage garnishments.
The #2 concern is them trying to hold onto cash instead of flushing it when things are looking crappy for them over the next few years.
The #3 concern is the credit hit but not much.

[CU Tiger]

Flasch, check their state laws about #.
Each state varies, but I know SC for instanc, while they can't "take your home" they can take any positive equity position in excess of 5% of the value. In other words if they own the home out right a judgement can force them to either sell it or mortgage 95% of it.

[Flasch186]

OJ moved here for a reason

[Vinatieri for Prez]

Any chance they can work out a different temporary payment arrangement acceptable to the bank to ease the payment burden and stay out of foreclosure? Call the bank. It's worth a try. I have no idea however whether that is a pointless effort. Depends on the relationship with the bank and the fact that nowadays I am thinking the last thing a bank wants is another foreclosure on its books. Or maybe I have no clue how that works.

[Flasch186]

Im looking at it as more of an investment decision. There is an end though as they get tapped out at some point this year. Do they continue to pay off interest (a little bit of principle) on something they cant live in and cant ever get the return out of. Or do they save their money and take the credit hit so that at some point they can restart trying to get into retirement. Right now with the prospect of retirement on the horizon they are working to try and pay this loan off which doesnt seem like they'll ever see an end to so I'm just trying to weigh their positives and negatives. One of the reasons they keep dumping the money in is the fear of what happens if it goes into foreclosure so I'm trying to smoke out those repercussions so they can make a fully educated decision.

[JPhillips]

Another thought is spend a little money to consult with a reputable bancrupty attorney.

[Flasch186]

Originally Posted by JPhillips

Another thought is spend a little money to consult with a reputable bancrupty attorney.

Theyre not close to bankruptcy yet it's just that theyre bleeding on this and at some point in time it makes for a bad investment to keep sinking money into it and I wonder if that money going towards that mortgage wouldnt be better invested in a savings account or elsewhere so as to counter the hit to their credit score while giving up on the idea of living in this retirement community that they had intended.

[Mizzou B-ball fan]

Originally Posted by Flasch186

Theyre not close to bankruptcy yet it's just that theyre bleeding on this and at some point in time it makes for a bad investment to keep sinking money into it and I wonder if that money going towards that mortgage wouldnt be better invested in a savings account or elsewhere so as to counter the hit to their credit score.

I find all of this property value issues on the east and west coasts to be extremely interesting. I lived in Baltimore for a year and got to see some of the inflated property values in person. It's one of the main reasons we moved back to the Midwest. In 2007, property values actually went up 2.4% on average in Missouri. I'm just floored to see the double digit losses in property value in some situations. I know that the ARM and interest-only mortgages were part of the problem, but it seems like the ridiculous prices on some homes in coastal states are just as big of a problem.

[Flasch186]

Originally Posted by Mizzou B-ball fan

I find all of this property value issues on the east and west coasts to be extremely interesting. I lived in Baltimore for a year and got to see some of the inflated property values in person. It's one of the main reasons we moved back to the Midwest. In 2007, property values actually went up 2.4% on average in Missouri. I'm just floored to see the double digit losses in property value in some situations. I know that the ARM and interest-only mortgages were part of the problem, but it seems like the ridiculous prices on some homes in coastal states are just as big of a problem.

Had the neighborhood carried on in the direction in which it was started Im not sure I would be telling them to look into foreclosure but the developer/builder filed Chapter 11 leaving liens on many houses incomplete or close to completion. the enormous, beautiful amenities center supposedly was able to be financed supposedly so that they could finish it but I have my doubts as to their intentions for completion or its quality. The entire area is depressed and I just think that their quality of life there is not worth the constant money dump and being upside down by 50-70K just doesnt make sense to me.

[Mizzou B-ball fan]

Originally Posted by Flasch186

Had the neighborhood carried on in the direction in which it was started Im not sure I would be telling them to look into foreclosure but the developer/builder filed Chapter 11 leaving liens on many houses incomplete or close to completion. the enormous, beautiful amenities center supposedly was able to be financed supposedly so that they could finish it but I have my doubts as to their intentions for completion or its quality. The entire area is depressed and I just think that their quality of life there is not worth the constant money dump and being upside down by 50-70K just doesnt make sense to me.

