Stopped making house payments, what to tell bill collectors

[chet everett]

The odds of being SCAMMED badly by any firm that offers to "rebuy" your mortgage are nearly 100% -- that is simply NOT how the mortgage backed securities business works...

The other info is an interesting view into the situation that I am sure is facing many people; I sincerely hope that things work out as best as can be for Zelva and others.

I do know that most lenders would ABSOLUTELY prefer to merely tack missed payment onto the end of the mortgage, and when they do get sufficiently believable info to support such an arrangement they OFTEN do make such accommodations for EXACTLY the kind of illness like a heart attack. Fortunately MOST people that have heart attacks can get back to work in a fairly short time and go on to live a long life.

Good Luck!

Originally Posted by Zelva

From my own unfortunate experience (we are in construction as well, small general contractor - no jobs, nearly a year) and as soon as I say we have/had a small construction contracting business - in California, there seems IMMEDIATE understanding of our circumstance. Of course, their primary concern is about the payment(s) due..... and they still want that info.

I've explained we are looking for jobs (with others now), etc, etc, and that I cannot predict my (even near) future budget as a result - I can only say what I can do, and am doing, at the moment; ie, I tell them we are selling some equipment so I ->HOPE<- to make a payment by ____ date.

This has drug on for several months now as we dwindled resources, making intermittent payments. Now we are offered a 6-month, 1/2 payment, government assistance type program of some sort. They have sent us papers to sign, to accept the temporary arrangement.

Speaking of MEDICAL issues - a construction friend that had a heart attack (probably impacted by financial pressures) was given 4 months of waived payments (that go to back of loan). That at least helped them, temporarily.

Speaking to CREDIT CARD folks - we do have a few small credit cards and business accounts. I decided they each get to split $___ each month, and that's what I do. They keep calling and I keep telling them and doing the same thing. Because I'm not making the minimum, they keep calling - but that's ok - best I can do, etc. I plan to settle with them some time in the future (BK or otherwise).

They call and I let the msg go to voice mail. They call me many more times than I call them back, but I try to call each one about monthly - I say I'm returning your call as a courtesy - no new income info - I'm still doing my payment plan, etc.

I did SETTLE one small phone book listing account at 50% off!! They sent me a settlement offer - the kind that makes you 'laugh' under the circumstances. (I had quit making payments to 2 phone book listings in my priority decisions.) Basics = The total account balance to end of contract with late fees was about $900, they offered to waive late fees at payoff of about $700, or a laughable payment schedule. I wrote a nice, honest letter back about our circumstances and why their offers didn't fit in any plausible category. I said the best I can do is $350 payoff at this time. THEY ACCEPTED IT and I luckily had the extra $$ to do it at the time.

Meanwhile, we've also applied through a company that negotiates and BUYS our mortgage (among a pool of loans) and then re-fi's back to us at just below current market value. Honestly, it takes a LONG TIME and is still pending, but *IF* successful will lob off over $100,000 in under-water mortgage, albeit a loan shark set-up as well; but ultimately I hope to get rid of the future tax and foreclosure liabilities, if possible. If not, then it will be walk, rent, and BK. We can only do what we can do. We've pulled the last of the rabbits out of our hat.

So, I'm saying, regarding talking to them, I suggest acting like you are interested in remaining in your property and trying, etc, while you see how things unfold and research and make your alternate plans. The bank doesn't really want the house unoccupied YET at least (with thousands of REOs not yet listed, etc, and many, many more on the horizon). So if you can stay for a while, it may be helpful to both parties (lender and borrower) at least temporarily. I think this may be the "new foreclosure".

Wish you the best under the circumstances in these very 'interesting' and BIZARRE times.

[ManofStraw]

To my understanding, Chattycs is deep in debt.
Chattycs should request the mortgage service company, mortgage company, whoever claims the foreclosure to produce the note. This is legal. If nothing else, it buys you more time to figure out what to do instead of making a rash decision. I do not believe they can produce the note.
Do not file bankruptcy. This will do you no good. More harm than good.
There are other ways to overcome your situation. It takes some research, but ask yourself how much is my freedom from debt worth? It's up to you. The answers are out there.

[Zelva]

Thank you Chet - I always like to read your posts - I find them consistently containing valuable info.

I mentioned our friend's medical because Chattycs specifically mentioned, I think, 4 surgeries within the year.

And I know the re-buy mort is a REEEEEEAL gamble - I only mentioned because it is part of my story (and I specifically avoided mentioning company, etc) - and to bring up the related tax and collection consequences of most other options available today. None of it is pretty these days, for so many.

But I do recommend some "I'm trying" communications - and I have to say collectors’ demeanor is nothing like I remember from "the olden days". Most are "nice" these days - I think they've found that to be most beneficial - under these circumstances. And I guess, for me, I didn't want to appear to have abandoned my residence by not answering at all - for what that may be worth. I'm not sure - just relaying my story -- for what it's worth.

