Cut to the CHASE - Jumbo & 2nd Mod

[Hodgini66]

This is a tale of greed, divorce & stupidity.

With a bit of luck and alot of fees, I'll hopefully be able to convert to a success story.

I've noticed all these threads can be exhaustive, so I'll do my best keep this short and sweet.

however, this first post IS rather lengthy because it includes alot of required info & background. More effficient to disclose than to answer dozens of questions. If I don't answer your Q, its likely because your answer is in my first post.


My hope is that this story may serve as reference & a lighthouse for how to get this done right the first time, when dealing with this behemoth (Chase). This process has proven not only frustrating but "doing it yourself" seems almost beyond sane.



History/Background:
Living in SoCal Lap of Luxury (a.k.a. vaccumm), Home of the Real Housewives of Orange County, Ladera Ranch.
Retarded Ex Wife filed for divorce in Feb 2006.


Refinanced with Chase in January 2007.
Estimated home market price @ time of refi = $1,350,000

Jumbo = $980k
2nd = $280k

Payments:
$5,100 for 1st (Interest only)
$1,800 for 2nd (P&I)


$150k of refi proceeds held by atty in trust acct, to pay mortgage, taxes & insurance.


Chasing Market Downward ("To catch a falling knife"):
Listed house for sale shortly after closing of refinance @$1,450,000.
Ex Wife (aka "Retard") insisted upon higher-than-market listing price (holding out for more), me & the house are now "hostages".
Chased market downward for ~12 months while listed on market (HER greed & stupidity).
Three offers received early on, highest offer was $1,270,000 in July 2007.
Ex wife refused or killed all other offers, actually countered HIGHER than listing price on the highest/last offer.
July 2008 - Took off market, I moved back in.
Market is now collapsed.
House now upside down ~$350k (as of June 2009)


Income & Expenses:
I gross $169,000 per year, ~$10,000 per month net (W-2 wages).
Court Ordered support = $6,000 per month (~60% of my net, due to 3 kids).
Property Taxes = $13,000 per year ($1,000 per month)

Cannot afford mortgages AND support payments at same time.

Borrowed money to try to keep current while began the process. Almost ran company in the ground, financially speaking, "borrowing from the till".



Attempted Loan Mod Process:
Started talking (ad-nauseum) with Chase back in March 2008 when Divorce Atty's trust account balance ran dry.

Discussed Short Sale.

Chase required I list the house and that I WOULD have to makeup for any short fall. WTH??? How's THAT going to happen?

Decided to gamble and hold on for dear life, borrowed $ from company to stay current, started asking about loan mods last fall (September).

Chase proved it was a gigantic "Black Hole" - Gave info over phone countless times to both departments (1st and 2nd trust deeds), lost all my info twice, faxed several more times, passed me around to several different people, played "Let's start this whole thing over again " game, etc. etc.

Sent hardship letter, tax returns, pay stubs, statements and a note from my Mother.


IMPORTANT NOTE: Trying to deal with ONE of the two departments was bad enough. Both departments proved silly, redundant, pointless, fruitless, futile, pointless, redundant, fruitless, futile, pointless, redundant, in the end.

It proved pointless necause of the numbers and the fractured way they "do business" (1st & 2nd mortgage depts. don't/can't/won't work together).


I stopped making payments in Feb 2009.




Game Over. I Call Your Bluff. Whatcha Got?:

June 11: Phone conversation with the "Foreclosure / Loss Mitigation department last week:

"I can't access all the info you sent. I see you sent all the info but THEY are in Arizona and I am in Texas. We need to start from scratch, over the telephone."

ROFL... Surprise Surprise!

"We can offer you $5,600 per month payments, principal, interest, insurance and taxes. This equates to 41% of your GROSS income including all 'permitted' expenses, including an allowance of $1,500 per month standard living expenses (due to 4 people in the house in your region)."


What about my Court-Ordered Child and/or Spousal Support?

"Sorry but No. Can't include support in the calculations.

Your sale date is set for October 3rd."


What about the second mortgage?

