Sorry this is long but I need to vent and get advice. I'm scared.
I filed BK 7 in 2008 and included my house and a 2nd mortgage. I never reaffirmed. I stopped paying the 2nd mortgage 28 months ago. It had a balance of $37,000 and they said that they would "consider" an offer of $10,000 from me. No guarantees though. It's with DCU. This was over a year ago. God only knows what the balance is now.
We're at a point where we are thinking about moving, or possibly staying if I can reduce the amount of my mortgage with a lower interest rate. We currently have an FHA loan @ 5.5%. We've paid 7 years already and have a balance of $161,000.
I called Wells Fargo to get info on a refi and they said that they couldn't help me unless I re-open the BK case, reaffirm the mortgage and then they would be able to help me, but since the PMI rate has gone up I would only be saving $115.00 per month and I would be starting over at 30 years again. Totally not worth it. I don't think that I qualify for a mod because my income is over the guidelines. Not to mention that the 2nd mortgage would just be looming in the background waiting for equity and then take the house away, or demand full payment, since they know they have me in a corner.
The financial problem that I have is that right now I have to pay for private school. The elementary school, middle school and high school in my district are under performing and my children would be a minority. Right now, private school is stretching it a bit, but we could make it. But when my daughter gets to high school (3 years) I just seriously can't afford private school tuition, especially for 2 kids. I'm not even sure the current private school is going to be able to meet my kids' needs because of disabilities they have. The school isn't really staffed to deal with them, and I don't think they know how to really. It's a struggle.
I am SO SCARED not to pay the mortgage. I like this house and wouldn't mind staying but I have to keep in mind my mortgage payment + private school and weigh my options of moving to a larger house that would better suit us, and putting them in a great public school so they get the academic help they're going to need.
Anyway - I guess I just want to know what to expect when I stop paying. I owe 161,000 and my BIL's house that has one less bedroom just appraised for $157,000. We also have a FC on our street, same style house but not as nice as ours and it's listed for 80,000 and under contract now.
HELP!! Any thoughts or advice are greatly appreciated.
I'm scared. I'm not going to make my mortgage payment
Started by
Auto_Body_Chick
, Jun 06 2012 06:10 PM
15 replies to this topic
#1
Posted 06 June 2012 - 06:10 PM
#2
Posted 07 June 2012 - 05:35 PM
Tough one. I know you are deep in emotion here since this decision is largely about kids receiving what you hope to be able to provide them, and no doubt will. For me, I will attempt to not deal with the emotional side of this and just deal with the numbers part of it. Hopefully you can pull from that something that works for you.
Based on what I can only perceive the cost of private school to be for two kids, it sounds like a move would be the best option, providing that the school system meets their needs. Also assuming that this saves you the cost of private school. There is a number at HUD that you can call for FHA loans for mods or to avoid foreclosure, but you said you no doubt make too much money to qualify. They may or may not take into account the cost of private educ, but my inclination is that they will. I would contact them and at least discuss the possibility.
On modifications usually if the 1st will consider the Mod, then a prequisite is that the 2nd must also do a mod, and if so this would eliminate your concern over the 2nd gaining equity and foreclosing. So much of this question is more about intangibles than bricks and mortar or mtg pymts, so it is hard to give a good answer here. Good luck on it.
One last thought, for WAMU to even suggest that you reopen the Bk and reaffirm the mtg I think is a violation of the stay. if that isn't a direct attempt to enforce or collect a debt then I don't know what is? They could have said this 10 other ways, I suppose.
Based on what I can only perceive the cost of private school to be for two kids, it sounds like a move would be the best option, providing that the school system meets their needs. Also assuming that this saves you the cost of private school. There is a number at HUD that you can call for FHA loans for mods or to avoid foreclosure, but you said you no doubt make too much money to qualify. They may or may not take into account the cost of private educ, but my inclination is that they will. I would contact them and at least discuss the possibility.
On modifications usually if the 1st will consider the Mod, then a prequisite is that the 2nd must also do a mod, and if so this would eliminate your concern over the 2nd gaining equity and foreclosing. So much of this question is more about intangibles than bricks and mortar or mtg pymts, so it is hard to give a good answer here. Good luck on it.
One last thought, for WAMU to even suggest that you reopen the Bk and reaffirm the mtg I think is a violation of the stay. if that isn't a direct attempt to enforce or collect a debt then I don't know what is? They could have said this 10 other ways, I suppose.
#3
Posted 19 June 2012 - 04:35 PM
The thing is, without having reaffirmed they can foreclose at any time. That's what an attorney told my friend and I when I went with her for a consultation with him.
If you shouldn't reaffirm the house due to reaffirming an upside down house, then perhaps you should consider just letting it go and move to where the schools are better and you wouldn't have the extra expense of private school.