Doesn't this seem like a lawsuit in the making? The developer's failure to deliver would seem to be a major snafu. Does the bankruptcy create a protection level to keep him from being sued?

[Flasch186]

Well, I just spoke to mom and they reduced the price 20K but at the new price theyre just isnt any wiggle room and unfortunately, I can tell ya, very few people have the thought of paying list price; everyone wants to make an offer. So theyre at least being proactive so we'll see what happens in another month. They'll have to sell both homes and then regroup, perhaps buy a condo or something.

Mizzou - Builder's and developer's contracts are sickly favored to themselves and leave all kinds of outs. Then the lawyers they have will string along buyer's and brokers as long as possible to make it not worthwhile. the list of creditors is endless ina situation like this but the individual homeowners and their deposits go at the end of the list and they rarely see anything in return. It's a shame...That's why when Im talking to homebuyers out shopping us, and it goes down the avenue of solvency, I tell them all of the pitfalls of buying from a smaller builder with the risk of going under on the horizon (like my competitor in this neighborhood is): No warranty, Quality issues, contact problems, etc. vs. my company whose balance sheets look great comparably.

[Desnudo]

Originally Posted by Flasch186

Had the neighborhood carried on in the direction in which it was started Im not sure I would be telling them to look into foreclosure but the developer/builder filed Chapter 11 leaving liens on many houses incomplete or close to completion. the enormous, beautiful amenities center supposedly was able to be financed supposedly so that they could finish it but I have my doubts as to their intentions for completion or its quality. The entire area is depressed and I just think that their quality of life there is not worth the constant money dump and being upside down by 50-70K just doesnt make sense to me.

Are you positive that another developer won't step in and finish the job? I'm no real estate expert, but this seems like a clear case of hitting the panic button and selling low. What happens if you wait a year or two?

[Fidatelo]

Am I the only one who finds it wrong to consider foreclosure in these circumstances? What happened to personal responsibility?

[Flasch186]

Originally Posted by Desnudo

Are you positive that another developer won't step in and finish the job? I'm no real estate expert, but this seems like a clear case of hitting the panic button and selling low. What happens if you wait a year or two?

Right now Wachovia is talking about getting involved but the entire situation is, like you said, dire.

Fid, they would be taking the personal responsibility and personal decision to stop paying for it as a logical decision to try and protect themselves financially. I think those that fall on the side of people taking personal responsibility for their own finances would applaud their actions to protect themselves instead of relying on the government to help, right?

[Anthony]

i would sooner sell at a loss then foreclose on my house. at least if i sell at a loss then my credit is intact and i can quickly buy something cheaper with the proceeds. co-ops are very cheap alternatives to houses. i'm keep trying to get my mom to sell her house and just buy a cheap co-op for cash. she isn't struggling to make payments or anything, but she goes without a lot of stuff to live. she's very thickheaded. i was trying to get her to sell 3 years ago when the market was still reasonably pro-seller. now? it'd be kinda hard. fortunately she's in NYC so our market is always healthier than in other markets across the country.

your parents can't have their cake and eat it too. seems like they were still holding out on trying to make a profit and only just now are willing to break even. they should be selling at a loss and take the money and run.

[Flasch186]

Originally Posted by Hell Atlantic

your parents can't have their cake and eat it too. seems like they were still holding out on trying to make a profit and only just now are willing to break even. they should be selling at a loss and take the money and run.

Completely off target.

They wanted to spend their days at the amenities center playing cards and doing activities. That is gone from the radar now. They certainly wanted to be financially stable in their retired days. That is gone from the radar so now it is about stablizing the ship. They would like to sell but theyre getting close to the point of owing the bank after the sale, that means that the decision must be made to apply a price to credit points. If the price is too high you should bank your money to offset the risk the score will provide to future lenders. thats just smart business to look at all ramifications HOWEVER I still am not sure about the things unseen, like delinquincy judgments, etc.