Can you negotiate on behalf of them as well (both mortgages are serviced and likely owned by Chase)?

"Sorry, No. Can't negotiate the second mortgage at the same time. You'll have to contact them directly.

Your sale date is set for October 3rd."

Heeeyyyy... That's Greeaaat! (sarcasm).

Thank You for playing! (sarcasm).

Pfft... Glad I waited to hire an attorney! (sarcasm).

=====================================


A New Day Dawned (on me).


Time for a NEW game with a new strategy...


June 15: Called one of those boiler room/law firms advertising on the local radio. $4,000, 50% retainer down, no guarantees, talked to a "salesman" who sold me a bill of goods I already knew about from reading these Forum threads (looking for RESPA violation-tactics).

No thanks, I'll use a real BK attorney.



June 16: Consultated with a bankruptcy attorney to "take point" on negotiating with Chase.

Debt-Foregiveness Taxataion is a substantial concern of mine. I do not qualify for Economic Stimulous Primary Residence Debt Forgiveness exlcusions due to the history of the mortgages/debts. Therefore, if I were to receive a 1099-C for $350k (debts forgiven), I would then owe the Gub-Munt well over $100k+ in taxes. I've done my research and looked at the options. INSOLVENCY filing along with my tax returns CAN excuse this tax burden without a bankruptcy BUT I need to become more educated. Filing the Form 982 (Insolvent Form) is apparently a fairly well-hidden secret.

During my initial phone consult, I made it clear i do NOT want to just file for BK, it likely wouldn't prevent Foreclosure anyway. I want to keep the house if possible (my credit is now ruined) and force Chase's two departments-divided, to negotiate in concert (they'd lose over $350,000 ANYWAY if they decide to proceed with foreclose).

Moral Conscience Footnote: I'm not asking for debt forgiveness. Nevertheless, I am now prepared with the knowledge that I won't owe taxes on it should they force a foreclosure.

I just want to reset the clock and push back when they get their rightfully-owed, investor's money. If they would prefer to LOSE their investor's money by foreclosure, then that is their perogative.

Atty sent over a 40 page New Client Induction" pdf file, requesting copies of everything under the sun. I am now scanning, copying, filling out forms and organizing like a banshee.



STRATEGY RECAP:

Hire BK atty to make a threat: "Either you two bozos/departments who refused to work together in the past START negotiating with me and my client and in good faith, or we'll spread this mess out over the next year or two in the court system."

I'll post again when I have new information/developments. Hope this helps somebody, someday.

[NohelpfromEMC]

Have you tried to get the child support reduced at all? Doesnt leave you with much to service a 1 mill+ debt.

Kids come first and I know first hand they are expensive (I also have 3) but 60% of your net seems expensive.

[Hodgini66]

Yep.

I only have 33% custodial time and also because their Mother stayed-at-home. California screws over the breadwinner-guy/gal no matter the FINANCIAL/CREDIT impact on the parties involved.

[RSMMOM]

Wait a minute ! What is the "permitted expenses" and the $1500 Standard Living Expenses in our region???? I am in RSM (outside the gates of the Housewives) Funny how Chase just modified Jeanna's (OC Housewife) pretty fast and stopped any foreclosure action! I have been trying since Nov. 08' and just received a 3 month trial payment that is still too high!

[Hodgini66]

Originally Posted by RSMMOM

Wait a minute ! What is the "permitted expenses" and the $1500 Standard Living Expenses in our region????

The "permitted expenses and the $1500 Standard Living Expenses" are one in the same. The LossMit guy ("Mr Malone" in TX) asked how many people live in the home. I stated 4, he came up with $1,500 per month. He mentioned something about "your region" which I presume meant living expenses relative to the zip code.

Originally Posted by RSMMOM

I have been trying since Nov. 08' and just received a 3 month trial payment that is still too high!

It appears we are all just a series of numbers to them: Income & Expenses.

The three month trial program seems like a joke/ploy to me. They are either interested in a resolution OR... They might just be trying to extract as much revenue from homeowners they intend to foreclose upon, three months down the road.