I don't know what state you are in. In Ohio, they must sue to get judgment, then have an auction to change title back to the bank.
Do you know what the foreclosure laws are in your state?
If you shouldn't reaffirm the house due to reaffirming an upside down house, then perhaps you should consider just letting it go and move to where the schools are better and you wouldn't have the extra expense of private school.
I don't know what state you are in. In Ohio, they must sue to get judgment, then have an auction to change title back to the bank.
Do you know what the foreclosure laws are in your state?
#4
Posted 19 June 2012 - 04:56 PM
I'm in IL. It's a judicial foreclosure state. I know I have time. Now I have a new question which I am going to make a separate post on. Thanks!!
#5
Posted 19 June 2012 - 05:07 PM
The thing is, without having reaffirmed they can foreclose at any time. That's what an attorney told my friend and I when I went with her for a consultation with him.
And let me guess, this Atty was not a specialist in Foreclosure only. Not trying to be argumenative here but you could choke a horse with the erroneous answers on the subject from Attys. I have heard them by the bucket load, and yes, from Attys.
Secondly, if the note is discharged in Bk and not reaffirmed by the Debtor there is usually a reason for this. 99 out of 100 it is due to an underwater equity situation. So which lender in their right mind is going to foreclose if they are not in an equity position? Some day there may be an equity position then there is a SOL of issue to be concerned about. They do not have unlimited time in which to wait for a remedy.
What is far more prevalent today is that a defaulted 2nd mtg disch in Ch 7 are fairly easy to settle by the former debtor for pennies on the dollar. e.g. 50K mtg = 3K, 5K or 10K settlement. This negotiation takes some skill and finesse to complete and maybe should be accomplished by a debt negotiation pro unless the former debtor and proeprty owner is highly skilled themselves. Just how it works these days in many case studies.
#6
Posted 19 June 2012 - 05:16 PM
My BK atty tried to tell me that I should sign a reaff on the 1st and 2nd. He was shocked when I told him that I was going to stay and pay. I asked him what would happen if I didn't sign the papers and he flat out told me "then you're not going to live there for long". I told him I would take my chances. It's been 4 years and I am still here. This is the 1st month I haven't made a 1st mortgage payment. I am hoping for a mod, refi or we'll move. My husband can buy a house in a better school district with half the interest rate we're paying now.
Edited by Auto_Body_Chick, 19 June 2012 - 05:17 PM.
#7
Posted 21 June 2012 - 12:47 PM
Then perhaps that's just what you should do. If I'm not mistaken, since there was no reaffirmation, then you shouldn't have any negative reporting on your credit reports..My BK atty tried to tell me that I should sign a reaff on the 1st and 2nd. He was shocked when I told him that I was going to stay and pay. I asked him what would happen if I didn't sign the papers and he flat out told me "then you're not going to live there for long". I told him I would take my chances. It's been 4 years and I am still here. This is the 1st month I haven't made a 1st mortgage payment. I am hoping for a mod, refi or we'll move. My husband can buy a house in a better school district with half the interest rate we're paying now.
#8
Posted 24 June 2012 - 06:09 PM
Then perhaps that's just what you should do. If I'm not mistaken, since there was no reaffirmation, then you shouldn't have any negative reporting on your credit reports..
My BK atty tried to tell me that I should sign a reaff on the 1st and 2nd. He was shocked when I told him that I was going to stay and pay. I asked him what would happen if I didn't sign the papers and he flat out told me "then you're not going to live there for long". I told him I would take my chances. It's been 4 years and I am still here. This is the 1st month I haven't made a 1st mortgage payment. I am hoping for a mod, refi or we'll move. My husband can buy a house in a better school district with half the interest rate we're paying now.
Correct, NO negative reporting on credit report. But, the negative comes in when folks realize that they barred from participating in an FHA or FNMA loan for 3 yrs from the date of transfer of the property back to the lender or 3rd party in a short sale or foreclosure. This is perhaps a larger penalty than negative cr. I realize that since ABC's husband can make the purchase based solely on his income that this will not affect her but most do not have this option so they wait, and rent, and wait and rent, etc, until the 3 yr moratorium has run its course. Again, the above has nothing to do with cr reporting.
#9
Posted 20 July 2012 - 10:01 PM
Well, I'm on month two of no payments. I called for a modification today and after being on the phone for an hour and a half, was told that I would be getting a package in the mail. I guess its a preliminary approval? She said the final approval comes from the underwriter.
I'm not thrilled about starting over with another 30 year mortgage. I guess we will see what they say about the payment, interest rate, etc. We may still move. She said that we should continue to make payments because not making payments affects the new mortgage payment?
She tried to pull my CR and experian was frozen so she told me I had to unfreeze it before we could proceed. I'm supposed to call her Monday.
