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I thought mediation was designed to help a homeowner stay in his home. I have an Interest Only ARM loan which I wanted to change to a fixed rate. I could not get re-financing from Bank of America because the house which was originally valued at $400,000 is now only worth $180,000 at most. So I decided to try the mediation approach. I wasn’t asking for a reduction in the principle. All I really wanted was to get into a fixed rate.
Unfortunately, the only way to force the bank into mediation was to stop making payments so that they could start a foreclosure. You can’t get a mediation scheduled unless a Notice of Default and an Election to Sell is issued by the bank. Although I stopped payments, I put that money aside thinking that the bank would accept the late payments once the mediation took place.
After spending $3,000 in attorney fees and $200 for the mediation fee, I finally got my mediation meeting. I knew that the bank would not be able to foreclose on me unless they were able to get a certificate stating that they negotiated in good faith. Their idea of good faith was to offer me a chance to do a Sort Sale. Of course I didn’t want to do the Short Sale because I wanted to stay in my home. The bank refused to make any other offer and I refused the Short Sale offer.
The mediator made the conclusion that we could not reach an agreement, and issued the bank the certificate that would allow them to continue with the foreclosure. So, now I’m about to lose my home simply because I wanted to get my Interest Only ARM switched to a fixed rate.
I can’t understand why the bank was so set on a Short Sale which would probably get them $165,000 to $200,000 where had they changed me to a fixed rate, they would have gotten the entire $400,000. This leads me to believe that the banks are benefiting more from short sales than what we think. Does this have anything to do with the government bailout program?
oh lets be serious. NOTHING was put in place to help the average joe. It was all about the corporations and their money. sorry for you
What he said...... We'll bail them out and pay for their wars and foreign aid. We'll pay for welfare. And UI(one way or another we DO pay for it). We'll fund SS. I'm not saying these things are good or bad, they just are.
But don't ever think the government is there to help you. All you have is a vote, you have no power.
Isn't it already? It seems like everyone is short selling these days. When your house is underwater it's the only way you can sell your house, unless you bought before the market blew up.
I thought mediation was designed to help a homeowner stay in his home.
Mediation was designed as a quicker and cheaper alternative to going through the court system. They just assist the parties in reaching a mutually satisfactory settlement when some agreement has been broken.
There isn't a system set up to keep homeowners in their home, particularly if they haven't been able to live up to their end of the agreement of whatever it was they originally signed to get the house in the first place.
However, that being said. Maybe you should have looked for another mediator. Some mediators can be in favor of the banks in some way or another. I mean, if you think about it, a great way for mediators to stay in business, is to favor in banks, so that banks continue to use their services as mediators.
If it is court-given mediator, this might not be the case. But nontheless, it sounds like your particular mediator didn't look at all that many alternative solutions beyond the bank's rigid 'short sale' stance, and your solid 'stay in the home' stance.
I thought mediation was designed to help a homeowner stay in his home. I have an Interest Only ARM loan which I wanted to change to a fixed rate. I could not get re-financing from Bank of America because the house which was originally valued at $400,000 is now only worth $180,000 at most. So I decided to try the mediation approach. I wasn’t asking for a reduction in the principle. All I really wanted was to get into a fixed rate.
Unfortunately, the only way to force the bank into mediation was to stop making payments so that they could start a foreclosure. You can’t get a mediation scheduled unless a Notice of Default and an Election to Sell is issued by the bank. Although I stopped payments, I put that money aside thinking that the bank would accept the late payments once the mediation took place.
After spending $3,000 in attorney fees and $200 for the mediation fee, I finally got my mediation meeting. I knew that the bank would not be able to foreclose on me unless they were able to get a certificate stating that they negotiated in good faith. Their idea of good faith was to offer me a chance to do a Sort Sale. Of course I didn’t want to do the Short Sale because I wanted to stay in my home. The bank refused to make any other offer and I refused the Short Sale offer.