[wade moore]

Originally Posted by Fidatelo

Am I the only one who finds it wrong to consider foreclosure in these circumstances? What happened to personal responsibility?

flasch would just assume let the fed government bail them out.

*shurg*

[Flasch186]

Not sure how you get that from the above. What is the bailout theyre asking for? They would be giving back the home to the bank as the collateral promised.

[Fidatelo]

Originally Posted by Flasch186

Fid, they would be taking the personal responsibility and personal decision to stop paying for it as a logical decision to try and protect themselves financially.

That isn't responsible at all, that is pushing their problem (or at least a portion of it) onto someone else. It is a selfish decision and speaks greatly of one's character.

[Flasch186]

Originally Posted by Fidatelo

That isn't responsible at all, that is pushing their problem (or at least a portion of it) onto someone else. It is a selfish decision and speaks greatly of one's character.

what? The home is the collateral for the loan. If the bank thought it was a good idea to make the loan why wouldnt they be able to bear taking the collateral as agreed in the contract (+/-) fees and stuff?

Perhaps I just dont understand the "someone else"? Are you saying the bank is the someone else? or is there a tax implication that youre saying ends up on the "people"?

Who should they put their fiscal decisions on? Why wouldnt anyone try to look out for their own financial well being (with +/- for charity, family, etc.)

[Mizzou B-ball fan]

Originally Posted by Flasch186

what?

Perhaps I just dont understand the "someone else"? Are you saying the bank is the someone else?

Who should they put their fiscal decisions on? Why wouldnt anyone try to look out for their own financial well being?

I suppose from a moral standpoint, I'd agree with Fidatelo. However, real life doesn't work that way. The bank signed the same contract as the person who bought the house. In the contract, they put in a clause concerning what would happen on a foreclosure. The bank wouldn't be complaining if the house value had gone up. Just like the buyer, the bank has to play by the rules they agreed to in the contract. Sucks for them, but that's the way things are.

[Flasch186]

Originally Posted by Mizzou B-ball fan

I suppose from a moral standpoint, I'd agree with Fidatelo.

please explain this part though because I agree with the second half of your statement. I dont necessarily disagree with the above because I dont understand it. If you have the time, please explain the morality standpoint. Perhaps youre right and Im just not seeing it as anything but a financial, contractual thing. Is it more than that because I dont see any loyalty to the bank outside of that. If it hit the taxpayer's then I could see it but perhaps I havn't seen that as a possibility, is it?

[Fidatelo]

Originally Posted by Flasch186

what?

Perhaps I just dont understand the "someone else"? Are you saying the bank is the someone else? or is there a tax implication that youre saying ends up on the "people"?

Who should they put their fiscal decisions on? Why wouldnt anyone try to look out for their own financial well being (with plusses and minuses for charity, family, etc.)

The "someone else" is the lender, which in this case is the bank and its shareholders.

Your parents asked for money, and received it under the obligation to pay it back (plus interest). By foreclosing they are not fulfilling their obligation, this is why their credit rating takes a hit. And in my mind, their is a large difference between being unable to fulfill an obligation and unwilling to fulfill one. From everything I've heard your parents would be falling under the latter category.

[Fidatelo]

Originally Posted by Mizzou B-ball fan

I suppose from a moral standpoint, I'd agree with Fidatelo. However, real life doesn't work that way. The bank signed the same contract as the person who bought the house. In the contract, they put in a clause concerning what would happen on a foreclosure. The bank wouldn't be complaining if the house value had gone up. Just like the buyer, the bank has to play by the rules they agreed to in the contract. Sucks for them, but that's the way things are.

If lenders were ok with foreclosure, they wouldn't enforce massive credit hits to those that do it. When you borrow money, you are expected to pay it back. Not doing so, by choice, because it works out better for you, is not what I would consider a positive moral action.

