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imacamper · 02-23-2008, 07:58 PM

My wife and I resided in a California home for 18 years. We didn't like what was happening in the neighborhood so we started looking at other homes and placed our home on the market in October 2006. The appraised value at that time was $450K so we listed at $429K to sell quickly. We had only a first mortgage with Citibank. The balance was $210K

We found a home we liked, made an offer, and it was accepted in November 2006. To move the equity from our old home into the new, we took out a HELOC with JP Morgan Chase who gave us a credit line of $200K. We also dropped the asking price of our home to $399K.

To close escrow on our new home in December 2006, we drew $175K on the HELOC and borrowed $417K from another lender. We also had savings that would allow us to make all three payments through July 2007. We were confident that we could sell our old home before our savings was depleted.

But then the market fell and we were unable to sell our home for the $399K we needed to pay off the first and HELOC. We never even got an offer that was close. Thus our savings was depleted and our last payments on the old home were in July 2007.

I immediately called the lenders and informed them of our situation. I offered to work with them and asked about options. Neither would talk with us as we were not behind in payments.

Finally we listed with a Realtor who specializes in short sales in October 2007. The Realtor kept dropping the price every 2 weeks until it reached $309K. Finally we got two offers in December 2007 at $290K and they have been submitted to Chase. Citibank doesn't care as it will still get paid in full.

After lots of waiting, Chase finally agreed to accept the short sale this past week if we would pay 15% of the amount they would lose. According to their calculations, that would be about $154K of which they want us to pay about $23K. They will finance this amount over 5 years interest free which comes to $400 per month. I declined their offer and now they are threatening to come after us for the entire amount.

It is my understanding that to do so, they will either have to file for a judicial foreclosure or wait for the first to foreclose and then file for a deficiency judgement. Is this correct for the state of California?

Everything I've read suggests that judicial foreclosures are very rare in CA. And it's not like we're millionaires or anything but we do have assets since there's equity in our new home and we have 401Ks that exceed $100K. Plus because we tried to do a short sale, Chase has our pay stubs and bank statements and sees that we're continuing to save about $1900 per month in our 401Ks since we're nearing retirement.

So is Chase bluffing? Or is it likely they will wait for the first to foreclose and then try and get a judgement. What if I make the first current and thus force Chase to foreclose?

Opinions?

Cheers,

Ima

02-23-2008, 07:58 PM	#1 (permalink)
imacamper Member Join Date: Feb 2008 Posts: 12 Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0	Is JP Morgan Chase Bluffing? My wife and I resided in a California home for 18 years. We didn't like what was happening in the neighborhood so we started looking at other homes and placed our home on the market in October 2006. The appraised value at that time was $450K so we listed at $429K to sell quickly. We had only a first mortgage with Citibank. The balance was $210K We found a home we liked, made an offer, and it was accepted in November 2006. To move the equity from our old home into the new, we took out a HELOC with JP Morgan Chase who gave us a credit line of $200K. We also dropped the asking price of our home to $399K. To close escrow on our new home in December 2006, we drew $175K on the HELOC and borrowed $417K from another lender. We also had savings that would allow us to make all three payments through July 2007. We were confident that we could sell our old home before our savings was depleted. But then the market fell and we were unable to sell our home for the $399K we needed to pay off the first and HELOC. We never even got an offer that was close. Thus our savings was depleted and our last payments on the old home were in July 2007. I immediately called the lenders and informed them of our situation. I offered to work with them and asked about options. Neither would talk with us as we were not behind in payments. Finally we listed with a Realtor who specializes in short sales in October 2007. The Realtor kept dropping the price every 2 weeks until it reached $309K. Finally we got two offers in December 2007 at $290K and they have been submitted to Chase. Citibank doesn't care as it will still get paid in full. After lots of waiting, Chase finally agreed to accept the short sale this past week if we would pay 15% of the amount they would lose. According to their calculations, that would be about $154K of which they want us to pay about $23K. They will finance this amount over 5 years interest free which comes to $400 per month. I declined their offer and now they are threatening to come after us for the entire amount. It is my understanding that to do so, they will either have to file for a judicial foreclosure or wait for the first to foreclose and then file for a deficiency judgement. Is this correct for the state of California? Everything I've read suggests that judicial foreclosures are very rare in CA. And it's not like we're millionaires or anything but we do have assets since there's equity in our new home and we have 401Ks that exceed $100K. Plus because we tried to do a short sale, Chase has our pay stubs and bank statements and sees that we're continuing to save about $1900 per month in our 401Ks since we're nearing retirement. So is Chase bluffing? Or is it likely they will wait for the first to foreclose and then try and get a judgement. What if I make the first current and thus force Chase to foreclose? Opinions? Cheers, Ima