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Originally Posted by sadandconfused  I refinanced once to get a better rate, but did not take any money out. I have about 20k in my 401k and took out a 401k loans of 20k, so I can't take anymore out except for hardship withdrawal and that has its restrictions one being it must be foreclosure, but I don't want to take that out, I'd rather let them foreclosed. I have two credit cards in collections so and have no money in my savings, so If they don't approve me for the short sale I will just walk away. I will have my house listed within the month and starting this month I will not make another payment even though I was making payments on a reduced payment plan. Personally I don't think Obama's plan will help that many people like he thinks because the banks are not cooperating. My credit score is down in the 500's because I was late on the payments previously and the credit cards. My main concern is the deficiency judgements and I don't want them to do a wage garnishment. |
Hello good morning,
Please don't take out your 401k if you're under 59 1/2 you will pay IRS 10% penalty and the state 3% when you file your income tax next year. For your information your 401k, retirements and pensions are safe from being garnished. As far as deficiency judgments there is a lot of topic about it and the most accurate information was done by Professor Shays, it's called CA Section 580b.
If your property is in California and your loan is a purchase money mortgage and never refinance your loan you are covered by this section. Check Professor Shays posts and thread about deficiency judgments it will help you a lot.
As far as garnishing your wages I don't think the Lender will do it especially if you are insolvent like us. If it's
CW and it's a Short Sale and they approved it, make sure you get a letter stating they will not pursue a deficiency judgment against you. I have that letter but it still did not stop
CW for damaging my credit by putting in my credit report that I still owe them the 2nd mortgage when my house was sold via Short Sale and they gave me a letter showing they will not pursue a deficiency judgment against us and the Negotiator sent me an email saying how much balance was cancelled. We're not going to buy a house anyway, I will be collecting Social Security in 1.5 yrs and my husband will collect his next year. Then we will leave CA and go to Canada or other foreign countries away from CA.
You're right President Obama can not help all of us, but one person at a time is better than nothing, I wish it's you they will be helping next time.
Wish you success in all your endeavor, don't worry, there's always a time for everything