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Hey everyone,
I have been placing calls to several lawyers with my calls not being returned/questions not answered. I hope someone here can give me some advice on my situation.
My husband and I bought a 1/2 of a duplex in 11/05 in Rocklin CA for $250,000. We refinanced to pay off our car and debt in 12/06 for $25,000. We have 2 loans, 1st in an ARM loan ($225,000) which will be adjusting in March and increasing our payment by $500.00 a month. 2nd is a fixed for $55,000.
We are thinking of being foreclosed on. The house is valued at $100,000 less than what we owe due to the current market/area we live in (5 others on my street are in foreclosure). We would not be able to sell for at least 3-5 years and would break even. We could rent a much larger space in a better neighborhood/school district for cheaper. We could not rent it, our mortgage is about $700.00 more than the going rental rate (we would not be able to financially rent another place and pay the $700.00 difference)
With the adjusting ARM, my leaking ceiling, a job offer to move out of the area; I am at a loss of what to do since I can not get a hold of anyone.
I have read that the mortgage company could sue us for the 2nd loan amount. I understand that we could not buy for a couple of years, but that is how long we would have to wait to sell anyways.
Any help/wisdom would be greatly appreciated.
I think people are being very insensitive to you. I feel your pain. I'm going through a similar situation. It's easy for people to be judgemental when they have not gone through this type of financial hardship. I strongly suggest that you sign up with Pre-Paid legal services, you will get A rated legal advise for your state. Do not make a decision until you talk to an attorney. You must have legal consul before proceeding. When the attorney explains the law to you and what your options are you can make a more informed decision.
You are not a bad person!! Don't allow yourself to feel bad, you must look at it as a family business decision. Look out for your self believe, me the lenders are looking out for themselve. If you decided to go ahead with the foreclosure carefully guard whatever money you make. Don't keep much of it in the bank or other investments. Put 10% of your money in off shore accounts, keep cash in a fireproof safe in your home. Don't use credit, pay cash for everything if your bank account show that you are buying luxury items like furniture and TVs you could get yourself in trouble. People survive foreclosures and bankrupcy it is not the end of your financial world.
Be aware it cost lenders a great deal of money to go has far as taking you to court. You need to find out in your state about Judicial and non-Judicial forclosure. Most lenders do a non-judical foreclosure because it is cheaper for them. You have to be careful about home abandonment laws. Don't tell the attorney you want to foreclose because your house value is low, this will not go over well. If you can't afford your payments then tell the attorney that you cannot afford your payments. Lots of people across the country are in the same bad situations.
Also if your car is paid off and you have no debt then you're in better shape then most. Don't give up your good credit rating if you don't have to. It will take years to get it back on track.
California real estate is on the up swing or at least leveling out. If you can afford to sit tight just a little while longer you'll be better off.
One more thing: Call the mortgage company and tell them you can't afford their high adjustable and if they can put it behind the loan. I did this on one of my properties and it worked. Our payment when up $1000.00 per month. I told them if the something wasn't done about the adjustable I would have to let them repossess the house and they postponed the adjustable interest rate for 7 years. Tell your mortgage company you are struggling and they will give you some options. They are not great optioms but they are something. There is also an organization called HOPE that will help you make a deal with the lender.
I hope some of the information helps you. Become a member of Pre-Paid Legal. Get professional advise and be ready with very specific questions. Your going to need alot of legal advise and you can get it for $27 dollars a month. I've on the phone with several attorney's every week and it has not cost me a dime above my monthly membership payment. That's service! And boy have I needed it!
I have been placing calls to several lawyers with my calls not being returned/questions not answered.
Send me $19.95 and I'll send you a DVD titled "How to Take a Hint" plus a bonus DVD, "Top 10 Signs You Are Being Ignored."
Quote:
Originally Posted by lindzmonster
My husband and I bought a 1/2 of a duplex in 11/05 in Rocklin CA for $250,000. We refinanced to pay off our car and debt in 12/06 for $25,000. We have 2 loans, 1st in an ARM loan ($225,000) which will be adjusting in March and increasing our payment by $500.00 a month. 2nd is a fixed for $55,000.
