Need Advice...Michigan BOA/FHA - Need to Walk Away

[Reenthequeen]

In 2003, my brother (now 42) purchased a home, in Redford, with my father (now 81) co-signing. I was going thru a bad divorce and had zero credit. My brother & I moved in together, splitting the mortgage payments. Five years ago, I moved in with my fiance, still paying 1/2 the mortgage payments, each month. I suggested to my father, at that time, selling the house...but he didn't want to, as we wouldn't have made any profit on it. Nice thinking...we all wish we could go back in time on that one!

So, the house is underwater, like so many in the area...the outstanding mortgage is about $95K and comps in the area are selling for approx. 40K. There was an attempted midnight break-in, this year, when my brother was in the home. He has some learning disabilities and doesn't use common sense when responding to emergencies; so our family all agrees that we need to get him out of the house and the neighborhood.

My brother works 2 jobs and has some small investments (IRA's, etc.) and a 401K thru his employer. My dad, who co-signed, is retired and owns their home out-right. He and my mother have some stocks, a minimal retirement package, along with Social Security.

My father is very much of the generation that you take out a mortgage and you honor that committment...an ideal I share. With that said, though, my brother is in danger in the home and it makes no sense to pay a full $115K mortgage for a home that will never regain the value it once had.

We have our payments on an automatic withdrawl, weekly, so we're paying 13 monthly payments per year. We want to revert back to making monthly payments, via check, so that we can close the bank account and default on the loan. (We don't even know who to contact to make this change...any suggestions?) We are, obviously, very concerned about BOA coming after my parent's investments and/or home, along with my brother's savings, although they are not significant.

Looking for advice and, if any one has it, personal experience in a similar situation. I've been paying half of the mortgage, for a home I haven't lived in for 5 years, to try and support my parents and brother, but knowing that that money will never be recouped is causing much tension and a large divide in my family.

Thank you for any assistance...I can't tell you how much I appreciate it! GREAT forum!

[Cat Damiano]

Hi Reenthequeen,


Welcome to the forum and thank you for joining..............


With an FHA loan, there are options in lieu of having to walk away, there is the FHA Pre Foreclosure Sale in which case the loan would need to be in default by at least 31 days. If it doesn't sell through the required timeframe then a Deed in Lieu of foreclosure can be looked at as an option at that time.

Here is the information for you on these programs;

FHA Loss Mitigation Disposition Programs and Policies

	Preforeclosure Sale Fact Sheet
	Deed In Lieu Fact Sheet

A deficiency judgment may be obtained when a property in foreclosure is sold at a public sale for less than the loan amount which the underlying mortgage secures. The borrower can claim that the foreclosure sale was not for fair market value of the property as a defense.

Michigan Foreclosure Laws - Foreclosure.com


For the ACH payments through the checking account, you may want to close that account and open up a new one elsewhere and alert BofA to the fact that the account is now closed and that you would need to send payments. If it were me, for now I would probably state that I was going to use Western Union and do not have an account, so that they don't try to ask for the new account number.

[Reenthequeen]

Thank you, so much, Cat...for your advice and the links! Going to check them out and share this forum and the links with my parents. Thank you, again!

[SarahandDQ]

Hi Cat,
My apologies for tagging along on another conversation, but I've just joined and can't (for the life of me) figure out how to post my own message to ask for advice. I've searched everywhere, and can't seem to figure it out. Can you help me?
Good luck with your situation, Reenthequeen!

[Cat Damiano]

Thank you, so much, Cat...for your advice and the links! Going to check them out and share this forum and the links with my parents. Thank you, again!

No problem, we are happy to help. Please keep us posted on what you decide and also if you have any additional questions about the process we can try to answer.

[Cat Damiano]

Hi Cat,
My apologies for tagging along on another conversation, but I've just joined and can't (for the life of me) figure out how to post my own message to ask for advice. I've searched everywhere, and can't seem to figure it out. Can you help me?
Good luck with your situation, Reenthequeen!

Hi SarahandDQ,


Welcome to the forum and thank you for joining.........

In order to start your own thread and tell us your story you would need to click on "forum" at the top of the page, that will bring you to the home page of the forum where you can scroll down and pick the category to post in such as "Bank of America", "Tell Us Your Story", "Loan Modification" and so forth. Once you choose the sub forum area, click on it and on the top left side there is a tab that says "New Thread" that is what you would click on to begin your new thread and give it a title.

Hope that helps and I will look for your thread.