What are we facing? Foreclosure on Oct. 6

[cleach]

ike lots of you, we tried SEVERAL times for a modification with WF, did everything we were told to do, called & called - and still got the notice of foreclosure with the copy of the ad placed in the paper, date of the courthouse auction, etc.

We are not able to pay for this house any longer, so it is going to foreclose.

This is an FHA loan, so what we're trying to find out is: what happens next? FHA is supposed to pay WF, right, if the house isn't sold.

Are we facing a lawsuit/deficiency judgment here? We've also been told that we may be issued a 1099 - but the only information we've been given is on loans that ARE NOT backed by FHA.

Please help if you know anything about how this happens with FHA backed loans.

ETA: We are in GA, I'm assuming that makes a difference since some states are non-recourse & others aren't.

Please help if you know anything about ANY PART of this.

• this is an FHA backed loan
• we have PMI insurance
• we DO NOT have a 2nd mortgage
• we also own a 2nd home, which we will be moving into when this foreclosure is done on October 6 (and is the reason we're in this mess to begin with!)

Our questions/concerns:

• what is the likelihood we will get a deficiency judgment? From everything I've read, it's not very likely - but NONE of that info cites anything @ FHA loans
• also, if we have PMI, the lender will file a claim with them - right? - and then IF there is a deficiency sought it would be from the ins. co. does the same 30-day time frame apply to the ins. co?
• the only asset we have is our other home. We've been told & read that sale of your primary residence (which it will be, after the foreclosure) can't be forced to satisfy judgments.

We are desperate here to at least get a heads-up of what could be coming so we aren't blindsided.

Professor, or Moe, or Evan, or Faith (I've been reading here a long time, before I ever posted ) - can someone please help out with this?

[heidi79]

As far as I've heard, there's a good chance they won't come after you, the loan is insured by FHA. Really though in your situation you should really get a free consultation from a lawyer that specializes in real estate law.

[cleach]

Thanks, we do plan on consulting an attorney in the next week to make sure our bases are covered.

So, if it's backed by FHA - is it more likely that lender will be paid by FHA or PMI?

[heidi79]

I'm not 100% sure how all this works, not an attorney, but, the loan is insured by FHA so when you default, they file a claim against it and get paid, not sure if partially or in full. So it's FHA insured and it's got a private insurance company? hmm.

Have you totally given up on going for the modification? A lot of users on here have gotten their mods after many months and many denials.

[cleach]

Modification is no longer an option for us; we can't afford to pay for the house anymore, even if the payment were to be reduced.

Yes, it's surprising to me that this loan is insured by both the FHA and PMI. Seems like double insurance to me?