The mediator made the conclusion that we could not reach an agreement, and issued the bank the certificate that would allow them to continue with the foreclosure. So, now I’m about to lose my home simply because I wanted to get my Interest Only ARM switched to a fixed rate.
I can’t understand why the bank was so set on a Short Sale which would probably get them $165,000 to $200,000 where had they changed me to a fixed rate, they would have gotten the entire $400,000. This leads me to believe that the banks are benefiting more from short sales than what we think. Does this have anything to do with the government bailout program?
I feel your pain, and it's enough to make someone want to puke from the stress. What you're asking for though is not realistic. You are asking for the bank to refinance a home at 50% of its value. The bank needs to get rid of that asset.
It's my impression that banks consider not just your ability to pay now, but your probability of trying to cut your losses later. If you are spending over 40% of your income (hypothetically), that presents a risk. Lenders will eat it on the short term with a short sale of a property like yours, but eventually they will be able to secure new money to loan once they get rid of risky assets like your home.
Does the money from the TARP have anything to do with it? I think so. Banks have used that money to recapitalize and get rid of toxic assets (like your mortgage). Our government has the printing presses going 24/7 in an attempt to kick this whole mess furhter down the street. They are pumping billions of dollars into the same scenario that got us here in the first place.
Also, this thread is not Vegas specific and belongs in the mortgage forum.
I thought mediation was designed to help a homeowner stay in his home. I have an Interest Only ARM loan which I wanted to change to a fixed rate. I could not get re-financing from Bank of America because the house which was originally valued at $400,000 is now only worth $180,000 at most. So I decided to try the mediation approach. I wasn’t asking for a reduction in the principle. All I really wanted was to get into a fixed rate.
Unfortunately, the only way to force the bank into mediation was to stop making payments so that they could start a foreclosure. You can’t get a mediation scheduled unless a Notice of Default and an Election to Sell is issued by the bank. Although I stopped payments, I put that money aside thinking that the bank would accept the late payments once the mediation took place.
After spending $3,000 in attorney fees and $200 for the mediation fee, I finally got my mediation meeting. I knew that the bank would not be able to foreclose on me unless they were able to get a certificate stating that they negotiated in good faith. Their idea of good faith was to offer me a chance to do a Sort Sale. Of course I didn’t want to do the Short Sale because I wanted to stay in my home. The bank refused to make any other offer and I refused the Short Sale offer.
The mediator made the conclusion that we could not reach an agreement, and issued the bank the certificate that would allow them to continue with the foreclosure. So, now I’m about to lose my home simply because I wanted to get my Interest Only ARM switched to a fixed rate.
I can’t understand why the bank was so set on a Short Sale which would probably get them $165,000 to $200,000 where had they changed me to a fixed rate, they would have gotten the entire $400,000. This leads me to believe that the banks are benefiting more from short sales than what we think. Does this have anything to do with the government bailout program?
The bank is not nuts. You are extremely likely to end up foreclosed that far underwater so they don't want to deal with it. Note that they likely have no real choice. The banks are mostly front end and servicers of mortgages. They actually own very few. Nobody is going to buy a loan on a property at twice its real value.
So go short sell. Quickly. Far better than a foreclosure.
And you have few option left. So minimize the damage. Rent a home in the same neighborhood. Hang on a couple of years, build up some cash and buy back in.
I have been recently been informed by lenders that short sales aren't better for the credit than a foreclosure. IN fact it can be worse, now when a buyer wants to get a loan after 3 years which is the same wait time as a foreclosure, the bank will want to have a buyer show why they did a short sale. If it was because of financial hardship or if the buyer did the buyer do a strategic walk away purely because the home was upside down and the buyer had the money at the time to pay the note.
If it was the later getting a loan will be much harder for a long time.
Fannie Mae has instituted new guidelines [SIZE=2]Fannie said that borrowers who default when they are able to pay won’t be able to get another Fannie Mae mortgage for seven years. The current wait is five years. While that might sound like an empty threat, in an environment where Fannie Mae and Freddie Mac are providing most home financing, it may have some teeth.[/SIZE]
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