Think of it this way: If everyone stopped making payments, the company would go belly up in a matter of months. The government has issued (now expired) directives about moratoriums. FDIC is on their back and their "system" is not designed or capable of handling MASS loan renegotiations. They must report to their shareholders AND to the government (TARP & TALP funds).

Fear is driving much of this current impasse, laced with inaction and forestalling the inevitable (defaults on poorly designed loans).

How do you "tease" mortgagees into continuing to make their payments? Offer a "trial" period.

How do you reduce the flood of Loan Mod applications? Require them to continue making making payments.

In my situation, I have no other choice: $7,000 mortgage and $2,500 available funds each month. The number they shot back at me was what their "system" calculated and like your case, still way too high and at the same time, disregarded the second mortgage THEY service and likely own. This is exactly why I gave up trying to "negotiate" with phone agents plugged into a "system" that's beyond their control. I find it sad that they would force foreclosure when the comps in my area support the premise/claim that they will lose at LEAST $300k upon foreclosure while at the same time, they can't get Frick to summon Frack into the conversation for an expedited solution.


Stay tuned to find out how much more flexible their foreclosure atty's are, compared to their phone boiler-room "LossMit"/Collection agent counterparts.

Originally Posted by RSMMOM

...Chase just modified Jeanna's (OC Housewife) pretty fast and stopped any foreclosure action!

Do you mean the TV show is STILL being filmed here? I watched a couple episodes years ago to see how they portrayed my area. I wasn't impressed with Hollywood's take.

[RSMMOM]

I think you are probably right as far as trying to get money comming in and slow down the actual mod part! There is a 90 day moratorium on foreclosures in CA. that Arnold enacted. The lenders have to show they tried to modify the loan before they can use the courts to foreclose on the property. I quess at this point we should just pay the 3mo. trial (starts July 1) and then try to renegotiate. We have a first and second both owned by Chase and they did do both loans on this 3 mo. trial.

[Hodgini66]

NewsFlash: Chase's pre-foreclosure department called today, they are NOW supposedly willing/able to negotiate on behalf of their own 2nd mortgage department.

Supposedly, they're so-called "Business As Usual" program allows them to accept 75% of the ordinary 2nd mortgage payment, if you are participating in the 1st mortgage payment offer/program (3 month trial modification?).

This doesn't help me because I can't even afford their offer on the 1st mortgage.

Just an FYI, hoe this helps!

[3kidlets]

Hello Hodgi

Your dry wit is a fine counterpoint to these troubled times . . .

[snapple candy]

Hodgin,
I didnt go thru your whole story yet but I will. I have 2 thoughts. One your first mistake was putting money in a trust for an attorney. They are slimeballs and I just got financially ruined by them and corrupt judges after 10 years litigation....we'll have to share horror stories. My divorce was in S. Cal. Well, I think you need to get your child support modified. You are getting screwed. DId you agree to this, or did a judge order this?
There is such a thing as state-guideline support (its the law). Go to CA Department of Child Support Services web site and look for child support calculator. Its can be a bit complicated but poke around with it. My ex makes 150K, lied about his wages and I get 3100 for approx 130K income (for 3). I am modifying right now based on the 150K and it figures about 2950 for two. I probably should have been getting about 3600K. You are paying more than double than that. Something is amiss. I'll say more...later. Got homework to do. Hang in there.

[snapple candy]

Hodgini,
I have 100% custody so based on your 33% your support is way too high unless their are some hardships,etc. Are paying alimony? There is a guy down there in your neck of the woods who is a "Child custody coach" and his name is stephen. Look for his web site. He should be able to help you.
Yes, stretch it out in BK court as long as you can. They dont care if it goes into forclosure, they have mortgage insurance and will recover it. Get as many months of free rent as you can.They dont operate in good faith and yes they dont care. Reminds me of a few attorneys and judges I know.
Chase offered me 50% lowered payments on my 2nd (they have the first) and will mimic the 1st loan mod. I just got the MHA trial program. You are right, it is a teaser. I am not expecting much in 3 mths. I have a real estate attorney I am working with. He will be my last shot before I walk away.

