I need this explained

[caldwellb02]

Okay. I need to know what the banks get out of foreclosing on a house like mine. I get it that they want to milk all the $$ out of me the can (which was why they weren't budging when I wasn't in default), but giving the following statistics, what is the benefit to them?

My scene in a nutshell:

80/20 loan
First is $265,000 ARM (got it from Long Beach Mortgage, then to WaMu, then to Deutsche, now serviced by Chase)
Second is 60,000 fixed (WaMu owns)
Home is worth $245,000 as far as I can tell right now.
No PMI

So. If they foreclosed (I hope it doesn't go this way, but let's say it does), say in 3/09:

1. they lose 6 months of my payments
2. They have foreclosure costs
3. The second is dead in the water (I think)
4. I'm in CA, a non-recourse state so they don't go after me.

Why would they not want to keep me in the house, even at a lower interest rate? What do they get here that I'm not seeing? I really am lost on this and would appreciate any and all input.

[caldwellb02]

Oh - forgot to add:

I have a stable job.
I have a predatory loan
NACA submitted a proposal that I can definitely pay.

[rachel_p]

When you figure it out, let me know!

We have no problem paying our regularly monthly payment, yet they force us NOT to pay. Who knows what they are thinking??!

[Jillian118]

Let me know tooooooo!! I am in a similar situation waiting to be denied...and no word from NACA. Terminal holding pattern

UPB = 436K
Chase BPO = 289K
Monthly payment $2924 they would not get for appx 8mo
No PMI
Foreclosure costs around 20k-50k depending on who you ask
Vacant houses in my neighborhood...

[darlyj]

I'd be willing to bet that they get some kind of tax break from the stated loss. That's about the only reasoning that my feeble mind can come up with.

[Chased around and around]

Originally Posted by darlyj

I'd be willing to bet that they get some kind of tax break from the stated loss. That's about the only reasoning that my feeble mind can come up with.

Ditto 100%, no matter what the loss they take, its all written off.

How do you expect to have your balance sheet look good to investors and bond holders with toxic debt, yup bottom line, write off.

States will not hold the banks accountable for the back taxes, HOAs what will they do sure the banks for back dues. Nope its all about corp taxes.

Now think about it for a minute, you want a loan mod, you signed on the bottom line now you can't pay. Doesn't matter to them why you can't pay, but you don't. They have no time for you to find some sucker to bid on a short sale, way too much paperwork for them, costs hourly employees for that. Loan mod, costs them way to many employee hours, phone calls, faxing, fed-x, plus they will loose money in the short run with the low interest rate on the mod at the beginning. So then they foreclose, it costs them nothing, they file the paperwork with there lawyer, he/she files with your county, send you the foreclosure letter. You are out and the house goes up for auction, house sells in days. Property sold then they write off the loss of the original loan.

And don't anyone tell for one minute that this scum Fed is not going to help all these banks out with their losses, they will be on them with our money like white on rice. Bank on it...

[caldwellb02]

Chased - Okay, is this your theory, or are you sure that it's a 100% write off? I don't mean to be judgmental - I just really want to know. Is it 100% based on remainder of mortgage, or 100% based on what the house is worth? Either way, then they get to sell the house again. Hmmm.

[darlyj]

Hey, what kind of motivation would you have if there were no consequences of losing billions of dollars? As long as the people at the top continue to suffer no consequences themselves, people like you and me don't matter to them. All they have had to do is stick their hand out and "our" government hands them billions to cover the losses, and then billions more to prop up the books. My philosophy all along has been to let one or two fail....yeah it won't be a good thing but neither will it be the end of the world. I promise that you will be absolutely stunned at how quickly the remaining institutions will be able to get their sh** together.

[darlyj]

Originally Posted by caldwellb02

Chased - Okay, is this your theory, or are you sure that it's a 100% write off? I don't mean to be judgmental - I just really want to know. Is it 100% based on remainder of mortgage, or 100% based on what the house is worth? Either way, then they get to sell the house again. Hmmm.

It is a fact that if you suffer business losses, that amount is a writeoff. I had friends growing up that owned their own business. Sorry, my previous reply was poorly worded.

[Marie T]

I am pretty sure that the HOA dues survive any kind of sale - the bank has to pay them. Mine are steep but have never been behind on HOA but Chase should definitely look at having that as part of carrying costs.