I live in California.

My husband and I have made a lot of mistakes in the past year, and now it's all catching up to us and I think we're going to lose our home...I need help sorting it all out. I am seriously at my wit's end, so if you all could be kind and avoid the "you should have..." statements, I would appreciate it.

At the end of July last year, we both left our jobs. We were miserable and couldn't imagine continuing there, so we decided to work from home as freelance writers. We cashed out our retirement plans to help us get by while we built up our business. I had been working in this capacity on a part-time basis for almost a year.

Anyway, business didn't pick up as much as we thought it would and we didn't chase after it as much as we should have. we spent several months living off our retirement funds, but they dried up in December and we were barely making enough to eat and pay some of the bills...not the mortgage. We have a ridiculously high payment, what with the 80/20 loan. It's an ARM, fixed for 5 years, and we're at the end of year two.

We got the notice in March giving us 3 months before we went into foreclosure. A good friend trained me on doing some web work and gave me a job, but we've been held up by slow clients and I haven't earned enough doing that to pay off what we're behind on, but I'll get SOME of it some time soon. I have two horses I've been trying to sell, but the market is weak and I'm having no luck there yet. My husband has been looking for a job, but no luck. My income is enough that if he had a job, we'd be OK, but he isn't pulling in very much.

So anyway, three months is up and we got a notice of trustee sale today, and it says they will sell our home on July 7th. With no jobs, I can't imagine we'll be able to rent anything. If the horses sell and the web clients pay up, we're saved, but I'm losing hope. Do we have ANY options??

I'm in tears here...please be gentle. I don't even know where to start reading.

First of all, nobody is here to judge. I know it is a scary time but you're certainly by no means alone in your situation.

Have you had any contact with your lender during the times you missed payments? I guess the big question is do you want to keep your home? What are your chances of returning to dependable employment in the near future? I think you need to first formulate a solid plan in terms of income first and then work from there.

Contact your lender and see if there is any relief they can offer. Even though you have a sale date, you may be able to open up the talks to negotiate something.

How far behind are you?

Thank you for your kind response. Our first mortgage has been behind since December and our second since January. We haven't really talked to our lender because we prefer to avoid our problems rather than deal with them. We did talk to them right before we got the notice of default (I think that's what it was called, back in March) and they told us it was too late for a modification or anything; that we just needed to pay up. We do want to keep our home. If he gets a job, we should be fine, income-wise.

So, I guess I need to call my lender, huh?

If it's your intention to stay in your home, I'd definitely get on the phone with them Monday morning. Who is your lender? Are they participating with Making Home Affordable?

A lot of things have changed since March in terms of modifications but, unfortunately, you have to really take the initiative and stay on it - in other words - get in there and prepare for the fight of your life if keeping your home is your ultimate goal.

My lender is First Franklin.

Would Chapter 13 do us any good? what about those lawyers who send us letters saying they can get our loan "corrected" and get us out of foreclosure?

Chapt 13 would stop the sale and allow you time to sort of regroup. As far as the letters you receive offering help to save your home. Basically, it depends on the options that are available through your investor -- if only a certain mod or plan is available or allowed, they really aren't going to be able to force them to do anything you can't do on your own.

I think you should get on the phone to your lender first thing Monday morning. With all the mod requests going on, you're probably going to be on hold for quite a while so be prepared. Have all your financial information ready. Doe their website have any information on any plans available? Are you dealing with the attorney at this point? There are a lot of if's, but you need to get moving and you'll pretty much eat, sleep and breathe house for the few weeks until you come to some conclusion or resolution.

I know it doesn't help much now, but the ideal thing to do would have been to call them back in April to get on some type of forebearance or payment plan.

It may turn out that BK is your best route to give yourself a chance to breathe. That way, you'd be able to pay the back payments over the span of your Chapt 13 plan -- you're going to need steady income though and you're really going to have to live on a strict budget during that plan.

Maybe speak to a bankruptcy lawyer and see what they think. A consultation is usually free.

I think bankruptcy is in our future no matter what, because we're so far behind on everything. (Here's a lesson, kids!) So...if I talk to a bankruptcy lawyer on Monday (and my lender), I'd be able stop this from happening and at least keep my house while we pay for our transgressions?

Well, if you're seriously thinking of bankruptcy, I'd go with the lawyer meeting first - not the lender. I'd spend the weekend getting all your information together, i.e. debts, statements, income, income tax forms, etc. so he or she will have a real clear picture. They can explain the exact process, but once you file it will put a halt to the sale and everything will be on hold. Don't feel bad, many people have gone the route of BK in order to save their homes. It'll at least give you a minute to catch your breath and come up with a plan.

*big, deep breaths* Ok, thank you for the advice...I think that's what we'll do. DH called a lawyer who goes to our church and left him a message, so we'll get that ball rolling on Monday.