What should I expect now?? She did tell me that she has seen people in IL 13 months behind and not in FC yet. That was comforting.
I'm not thrilled about starting over with another 30 year mortgage. I guess we will see what they say about the payment, interest rate, etc. We may still move. She said that we should continue to make payments because not making payments affects the new mortgage payment?
She tried to pull my CR and experian was frozen so she told me I had to unfreeze it before we could proceed. I'm supposed to call her Monday.
What should I expect now?? She did tell me that she has seen people in IL 13 months behind and not in FC yet. That was comforting.
#10
Posted 21 July 2012 - 05:42 AM
Well, I'm on month two of no payments. I called for a modification today and after being on the phone for an hour and a half, was told that I would be getting a package in the mail. I guess its a preliminary approval? She said the final approval comes from the underwriter.
I'm not thrilled about starting over with another 30 year mortgage. I guess we will see what they say about the payment, interest rate, etc. We may still move. She said that we should continue to make payments because not making payments affects the new mortgage payment?
She tried to pull my CR and experian was frozen so she told me I had to unfreeze it before we could proceed. I'm supposed to call her Monday.
What should I expect now?? She did tell me that she has seen people in IL 13 months behind and not in FC yet. That was comforting.
The package is probably an application for the mod and explains everything you have to send in in detail. If you can, i would continue to make the payments. If you are approved for and finish the mod, whatever you are behind gets rolled up into the loan and amortized accordingly...usually over a new 40 or 30 year term. So the less you have to roll up the better.
Depending on who your servicer is, it can take a minimum of 3 months for the preliminary approval, another 3 months of trial payments and then a few weeks for final mod approval.
We just went through one and were approved. Lowers our payment by about $400 each month and basically has us staying in our house until we die.
Good luck with what you decide.
#11
Posted 25 July 2012 - 08:34 PM
Is this the normal pace??
I am on month 2 of no payments
Last week I called for a loan mod and she told me she couldn't pull my credit because of the freeze. She told me to unfreeze Experian and call her back. I didn't do it yet.
Monday I receive a fed ex envelope which says that I need to provide additional information for my request for mortgage assistance. It says "What we need from you" : Other, additional information. Then it says to overnight it to them. Huh?? Knowing what additional information you'd like me to overnight would be helpful. If this nonsense is what I am going to be dealing with the entire time I am not looking forward to this.
Today I receive a letter from some field services place saying that Wells Fargo has hired them to verify the property is occupied. They asked me to fill out the form and mail it back. Should I do this?
Holy crap! I am getting scared. Maybe my foreclosure will go quickly??
I am on month 2 of no payments
Last week I called for a loan mod and she told me she couldn't pull my credit because of the freeze. She told me to unfreeze Experian and call her back. I didn't do it yet.
Monday I receive a fed ex envelope which says that I need to provide additional information for my request for mortgage assistance. It says "What we need from you" : Other, additional information. Then it says to overnight it to them. Huh?? Knowing what additional information you'd like me to overnight would be helpful. If this nonsense is what I am going to be dealing with the entire time I am not looking forward to this.
Today I receive a letter from some field services place saying that Wells Fargo has hired them to verify the property is occupied. They asked me to fill out the form and mail it back. Should I do this?
Holy crap! I am getting scared. Maybe my foreclosure will go quickly??
#12
Posted 31 July 2012 - 08:09 AM
That surprises me! My attorney flat out refused to let us reaffirm. I was terrified of losing our house, didn't want to move, and knew we were going to pay, so against better everything I had read, we asked to reaffirm. He said he would not allow it and sign off unless they significantly reduced our interest or our principal balance. They did not.My BK atty tried to tell me that I should sign a reaff on the 1st and 2nd. He was shocked when I told him that I was going to stay and pay. I asked him what would happen if I didn't sign the papers and he flat out told me "then you're not going to live there for long". I told him I would take my chances. It's been 4 years and I am still here. This is the 1st month I haven't made a 1st mortgage payment. I am hoping for a mod, refi or we'll move. My husband can buy a house in a better school district with half the interest rate we're paying now.
It honestly sounds like your best option is to move to a better district with better schools and a loan with lower interest. That seems like it would have the best benefit to your family in the long run. Good luck!
#13
Posted 12 August 2012 - 04:47 PM
I'm about to be in a similar boat as you, except I'm hoping for a settlement. I filed BK7 a few years ago, am in a ride through too, and my wife did not file. I sent a letter to the CEOs office of our 2nd mortgage letting them know I'm interested in settlement or we plan to walk away. I haven't heard anything yet but it's only been a week and our next payment isn't due for 2 more weeks. It's like a high stakes game of chicken.