[Flasch186]

hmmm, then why have collateral at all and only hold the credit score as collateral? Isn't a loan for something in lieu of the collateral and it's intrinsic value?

The ability to pay it back, in some cases, is judged along different timelines. For example, financial advisers would tell you to look 10 years out when investing. So just because they make the payment today doesnt mean that it is a wise long term decision, IMO.

[JPhillips]

I sort of understand the moral argument, but in our system it is foolish not to walk away. Banks and businesses walk away from bad investments all the time and nobody thinks anyhting of it. When an individual does it, however, people lay the wood to them. The people made a bad investment and are looking at using legal avenues to limit their liability. If that's acceptable for businesses, why is it unacceptable for individuals?

[Mizzou B-ball fan]

Originally Posted by Flasch186

hmmm, then why have collateral at all and only hold the credit score as collateral? Isn't a loan for something in lieu of the collateral and it's intrinsic value?

The ability to pay it back, in some cases, is judged along different timelines. For example, financial advisers would tell you to look 10 years out when investing. So just because they make the payment today doesnt mean that it is a wise long term decision, IMO.

I agree with you. The moral hangup comes from the thought that your parents agreed to pay the loan. If it was your best friend offering you a $1,000 loan, you certainly wouldn't walk away without paying, though your friend might agree to give you a bit more time. It seems a bit off to walk away from a loan just because the property value has dropped off. With that said, it is within your parents' rights to do exactly that. And I can guaranted that the bank wouldn't try to work out anything at all if the property value was high and your parents couldn't afford to make payments. It goes both ways.

[JonInMiddleGA]

Originally Posted by Fidatelo

Am I the only one who finds it wrong to consider foreclosure in these circumstances?

No, but I figure we're a distinct minority.

What happened to personal responsibility?

Where the hell have you been for the past 40 years or so?

[Flasch186]

Originally Posted by JPhillips

I sort of understand the moral argument, but in our system it is foolish not to walk away. Banks and businesses walk away from bad investments all the time and nobody thinks anything of it. When an individual does it, however, people lay the wood to them. The people made a bad investment and are looking at using legal avenues to limit their liability. If that's acceptable for businesses, why is it unacceptable for individuals?

I think that this is the avenue Im thinking. If it hits taxpayer's than there is another layer that must be taken into consideration but I havnt heard that that's a possibility. I dont see the moral argument or judgment on this...
theyre not asking for a bailout.

[Flasch186]

Originally Posted by Mizzou B-ball fan

I agree with you. The moral hangup comes from the thought that your parents agreed to pay the loan. If it was your best friend offering you a $1,000 loan, you certainly wouldn't walk away without paying, though your friend might agree to give you a bit more time. It seems a bit off to walk away from a loan just because the property value has dropped off. With that said, it is within your parents' rights to do exactly that. And I can guaranted that the bank wouldn't try to work out anything at all if the property value was high and your parents couldn't afford to make payments. It goes both ways.

the only problem I have above is drawing the the correlation between the bank and a friend. The friend would loan the money without interest (i'd hope) and probably not draw up papers for collateral. The bank is not your friend. I think we agree but my parents are somewhat stuck on the stigma stuff. You are 100% correct that the bank's are only helping those when they think it makes financial sense to do so for them and no one else.

[Fidatelo]

I don't believe it should be acceptable for businesses either.

[Fidatelo]

Originally Posted by JonInMiddleGA

Where the hell have you been for the past 40 years or so?

Canada?

[JonInMiddleGA]

Just in the interest of me being (slightly) less lost: Is this their only home we're talking about? As I (mis?)understood things, this is a second home, right?

If it is indeed a second home (intended for retirement or whatever) then I have a tough time imagining they don't number amongst their friends some people who are bank shareholders.

And since the whole reason this has come up is that the property is worth less than the amount owed, this sure does look like a case of screwing your friends (albeit by proxy/with some distance).

[Flasch186]

LOL, man Jon that's a reach.