Just for informational purposes, because THIS IS NOT GOING TO HAPPEN (she says to convince herself), if we did nothing, what would happen? on July 7th, would someone show up to change the locks and tell us to get out?

That I'm not quite sure of. Here when they foreclose, the sale takes place that date and then you have maybe 30 days to get out? Most people have already abandoned the home before then and it's empty at the time of sale. I imagine they actually have to go through the courts to evict you (the winning bidder). Chances are the bank will bid to take it back.

Good luck to you!

Possibly. CA's right of redemption only applies if the lender uses a judicial foreclosure, which would be uncommon in CA. In most cases it appears that the foreclosure is final on the date of the sale.
Filing chapter 13 would stop the process in it's tracks right up to the sale date. What will happen in a 13 is- you'd be required to make your regular mortgage payments outside the 13 plan, but any arrearages would be added to the plan and repaid over a 3-5 year period. As long as you continue making your regular mortgage payments on time, the lenders would be prohibited from taking any legal action against you for the late payments.

If you have a job with some income coming in, you'd probably qualify for a 13. If your income is low enough relative to your debts, you will probably have a fractional repayment plan where you repay part of your debts and the balances are discharged. These plans can go as low as 0% repayment or as high as 100% repayment, depending on your finances.

A 13 might also allow you to "cram down" the second mortgage to the actual value of the home. If there is not enough value in the home to secure any part of the second mortgage, it can be converted to an unsecured loan by the court and possibly discharged.

Good luck!

Thank you! I just saw on the news that CA put a 90-day moratorium on foreclosures! I'm going to call the lender on Monday to see what that means for us, but it looks like we have another three months to get our act together.

<P>I didn't see anything about an across the board&nbsp;moritorium on foreclosures? Generally the fine print says it only applies to lenders who do not have work out plans (which eliminates almost every lender). <BR><BR>If you do nothing in California, on July 7th the lender will have foreclosed and will be the new owner of your home. Then they "post" your notice to vacate which gives you 72 hours to leave. If you don't leave, then they go to court to begin eviction proceedings (which you also get notice of). You have 5 days to respond in court to the eviction proceeding (and that includes weekends). In other words, you better have an attorney file a response. Basically regardless of your response, once you have your court date (typically somewhere between 20 and 30 days - California has a speedy eviction process) you will lose. So at most you can put off the actual leaving to about 30 days or so after the sale. </P>
<P>You can drag it out a little, but I would plan on leaving myself (unless you file BK, or reinstate full payment including fees). By the way, somewhere after the sale you will probably receive a notice from a broker. Don't avoid them, they are calling to find out how much money you want to leave the property clean and quickly. It's called "cash for keys". Ask for something around $1500 to $2000 and you will probably get it (along with a two week extension).</P>

Uh oh, that's not what I wanted to hear! Thanks for the info...sigh.

Here's a link to one of the news stories: http://cbs5.com/consumer/foreclosure.morat....2.1043671.html

Sorry for the hijack but ...


I am so glad that you posted this as I am in the EXACT same situation.

I only have a first mortgage that is 5 months behind and to get current, I have to pay $15,000.

I just got my foreclosure letter, from a law firm, stating that I have to pay the entire amount of the mortgage, $450,000+

Is this right? Do I have to pay the entire loan amount?

My husband was laid off 6 months ago and my business has been extremely slow for the last 6 months.

I will be filing Chapter 7 on July 1st (paperwork is already done, just need to pay fees).

Business is now picking up fast, and my husband got some training and will be bringing in some really good money starting in August.

I will be able to pay the entire amount past due by July 20th.

So I have a couple of questions:

1) Do I have to pay the entire loan amount or can I just pay the past due?

2) Since the lenders have retained an attorney, about how much in fees should I expect to pay in addition to the past due amount?

I am just like twinkletoz. My name is Taz and I am an avoider.

Ok. I just found out that the lenders have actually filed a Notice of Default on June 2nd.

What do I do now and how much time do I have? (See previous post)

No problem on the hijack...I hope someone can help you.

I talked to my lender yesterday, and the freeze on foreclosures doesn't help me because I already have a sale date...although she said they sometimes voluntarily extend the date. She sent me paperwork to try to do a modification, but with no income I don't know what good it'll do. DH HAS to get a job...and I need to sell more of my work.

Any updates??

So sorry, all, that I didn't come back and update you. The freeze on foreclosures DID help us, and our sale date was pushed off until late September. We have not heard anything since then, so we are assuming it hasn't sold yet. For now, we're basically living rent free and waiting for the shoe to drop, at which point we'll find an apartment. We have made peace with losing the house--after all, it's lost about $70k in value with the way the market is.

We still plan to file for BK, but the lawyer we talked to wanted to charge an arm and a leg. After talking to a good friend who filed hers herself, we've decided to try that. Eventually, we'll get our lives back on track. I ended up taking a job...it doesn't pay much, but it's bringing some money in and I'm still writing. My husband has still not found anything.