What advice did your real estate attorney give you?
Certainly $150 would be worth knowing what your legal liability is. I mean you have 1/2 a duplex, there's inherent liability risks involving fire, structural damage, etc.
Quote:
Originally Posted by lindzmonster
We are thinking of being foreclosed on.
I think you mean to say a "voluntary foreclosure." Essentially, you turn the property back over to the lender. That's a good idea because it will save you court costs, and legal fees and attorney fees (for the lender, not for you -- you pay your own legal fees and attorney fees), and will tremendously reduce your debt liability.
What did your real estate attorney advise you on involuntary foreclosures?
Oh yeah, you were too cheap to spend the $150 to consult with a real estate attorney before buying. Well, now you must. Funny how things work out. And it will cost more.
Listen to me now, and hear me next Thursday, do not consult with a bankruptcy attorney on the matter of involuntary foreclosure. Get a real estate attorney who will read your mortgage documents and determine if you are allowed to do that, and if you are, whether or not there are stipulations and s/he can guide you so that you do it properly and end up owing the least amount of money.
If you cannot do that, or don't want to do that, then there's another option and that is to file what I call a "preemptive bankruptcy."
Listen to me now and hear me forever: Do not hire a fly-by-night bankruptcy attorney. Any bankruptcy attorney that charges a flat fee or fixed fee is a fly-by-night bankruptcy attorney. You want one that charges by the hour. Yes, it's more expensive, but you brought that on yourself.
Why file bankruptcy? It immediately stops all collection attempts and precludes a foreclosure. If you're already in foreclosure, the proceedings cease immediately. What good does that do for you?
Any decent bankruptcy attorney should be able to drag the proceedings out for 2 to 5 years. And how do you benefit from that? You can get your act together.
That will give you 2-5 years to refinance the loan to something more affordable. If you can't do that or don't want to do that, you can try to sell the house out from under the lender. Your best bet might be to try and find someone to take over the payments. You may have to beg, borrow and steal from family members to get some money together to get a better refinancing package or sell the house.
Once you get the house refinanced, or sell it, or whatever, you can dismiss the bankruptcy with no harm to you.
Just understand that while you are in bankruptcy, you will not qualify for any credit from anyone. That means no new credit cards, no auto loans no nothing, but that's just as well since you've proven you neither need nor deserve additional credit at this time.
I notice you're on the internet, so that means you have too much time on your hands. Why aren't you working? If you're working, then why aren't both you and your husband working two jobs?
You're in debt, you need to be working a full-time job and one or two part-time jobs to pay off your debts. It's people like you that screwed everyone else and got the bankruptcy laws changed.
If you move forward with the bankruptcy, you probably won't qualify for a Chapter 7, so you'll be forced into a Chapter 13, which means you'll have to make payments of at least $100/month but probably in your case about $1,500 to $2,000 per month for 60 months (which is 5 years), before your bankruptcy is discharged.
Now, if you want to walk away from the house, bad move. This is what will happen. Within 120 days, you'll be foreclosed, both lenders will get judgments against you and your husband (assuming both names are on the mortgage) then you'll be issued subpoenas to appear before a debtor's hearing/examination. If you fail to appear you will be in contempt of court, you'll be arrested and imprisoned until your arraignment, and then you'll have to appear before the judge to explain why you blew off his subpoena. You and your husband might lose your jobs because of the time missed from work.
At the debtor's hearing/examination, you'll have to surrender all information related to your bank accounts, assets and provide the name and address of your employer.
If you both work, both of your wages can be garnisheed until you pay off the judgments, which could take 10 to 40 years. Since you'll be missing about 25% of your income, guess what? You'll probably both end up working two jobs to make up for what's being taken through your garnisheed wages. Funny how things work out.
Quote:
I have read that the mortgage company could sue us for the 2nd loan amount. I understand that we could not buy for a couple of years, but that is how long we would have to wait to sell anyways.
You have a 1st and 2nd mortgage. A default on either or both puts the house in foreclosure.
