Foreclosure: what I have learned (long)

Discussion in 'Random Ramblings' started by cassie, Jul 17, 2011.

  1. cassie

    cassie Overrun With Chickens

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    I just lost my place to foreclosure. Since a lot of people are faced with this now, I thought I would post what I have learned to the forum in the hope it might help someone else.

    The first thing to do when faced with foreclosure is to just sit tight and don’t panic. Then buy the book The Foreclosure Survival Guide. It is published by Nolo and is available from amazon.com. It clearly explains the foreclosure process and details what your options are. Like whether it is to your advantage to try to save the house or if it is in your best interest to just let the bank have it. Also, whether or not to declare bankruptcy at this time. It gives the various state laws and where to find them and where to go for help.

    Mortgage modification and HAMP may not be worth it. There was an article in our local newspaper recently about HAMP and how many people who are actually approved for the mortgage modification are far worse off than they would have been without it. I can tell you from personal experience that the banks are not very cooperative with this process and will string you along for months asking you to refax and resubmit the same material to them multiple times. Even if the banks approve a mortgage modification and reduction in monthly payments, they report the loan as delinquent to the credit reporting agencies. This is true even if the homeowner is current on his modified payments. The bank can and often does demand all the back payments due at once, which may be a lump sum of $15,000 to $30,000 or more, and if it is not immediately forthcoming to proceed with foreclosure and the homeowner ends up losing the property anyway.

    In all probability you will have several months from the time the bank threatens to foreclose and when you absolutely positively have to vacate the premises. This gives you time to decide what you are going to do and, since you are not making the mortgage payments, to save up some money so you can find another place to live.

    In my own case, my husband died, and there was no way I could make the payments without him. Since there was substantially more owed on the place than it was worth, selling was not an option. That combined with the fact that the mortgage company flatly refused to talk to me, and the fact that I did not want to stay here anyway, made my decision to let the bank go ahead and foreclose easy.

    I made my last mortgage payment last September, but the trustee’s sale did not take place until the 6th of June. It is important to know your rights. As soon as the trustee’s sale was held, my phone was ringing off the hook with people telling me truths, half truths, and outright lies. It is important to remember that legitimate companies in all liklihood will not come to you. You need to go to them. There are companies offering to help you stay in your home for seven months or so for a fee of about $700 per month. Apparently they bombard the bank with paper. About two weeks after the sale I found a three day Notice to Vacate taped to my gate. Since I had a renter, I knew the renter had 90 days before he had to leave. I contacted the exit real estate company and the bank and they proceeded to argue with me. I then contacted my congressman. Whatever he did must have worked because I received a paper from the legal firm representing the bank telling me we have to be out by the 15th of September. Just for the record, a three day notice to vacate does not mean the sheriff will be on your doorstep in three days. It just means if you are not gone in three days they will file a wrongful detainer suit to evict you. You have five days, at least in California, to respond to the wrongful detainer suit. After you respond, the case will then be set for trial, probably within 20 days or so. If you lose the wrongful detainer suit you have a few days to vacate before you can be forcibly evicted. So even in a three day notice, you have about 20 days or so to actually move.
     
  2. Yay Chicks!

    Yay Chicks! Chillin' With My Peeps

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    You learned a lot and it was gracious of you to share. I hope that the next few months go smoothly for you and that you find someplace to live where you can be comfortable and at ease.
     
  3. arabianequine

    arabianequine Chillin' With My Peeps

    Apr 4, 2010
    I heard effective in July of this year. Washington governor made it pass that the bank or loan holder has to have a face to face meeting before they can foreclose on a lender to try and work out saving them from loosing their home.
     
  4. arabianequine

    arabianequine Chillin' With My Peeps

    Apr 4, 2010
    I also heard 2 ways of a modification going through one is the balloon payment and then start new monthly payments. The other way is leaving all terms the same but rolling over the owed money to the end of the original loan and then start payments again. It is like starting all over with a new loan again but everything stays the same. It would depend how much equity you had though also. If you have only been paying on your home loan for a year then, you would probably be right back paying the original loan amount but it gets you out of the mess you were in.
     
  5. The Yakima Kid

    The Yakima Kid Cirque des Poulets

    I recommend finding an ethical real estate attorney. I'd avoid the ones who advertise that they do a lot of foreclosures and I'd check with the Bar to make sure they have no complaints or investigations in their history.

    This is so sad. In some states you can file what is known as a "quit claim" and walk away.
     
  6. mom'sfolly

    mom'sfolly Overrun With Chickens

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    My neighbors were offered the roll over loan, they took foreclosure instead. The rollover loan was about $50,000-70,000 more than the house was worth, and $40,000 more than they had originally paid. They first got into trouble with a bank error on the escrow account that doubled their payment, which they could not afford. The house was up for short sale for a short time, and then the remodification process started. With remodification, they were told to stop payment. After about 18 months, the loan remod came through, with all the missed payments, escrow, and fees tacked onto the new loan. The money the bank asked for worked out to over $100/square foot, when the neighborhood is selling at $70-80/ square foot. They obviously didn't take the offer.

    I'm not sure how anyone wins with this system. The homeowner is out of a home, the bank is out of payments, and the bank is left with a devaluing asset. I'm on a cul-de-sac of eleven homes, with three vacant from foreclosure. Two have gone into foreclosure in the last couple of months, the first one was in October. The first one is not yet up for sale, the second, foreclosed in May still hasn't been cleaned out, or had anyone come to the property, and the third the folks moved two weeks ago.
     
  7. KristyHall

    KristyHall Overrun With Chickens

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    Quote:[​IMG]

    you've been through a lot. thank you for this post. it may help someone else.
     
  8. cassie

    cassie Overrun With Chickens

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    mom'sfolly :

    I'm not sure how anyone wins with this system. The homeowner is out of a home, the bank is out of payments, and the bank is left with a devaluing asset. I'm on a cul-de-sac of eleven homes, with three vacant from foreclosure. Two have gone into foreclosure in the last couple of months, the first one was in October. The first one is not yet up for sale, the second, foreclosed in May still hasn't been cleaned out, or had anyone come to the property, and the third the folks moved two weeks ago.

    I didn't mention that after the foreclosure trustee's sale, there is absolutely no telling when the homeowner will be asked to vacate. We attended the trustee's sale for our place. Other than the woman running the sale, we were the only ones there. No one made a bid. Not surprising. The bank was asking waaay more than the place is worth. Since no one bid, title went to the bank. Anyway, we talked a bit to the woman running the sale. She said that she personally knows several people still in their homes three years after the foreclosure sale. That is really to the bank's advantage. Foreclosure properties are just not moving in this area, and it is better for all concerned for someone to be in the house rather than for it to sit vacant. Property listed for sale in this neighborhood is usually on the market for a year or more before it actually sells. Not all banks are bright enough to realize this, however. Wells Fargo wants me out yesterday. I am not sure why. It is not as if they have people lined up to buy this, or any other nearby property. And after we leave the local scavengers will pick the place clean.

    Your best bet really is to be ready to move, but to stay put as long as possible rent free. You can amass quite a nest egg that way. As for me, I do have a nice place to go to. I just need time to get packed up so I can get there. Thanks to the efforts of my congressman, I got it.​
     
  9. mikensara

    mikensara Chillin' With My Peeps

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    [​IMG] has to be tremendously stressful for you. My sil and her hub let their house be foreclosed it was probably for the best they both lost their jobs being downsized. Last time we saw them they were joking about becoming nudists in the woods [​IMG]
     
  10. ChickenLord

    ChickenLord Out Of The Brooder

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    Bless you, good luck, and Godspeed.
     

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