[Hodgini66]

Thanks Snapple & 3 Kidlets,

Yes, I do pay spousal support (aka "alimony") of $2,000, as she was the stay @ home Mom and received 65% custodial time. Sadly, her choice to divorce. Said something like "I DESERVE to be happy!".

As for child support, the "guidance" support calculator came in around the same figure of what I finally agreed to in the court house hallway, of $4,000.

The reason for this goes beyond calculating based solely upon simple income. MOST substantial tax deductions INCREASE the net child support. See the "Monthly Deduction Information" on the Cal's website: https://www.cse.ca.gov/ChildSupport/...lineCalculator

Firstly, spousal suport is tax deductible so it INCREASES the child support figure.

Secondly, I was to exclusively pay for and reap the "rewards" (WHAT REWARDS??? PFFT!) from exclusively occupying the house while paying the property taxes and mortgage interest (out of the trust acct while it sold). But, since my ex "held out for beyond market prices while listed, it never sold. Nevertheles, because these are tax deductible, they are taken into account by the support calculator, which increases the net money I pay for child support. The house is in a Mello Roose district so higher property taxes ($13k/yr) and the 1st and second interest payments WERE ~$6,500 per month.

Sadly, if I lose the house and become a renter... I also lose these valuable tax deductions, meaning I pay more in personal income taxes. I would lose a ~$20k per year tax refund (State & Fed combined). Worse yet, it makes very little difference to the support calculations, reducing the current calculated net child support figure from $3,600 down to $3,000.

RECAP: I lose the house = I lose $20k cash per year (refunds) and child support is reduced by (only) $7,200 per year. Net result: My credit is ruined, I lose $12,800 per year net spendable cash and I get to squeeze into a tiny apartment with crack dealers. Heeey... THAT's GReeeeeaaat!

As for the trust account: It was depleted by paying the mortgage, prop taxes and insurance out of it, on top of $20k in atty's fees (both sides).

Yes, the divorce atty's screwed us over, still not finished screwing us over.

Ain't life a beach!?!

Thanks for listening (reading), I'll keep you posted!

[snapple candy]

Hodgini,
I understand your plight, tax implications, and tweaking of dissomaster calculations. Honestly I have heard some of the same complaints from my ex. I chose to file myself, but only because of some pretty bad behavior on his part that he was unwilling to seek professional help for. I can admit I may have done something similiar in overestimating our house value, and had I not been so stubborn about the listing price, things may have turned out different. It is something I do regret because the circumstances that followed and that played out in the courts were pretty horrific and costs me over 200k, the depletion of my 401K, and severe trauma to me and my children at the hands of the courts and corrupt attorneys. The family law system is pretty broken and I can only see the system full of predators taking advantage of people in weak emotional positions and preying upon them. My ex is not a saint and surely made some decisions that have cost us both financial ruin. The family law system does not act in the best interest of children nor the family.
As much as I know you must resent the hell out of your ex, coming from the dark side myself (hehe) is to try to keep in perspective what is best for your children. I know that you are in the middle of losing everything and given very little to live on. This is very hard to accept. I tried to get my ex to move to a place where cost of living lower and where we both could not be so financially stretched and have a better quality of life. To try to work in a cooperative manner. Well, he didnt know the meaning of cooperative effort because he was so stuck in his anger and vindictivness, as wll as his addictions. He took us all down in the process.
I heard some divorced fathers talking on a talk show and one made a comment I will never forget. He said it comes down to loving your children more than you hate your ex-wife. I know these attorneys dont have our childrens best interest at heart..only their pocket book. I have been in litigation now for almost 10 years and going back in a few weeks. I wish it wasnt this way. I would prefer to move past this and move on with my life. My ex just wont let go and wants to stay engaged in these battles.

All I can suggest is to start looking for a decent place to live at low $$$ now...yeah like you have time. It is hard to keep 2 households going like this. I hope you can find a place you can call home that you can live with and this is not next to crack dealers. Maybe finding another single parent dad to share a place with? Good luck.