Whether you like it or not, one way or another, you're going to be paying on your 1/2 of a duplex for a long time. The only thing you control is how much you will be paying.
Retain a real estate attorney and see if voluntary foreclosure is an option. If it is, it is not an emotional instant self-gratification decision, it's a stubby pencil, paper and calculator crunch the numbers decision. What will it cost you?
If you file a preemptive bankruptcy, it is not an emotional instant self-gratification decision, it's a stubby pencil, paper and calculator crunch the numbers decision. Can you refinance? How much of the principal will you have to pay off to get a prime mortgage refinance, or to sell it or to get someone to take over payments?
If you move forward with the bankruptcy, it is not an emotional instant self-gratification decision, it's a stubby pencil, paper and calculator crunch the numbers decision. Go to the bankruptcy court's web-site and see what the median income is for your state and family size to determine if you qualify for a Chapter 7 (not likely) or Chapter 13 (most likely). What will your monthly payments be for the next 60 months? Can you afford a $1750/month bankruptcy payment and a $700/month apartment?
If you walk away from it, figure out how much they'll take from you both (if both of you are working) and figure out how many hours you'll need to work at the second job to make up for the loss of income when your wage are garnisheed. Don't forget that judgments might trigger default clauses for your credit cards, so read your card holder agreements to see how high your interest rates will go (probably 29.9%) then calculate your new credit card payments and figure that into your monthly budget, so you don't default on them too or get saddled with horrendous fees when you go over your credit limit because of the higher interest.
Thank you for your post. We have a job offer and are thinking if we should take it and leave the house. What good has come out of owning a home for us. Nothing. I think that we made a horrible decision when we bought the place. It was our first place and we didn't understand what we were getting into. I think that if the bank was to take the house back and we didn't have to pay the difference we would be in a much better financial situation than we are now. I am waiting for the bank to call to see if they can work out a loan modification for us, but I don't think that they will be able to help to much.
So is this why people who get into foreclosure also declare bankruptcy? Which I do not want to do.
Own up to your responsibilities and pay your debts. If everyone takes the foreclosure route our whole country is going to go down the tubes!
I owned a condo that I overpaid in 1988 for 16 years before I recouped my initial investment. I rented it and was able to take the loss and balance it against some of the gains I managed to realize in other investments. You could do the same if you rent out the whole property and move somewhere else.
Nothing personal, but I'm tired of everyone just trying to dump their burden on the rest of us.
You signed the papers. They are called promisory notes for a reason!
Just because the bank takes back the house doesn't mean you're not responsible for paying the loan back. The bank will sell the house for what it can get, then hold you responsible for the balance. Before letting any foreclosure happen, you should talk the bank about your concerns and see if it's possible to re-fi again to an amount you can afford.
i agree with this. if you think you're between a rock and a hard place you must know what the banks are going through.
if i were you i would sit down and have a serious heart to heart with the banks. worst case scenario for them is to foreclose. worse case scenario for you is that they foreclose get very little for the place and you still have a massive balance and are forced to aay or file for bankruptcy.
so you are going to have to sacrifice moving out and doing what you want but the bank should be willing to sacrifice a percentage point or two and give you a fair refinance deal. don't neglect them problem as they will slap on fee after feecall them find out who makes the decision and call, visit, stalk that person until you get a decision.
if they continue to ignore you, post them the keys, withdraw all your cash and credit, sell what you can on ebay and buy a backpack and go touring around the world on a shoestring! lol
Send me $19.95 and I'll send you a DVD titled "How to Take a Hint" plus a bonus DVD, "Top 10 Signs You Are Being Ignored."
What advice did your real estate attorney give you?
Certainly $150 would be worth knowing what your legal liability is. I mean you have 1/2 a duplex, there's inherent liability risks involving fire, structural damage, etc.
I think you mean to say a "voluntary foreclosure." Essentially, you turn the property back over to the lender. That's a good idea because it will save you court costs, and legal fees and attorney fees (for the lender, not for you -- you pay your own legal fees and attorney fees), and will tremendously reduce your debt liability.