[HighPlainsDrifter73]

If your goal is to stay in the house as long as you can without making payments, I would not file bankruptcy until you got notice of foreclosure. At the time you file BK, the filing automatically stops any foreclosure action. This may buy you several more months to help you build up some money for when you will inevitably be forced to move. I have a friend in exactly this situation with lots of CC debt to boot. This was his attorney's advice.

[chet everett]

I have been in court rooms. Judges are not amused by "produce the note" type attempts to stall. Pretty much every law firm that works for a lender has solid record of evidence that they can and do produce to quash such silliness.

There are valid reasons that judges will issue a stay of foreclosure, "produce the note" is generally NOT one of them...

[StilltheSame]

I think it will slow down the process. Being unresponsive will till speed it up - that being said - I think you have a lot longer than 6 months before you will have to move.

[Consent Withdrawn]

Originally Posted by chattycs

I can see from responses that I wasn't real clear on what my need is. I really just want to know what to tell the lender when they call. Will the foreclosure process speed up if I tell them we definitely don't plan to make a another payment. Does it matter if I talk to them or simply disconnect the phone. We already tried Loan Modification last year when we saw the way his business was slowing down and they turned us down. That process went on for 6 months. We also had the house on the market of 1 year and no bites even close to what we owed on the house. That is why we are in the situation now. We went to an attorney and discussed our options. Presently we also have almost 80,000.00 in credit card debt which has mostly been used for medical bills (my husband had 5 surgeries in past 3 years). Attorney says we still would make too much in State of Wa. to qualify for Chapter 7 but by time January, when there is almost no work, the 6 month average of wages would qualify us. We definitely don't want to file Chapter 13 as we definitely don't want to keep this house. So, my question is, is it better to just ignore the phone calls or to tell them we are "working on things" in order to stretch this out till early spring before they "kick us out"?

Hey there Chattycs, let me begin by saying my heart goes out to you and your husband. Your story is quite unfortunate and sadly, quite common in today's economic climate. First of all realize this: You are not responsible for this. There is nothing you could have done. It is bad luck pure and simple. Now, here is my two cents worth: Since you stated that you don't care to keep the house, let them foreclose. Live there as long as you can, but when the time comes, it will be the banks problem. I'm guessing you have a place to stay when that time comes. As for the phone, go ahead and have it disconnected so you aren't hounded by these blood sucking leaches. But get a go phone so that you can keep in contact with friends and family. You'll need that moral support.
Don't file bankruptcy and don't get an attorney. Bankruptcy is expensive and if you plan to lose the house anyway, you'll gain little from bankruptcy and lose a lot. These types of attorneys are scum bags and just want to get their hands in your wallet. Besides, turning to them empowers their whole corrupt enterprise.
Now as for that credit card debt. Walk away! I have walked away from my credit card debt and you can too. Anything to bring this economic system to a collapse is a good thing. Remember, the lenders are being well taken care of by the government. They received bail out money from your tax dollars? Where was YOUR bailout? It sure sounds like you could have used it.
Most important of all, don't feel guilty. This is a business decision pure and simple. Corporations make these kind of decisions every day when they lay off thousands of workers. It's the bottom line that counts. You must look out for yourself and your husband and that is all that counts.
God bless you.

[pburgess68]

This is happening all over the country, you aren't alone. Saying nothing is not an option. Be honest with them. When you are, they are more likely to work with you. You can't expect to live for free for 6 months without paying a dime. In all honesty, this is why we are in the predicament we are in right now. While I feel horrible you are suffering thru this, there are several options...but one of them is NOT to ignore your bankers.

Who knows, maybe one of you will get an awesome job, the economy may pick back up, and you can sell the house and not be forced into something that will take you 7 years to fix!! I wish you good luck

[chet everett]

Nice ax to grind there CW. I can't wait till the debtors prisons get reinstated with winners like you to put in 'em.

[Consent Withdrawn]

Originally Posted by chet everett

Nice ax to grind there CW. I can't wait till the debtors prisons get reinstated with winners like you to put in 'em.

Chet, I suspect that you are either an attorney or in the credit industry as it sounds as if you has a stake in all this. I imagine you'll have to wait a long time for debtor's prisons to return, so don't hold your breath my friend. And if it is your sense of fairness that is being offended here, I'm sure you have lived long enough to know that there is no such thing. Is what happened to Chattycs and her husband fair? They need to be about the business of surviving and if they choose to walk away, it is no different than when a corporation chooses to close a plant and lay off their employees. It is a business decision because the corporation's number one priority is it's stockholders and profit, right? Okay, what is the difference here? Chattycs' number one priority now is survival. Have some compassion man!