You're a capitalist righty, you should be applauding their financial smarts in this case or is that only reserved for businesses? The banks just wrote off billions, individuals cant? How unfair and incongruent with your other stances regarding personal responsibility. They are taking it upon their own shoulders to solve their issue without leaning on the government or you or me in spite of being on the end of people's noses and the stigma attached. They would be following the contract the bank signed with them and giving up the collateral without a fight. Whats good for the goose should be good for the gander, IMO. Better IMO to foreclose now and deal with that stigma than deal with the worse stigma of having to declare bankruptcy a year from now, and still come out of it with most of the same debt that forced them into bankruptcy in the first place.

At least Fid, said he thought it not right for banks either although they just foreclosed on BILLIONS of debt and their stock price went down (which could be viewed as their credit score)....sounds even handed to me.

[Flasch186]

BTW Mizzou the friend scenario would completely be about morals and i would be standing lock armed with Fid and Jon but not when it's a bank on the other side of table, interest is attached, collateral put up, and had the die rolls been different they would gladly act in their best interest with no feelings towards morality in their treatment of you.

[JonInMiddleGA]

Originally Posted by Flasch186

LOL, man Jon that's a reach.

Not much of a reach in my world. I would take a dim view of someone who screwed my investment & trust in their word in order to improve their own finances. I would take it personally actually, and so would many of the people I know (I've seen it happen). And if they're in the position of owning a second home, I have to figure their world isn't completely dissimilar to the one I live in. A significant difference in the perception & fallout could easily be found though, if they're dealing with a mega-bank instead of the smaller ones that I always try to work with. I mean, I personally know every board member of at least three different banks I've done business with, and key figures at several others. That's a different deal (in terms of being aware of a situation) than being one of the millions of anonymous shareholders in Citibank.

They are taking it upon their own shoulders to solve their issue without leaning on the government or you or me

That's the thing, they aren't doing it without taking advantage of someone -- namely the bank shareholders.

That's not to say it isn't the best choice for their own finances. But that doesn't make it any less distasteful. The two things (ethical behavior & maximizing fiscal gain) don't always go hand in hand. The money I've left on the table over the past decade in business makes me very conscious of that separation.

editing to add for clarity -- The distinction I intended to draw between the smaller banks & the jumbo ones has nothing to do with the ethics of the situation. I was simply talking about the difference it can make in the amount of fallout from it.

[wade moore]

Originally Posted by Flasch186

Not sure how you get that from the above. What is the bailout theyre asking for? They would be giving back the home to the bank as the collateral promised.

I'm just referring back to other threads on the general subject.

[Flasch186]

if it we're your money, an individual's, that lent to them I would feel completely different but this is Countrywide (who on a sidenote is under investigation for knowingly lying about the value of their assets). I dont feel that anything more than the hit on credit, interest carry, and the collateral is all that should be considered in their agreement. The moral compass would only be one way there, no?

If we're talking about lending amongst friends I am in agreement wholeheartedly with you. If we're talking about a contract as stated with a bank, than I just dont. The bank underwrote the loan and looked at all of the risk involved and charged a premium on interest in accordance to that.

[JonInMiddleGA]

Originally Posted by Flasch186

if it we're your money, an individual's, that lent to them I would feel completely different but this is Countrywide (who on a sidenote is under investigation for knowingly lying about the value of their assets). I dont feel that anything more than the interest carry, and the collateral is all that should be considered in their agreement. The moral compass would only be one way there, no?

Hell, Countrywide might indeed be a whole different kettle of fish ... depending upon whether the loan in question was one of those that (allegedly I guess, not sure what's been proven/admitted vs what is still up in the air) had a lot of monkey business pulled by the lender. Just this weekend there was an article about that in the Atlanta paper.

If we're talking about lending amongst friends I am in agreement wholeheartedly with you. If we're talking about a contract as stated with a bank, than I just dont.

That's probably the difference. I don't see banks/companies as entirely monolithic entities existing without the shareholders behind them. Apparently you do (which isn't uncommon). Most of my friends are investors in one corporate entity or another, to highly varying degrees, so the connection is pretty easy for me to make.