What did your real estate attorney advise you on involuntary foreclosures?
Oh yeah, you were too cheap to spend the $150 to consult with a real estate attorney before buying. Well, now you must. Funny how things work out. And it will cost more.
Listen to me now, and hear me next Thursday, do not consult with a bankruptcy attorney on the matter of involuntary foreclosure. Get a real estate attorney who will read your mortgage documents and determine if you are allowed to do that, and if you are, whether or not there are stipulations and s/he can guide you so that you do it properly and end up owing the least amount of money.
If you cannot do that, or don't want to do that, then there's another option and that is to file what I call a "preemptive bankruptcy."
Listen to me now and hear me forever: Do not hire a fly-by-night bankruptcy attorney. Any bankruptcy attorney that charges a flat fee or fixed fee is a fly-by-night bankruptcy attorney. You want one that charges by the hour. Yes, it's more expensive, but you brought that on yourself.
Why file bankruptcy? It immediately stops all collection attempts and precludes a foreclosure. If you're already in foreclosure, the proceedings cease immediately. What good does that do for you?
Any decent bankruptcy attorney should be able to drag the proceedings out for 2 to 5 years. And how do you benefit from that? You can get your act together.
That will give you 2-5 years to refinance the loan to something more affordable. If you can't do that or don't want to do that, you can try to sell the house out from under the lender. Your best bet might be to try and find someone to take over the payments. You may have to beg, borrow and steal from family members to get some money together to get a better refinancing package or sell the house.
Once you get the house refinanced, or sell it, or whatever, you can dismiss the bankruptcy with no harm to you.
Just understand that while you are in bankruptcy, you will not qualify for any credit from anyone. That means no new credit cards, no auto loans no nothing, but that's just as well since you've proven you neither need nor deserve additional credit at this time.
I notice you're on the internet, so that means you have too much time on your hands. Why aren't you working? If you're working, then why aren't both you and your husband working two jobs?
You're in debt, you need to be working a full-time job and one or two part-time jobs to pay off your debts. It's people like you that screwed everyone else and got the bankruptcy laws changed.
If you move forward with the bankruptcy, you probably won't qualify for a Chapter 7, so you'll be forced into a Chapter 13, which means you'll have to make payments of at least $100/month but probably in your case about $1,500 to $2,000 per month for 60 months (which is 5 years), before your bankruptcy is discharged.
Now, if you want to walk away from the house, bad move. This is what will happen. Within 120 days, you'll be foreclosed, both lenders will get judgments against you and your husband (assuming both names are on the mortgage) then you'll be issued subpoenas to appear before a debtor's hearing/examination. If you fail to appear you will be in contempt of court, you'll be arrested and imprisoned until your arraignment, and then you'll have to appear before the judge to explain why you blew off his subpoena. You and your husband might lose your jobs because of the time missed from work.
At the debtor's hearing/examination, you'll have to surrender all information related to your bank accounts, assets and provide the name and address of your employer.
If you both work, both of your wages can be garnisheed until you pay off the judgments, which could take 10 to 40 years. Since you'll be missing about 25% of your income, guess what? You'll probably both end up working two jobs to make up for what's being taken through your garnisheed wages. Funny how things work out.
You have a 1st and 2nd mortgage. A default on either or both puts the house in foreclosure.
Whether you like it or not, one way or another, you're going to be paying on your 1/2 of a duplex for a long time. The only thing you control is how much you will be paying.
Retain a real estate attorney and see if voluntary foreclosure is an option. If it is, it is not an emotional instant self-gratification decision, it's a stubby pencil, paper and calculator crunch the numbers decision. What will it cost you?
If you file a preemptive bankruptcy, it is not an emotional instant self-gratification decision, it's a stubby pencil, paper and calculator crunch the numbers decision. Can you refinance? How much of the principal will you have to pay off to get a prime mortgage refinance, or to sell it or to get someone to take over payments?