[AACPA]

He said it comes down to loving your children more than you hate your ex-wife

Or you could do what my ex-husband did to me. Walk away from everything , move out of state leaving your ex-wife to deal with the debt collectors because they can't find you and don't forget to stop using your social security number so your wife can't collect any child support from you. Oh, yes, there are "penalties" against deadbeat parents who do this but its been my experiance they are not enforced very effectively. That said, my ex owes me close to $200,000 in child support. If I could get my hands on that money I could pay off the mortgage on my house and wouldn't need a loan mod in the first place.

[snapple candy]

Yeah, then there are those whom move to other states to where laws are more lax and/or they can work under the table. Sounds like Hodgini's wife is sitting pretty good with 6K a month in child support....his children and ex can live a good quality of life.

My child support is court enforced (CA Child support services gets you the minimum-state guideline) and by wage assignment because my ex places no value on what a mother's care of his children are worth. If he had it his way, I would get nothing. I have a very ill daughter that needs to go to the east coast and I have already incurred 100% expenses to drive her to another state to see specialists. I am drowning in medical costs. I have asked my ex to give me airline points to fly her back east while I probably have to stay in a hostel to take her for medical care as well as all other costs. He wont contribute for my ticket and knows I have no funds to purchase a ticket to match hers. My daughter so ill she cannot attend school. His resentment so much, he cannot see how his actions harm his daughter. I myself, even with child support am hanging on by a thread and will most likely lose my house. Oh, I forgot to mention he is 54 and has a live-in girlfriend age 31 who makes 6K a month....oh and his paperwork to the court says she doesnt contribute to any expenses...Yeah right. No matter what side you are on, the outcomes of divorce sucks! I am in financial ruin because of it. AACPA, sorry you got to do it all alone with no support.

[Hodgini66]

Ha! "...his children and ex can live a good quality of life." The fundamental flaw of CS laws is there is no accountability or oversight on HOW the money is spent.

While my ex buys new drapes, paint and baubles for her new rental home, all three of my kids got sent to school last Spring without lunch or lunch money while @ her house, about 25% of the time. I'm NOT exaggerating. My 13 year old sends me text messages from school stating he has no lunch or money, didn't eat breakfast and the younger ones independently echo the same exact info when they come over on my once-a-weekday or every-other-weekend visitation. Ah the joys of watching your kids get the shaft like I did. They're ALL starting to get the big picture. Pretty soon they're going to write her off and the courts will swing the pendulum the other direction. I'm filing papers next month to request a 730 custody evaluation update, takes 6 months to go through but this time, her stupidity, greed and selfishness WILL catch up to her.

BTW, the $6k was COMBINED Spousal & Child support. $4k for child, $2k for spousal.

On a good note, Chase called Friday and said "Let's make a deal!". They are NOW supposedly going to take the combined spousal and child support court ordered amounts and reduce my gross wages to real-world net-spendable numbers, fr calculating the payments on the first.

They are reportedly able to take the interest rate down to as low as 2% (driven by what you CAN afford to pay), but get this!!!!!:

They supposedly take the CURRENT MARKET VALUE of the home using a BPO (Broker Price Opinion) and spread the P&I over 40 years????

Doesn't exactly add up because this house is upside down by $300k+!!

Is the remainder ($150k) going to be a balloon @ end of 40 years? Am I going to get a principal reduction and send me a 1099??? What are they talking about??? LOL

Also, because the second IS owned by Chase, they are now reportadly able to accept 50% of the normal payments, instead of 75% of non-chase owned paper.

The short of it is, I MIGHT have something to chew on that I can actually swallow.

We'll see.

[AACPA]

Is the remainder ($150k) going to be a balloon @ end of 40 years? Am I going to get a principal reduction and send me a 1099??? What are they talking about??? LOL

Yes, the $150K will probably wind up as a balloon payment at the end of 40 yrs. From what I've read on these forums Chase does not do principle reductions. I'm also looking at a ballon payment at the end of my loan (assuming they approve me for a loan mod which under the MHAP will force them to extend my loan to 40yrs and reduce my interest to 2% to bring my PIT down to 31%) BUT 40 yrs is a long way off..........