I don't understand all the media saying people are being foreclosed on left and right with no help?

I live in California and because I am upside down in my loan I've stopped making payments (no hardship, I just don't want the condo and am willing to take the hit to my credit for $80K+). I called AHMSI and told them to foreclose. I wasn't interested in keeping it under any circumstances. 4 months later I get a modification offer in the mail last night. One year at 5% interest only (drops a $1860 payment to $900), then the usual rate picks up after a year.

What part of "I DON"T WANT THE CONDO" don't they get?

So in the mean time it looks like I'll live rent free 9 months, bank $16K and they'll still drag their heels.

If you want to keep your home, it appears that AHMSI will offer a mod without you doing anything other than stop making payments.

Thought you might find a timeline for this lender and area (Los Angeles) helpful.

Last mortgage payment July 2008.
I told the lender to foreclose October 2008
Lender sends offer to mod December 2008
I tell lender again to foreclose
Lender sends Notice of Default April 2009
Actual auction date/foreclosure held May 26, 2009
Notice on the door to contact broker repping Bank May 28, 2009
Broker offers cash for keys $1,500 with move out 3rd week in June 2009

Results to me:

Saved $22,000.00 plus $1,500.00 = $23,500.00 cash in my bank account
FICO now 610 (was 805)
No CC's affected (no closures, no limits decreased)

I had planned to rent an apartment and no one had any issue with the credit report. Subsequently I paid cash for a condo (savings from not making mortgage payment + other savings + $20Kresidential loan from my 401K).

Had I not walked away? Owed $210K (original purchase price $222K). Currently worth $90K. Monthly payment (including HOA and taxes) $2K.

Let's say the property would have eeked it's way back up to $210K in 8 years (unlikely, but ya gotta pick some number). That would equate to payments of $192,000.00 down the toilet with not a bit of equity. Instead I saved $23,500.00 in cold cash.

...and they wonder why people walk away.

People who live in non-recourse states, put the pencil to paper and decide whether that "home" is really worth fighting for, agonizing over, or just represents some "idea" of American dream you can't seem to let go of. IMO many, if not most people would be far better off letting go. Get out. Start over. Spend the 9 months to a year of paying YOURSELF the mortgage payment. Bank that cash.

Hi All

This topic is interesting in that yes, some lenders are bending over backwards to help homeowners stay in there homes.
AhMSI will assist people but not until the homeowner is 3-4 months behind on there mortgage.

Everyone situation is different, OP walking away is good for you. Some people are emotionally tied to there home because of children in school system or wanting to live in a specific area etc. Whatever works for you.

Here is something I find interesting.. I now know 4 people in my area that are currently 4-7-8-an has much as 11 months behind on there mortgage payment. They have received no threat of forclosure just some phone calls and each time, they simply say we are waiting to hear from the loss mitigation department to work something out. I also find it interesting that these people are about 150K upside down on there home and are willing to do exactly what you did, just walk. In the meantime they are saving a ton of money.
So if you could beat the system go for it I guess.

Also I am not sure but I am guessing in your State Cali and here in NJ the Courts must be backed up with cases? I hear they are doing them in groups. An if the homeowner appears in court and can show any just causes for an extension they are granted one.
So its just a matter of trying to do what is best for your situation and your family.
Most people that are behind 3 months on there mortgage are not putting the 3 months worth of payments in there bank account they are feeding there family and looking for work.
Good luck to all.

Acesfull

Has the actual foreclosure hit your credit reports yet (you say sale was 5/26)? What about the deficiency balance? Isn't that going to be a headache that follows you for some time?

I totally understand your reasoning and you had a plan while this is going on, but in the long run, I don't know that I'd bank on your credit score remaining at 610. If the foreclosure just took place, there may still be some fall out, especially with the credit card accounts (rate jacking, closing, etc.) that will follow.

Overall, not a bad plan though as far as the cash saved -- definitely something to pick up the pieces with.

Yep, foreclosure is on my report, including the 90+ days late for months now. All my CC are with credit unions who tend to be happy as clams as long as you pay your bills. As to rates, there's been no change but in my case it's moot...I pay in full every month.

In California there is no deficiency balance on a purchase mortgage. You walk away and you're done. The only issue is the foreclosure on your credit report. The IRS doesn't go after you (thank you Bush and Obama) either.