If you move forward with the bankruptcy, it is not an emotional instant self-gratification decision, it's a stubby pencil, paper and calculator crunch the numbers decision. Go to the bankruptcy court's web-site and see what the median income is for your state and family size to determine if you qualify for a Chapter 7 (not likely) or Chapter 13 (most likely). What will your monthly payments be for the next 60 months? Can you afford a $1750/month bankruptcy payment and a $700/month apartment?
If you walk away from it, figure out how much they'll take from you both (if both of you are working) and figure out how many hours you'll need to work at the second job to make up for the loss of income when your wage are garnisheed. Don't forget that judgments might trigger default clauses for your credit cards, so read your card holder agreements to see how high your interest rates will go (probably 29.9%) then calculate your new credit card payments and figure that into your monthly budget, so you don't default on them too or get saddled with horrendous fees when you go over your credit limit because of the higher interest.
All of this would be good advise, if it wasnt for the fact that its WRONG.
Quote:
Originally Posted by Mircea
Now, if you want to walk away from the house, bad move. This is what will happen. Within 120 days, you'll be foreclosed, both lenders will get judgments against you and your husband (assuming both names are on the mortgage) then you'll be issued subpoenas to appear before a debtor's hearing/examination. If you fail to appear you will be in contempt of court, you'll be arrested and imprisoned until your arraignment, and then you'll have to appear before the judge to explain why you blew off his subpoena. You and your husband might lose your jobs because of the time missed from work.
At the debtor's hearing/examination, you'll have to surrender all information related to your bank accounts, assets and provide the name and address of your employer.
If you both work, both of your wages can be garnisheed until you pay off the judgments, which could take 10 to 40 years. Since you'll be missing about 25% of your income, guess what?
Whether you like it or not, one way or another, you're going to be paying on your 1/2 of a duplex for a long time. The only thing you control is how much you will be paying.
Whats wrong about all of this? Well you dont even know if the OP is in a recourse, or non-recourse state. Some states allow the banks to come after those that sign a mortgages, others dont after a default and foreclosure.
In addition, just because a bank can come after you, doesnt mean they will. I have NEVER heard of a bank going after someone after a sheriff sale and foreclosure. Not saying it doesnt happen but a bank is not about throwing good money after bad, and they cant even begin to sue someone until the re-sale has gone through because you can only sue for out of pocket losses, which cant be calculated until a property is sold, which normally can take years.
Best advise to the OP, if your going to let your home be foreclosued upon, go into the bank and negotiate a deal that will not allow them to come after you for your losses. Your saving the bank money by not making them go through the foreclosure process, your getting the security of knowing you can walk away. The process is known as a recoursable "deed in lien of foreclosure"
What happens when your 1st loan has already forclosed and the 2nd still is asking for money? do you pay them or do you just ignore it? sorry I know this is off subject but I really need some answers?
What happens when your 1st loan has already forclosed and the 2nd still is asking for money? do you pay them or do you just ignore it? sorry I know this is off subject but I really need some answers?
Jerry:
The real deal is that you are personally liable for the debt. In some states the hassle for the lender to collect is high and they do not bother, but in many others the lender can and does have a lot of power to collect. If you do not pay your debt you could, in some states, have a court ordered judgement that could include an examination of your assets. This is quite rare, but a possibility.
The fact that the first mortgage has been foreclosed is mostly irrelevant, that just means that the security for the lender is GONE, unless through some miracle the 1st lender sells the place for more than is owed and the lenders worked out an agreement to split proceeds. The odds of that are tiny...
If you would have gone to court and/or gotten an attorney you would have had all this spelled out for you, but I am thinking that did not happen. It might still be useful to get to a legal aid type clinic with ALL THE DOCUMENTS that you have been served with and try to sort out what, if anything can be done at this late date.
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The house is valued at $100,000 less than what we owe due to the current market/area we live in (5 others on my street are in foreclosure). We would not be able to sell for at least 3-5 years and would break even. We could rent a much larger space in a better neighborhood/school district for cheaper. We could not rent it, our mortgage is about $700.00 more than the going rental rate (we would not be able to financially rent another place and pay the $700.00 difference)
Ugh.