If we can settle the 2nd we should be able to break even on the first with a regular sale and hopefully avoid any short sale or foreclosure process.
If we can settle the 2nd we should be able to break even on the first with a regular sale and hopefully avoid any short sale or foreclosure process.
Edited by road2freedom, 12 August 2012 - 04:48 PM.
#14
Posted 16 September 2012 - 11:51 AM
Who is DCU ?
Sorry this is long but I need to vent and get advice. I'm scared.
I filed BK 7 in 2008 and included my house and a 2nd mortgage. I never reaffirmed. I stopped paying the 2nd mortgage 28 months ago. It had a balance of $37,000 and they said that they would "consider" an offer of $10,000 from me. No guarantees though. It's with DCU. This was over a year ago. God only knows what the balance is now.
We're at a point where we are thinking about moving, or possibly staying if I can reduce the amount of my mortgage with a lower interest rate. We currently have an FHA loan @ 5.5%. We've paid 7 years already and have a balance of $161,000.
I called Wells Fargo to get info on a refi and they said that they couldn't help me unless I re-open the BK case, reaffirm the mortgage and then they would be able to help me, but since the PMI rate has gone up I would only be saving $115.00 per month and I would be starting over at 30 years again. Totally not worth it. I don't think that I qualify for a mod because my income is over the guidelines. Not to mention that the 2nd mortgage would just be looming in the background waiting for equity and then take the house away, or demand full payment, since they know they have me in a corner.
The financial problem that I have is that right now I have to pay for private school. The elementary school, middle school and high school in my district are under performing and my children would be a minority. Right now, private school is stretching it a bit, but we could make it. But when my daughter gets to high school (3 years) I just seriously can't afford private school tuition, especially for 2 kids. I'm not even sure the current private school is going to be able to meet my kids' needs because of disabilities they have. The school isn't really staffed to deal with them, and I don't think they know how to really. It's a struggle.
I am SO SCARED not to pay the mortgage. I like this house and wouldn't mind staying but I have to keep in mind my mortgage payment + private school and weigh my options of moving to a larger house that would better suit us, and putting them in a great public school so they get the academic help they're going to need.
Anyway - I guess I just want to know what to expect when I stop paying. I owe 161,000 and my BIL's house that has one less bedroom just appraised for $157,000. We also have a FC on our street, same style house but not as nice as ours and it's listed for 80,000 and under contract now.
HELP!! Any thoughts or advice are greatly appreciated.
#15
Posted 30 October 2012 - 12:38 PM
ABC, that letter you got, was it from Core Logic? They are a company that is hired to send letters, come by and take pics of your house to make sure it isn't vacant or trashed (on the outside). That is for the "insurance" purposes of the loan, IIRC. You can google Core Logic and read up on that. Oh and they are sneaky like when they take pics. I see ads for them on craigslist. They call themselves canvasers or something along those lines. People get paid $5 or $10 a house.
I'm sorry to hear that you are having troubles. When we lived in IL and had a predatory lending home loan, we were there for a long time with no payments. I want to say like 9 months). We stayed til the last minute, too.
Missouri is a lot quicker than Illinois.
I'm sorry to hear that you are having troubles. When we lived in IL and had a predatory lending home loan, we were there for a long time with no payments. I want to say like 9 months). We stayed til the last minute, too.
Missouri is a lot quicker than Illinois.
Edited by NeverQuietHere, 30 October 2012 - 12:39 PM.
#16
Posted 11 November 2012 - 08:55 AM
I'm about to be in a similar boat as you, except I'm hoping for a settlement. I filed BK7 a few years ago, am in a ride through too, and my wife did not file. I sent a letter to the CEOs office of our 2nd mortgage letting them know I'm interested in settlement or we plan to walk away. I haven't heard anything yet but it's only been a week and our next payment isn't due for 2 more weeks. It's like a high stakes game of chicken.
If we can settle the 2nd we should be able to break even on the first with a regular sale and hopefully avoid any short sale or foreclosure process.
IMO, you'll have more leverage if you stop paying first. Then they'll know you mean business. What you have to think about it whether or not it will be in their best interest to FC on you. Will they recover their money? I don't have any equity on my house and DCU (Digital Federal Credit Union) has casually mentioned that they could FC on me. I told them to go right ahead, they'll do all of the dirty work for WF and DCU will get $0. That was the end of that conversation. I have tried to bluff DCU and it didn't work. I owe $37,000 and I have started at $1,800 and gone up to $5,000. They still tell me that we'll start negotiating when I get up to $16,800. Not happening. And that was with me not making a payment in 2.5 years! I wish you luck and hope everything works out. I just got my first collection letter from WF. The lawyer asked me to respond within 30 days or they'll assume the debt is valid. I am looking for stall tactics so I created a separate post for that.
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