My Story - Chase Mortgage is so Underwater I May Need Scuba Gear

[dannwa]

I have been in my home for over 7 years and never had so much as a 30 day on my mortgage. Property values in my area have been slipping but I really had no idea how much, until I had an independent appraisal performed in April 2009. I have come to find that the LTV on my home is around 150% and though I am considered prime credit I am paying 7.5% fixed on my mortgage (the going “A” rate in 2001). With no hope of refinance I consulted a trusted attorney who has been assisting me on real estate matters for 10+ years to map out strategies and options.
I began contacting Chase regarding a modification in July but got nothing but a run around that always ended up with the Obama Modification Plan. My attorney has reviewed the package from Chase and advised me against signing a hardship affidavit. I am self-employed and my Debt to Income ratio is less than 15%. However, I can not justify paying an interest rate that is 50% above the market rate on a principal balance that is about 1/3 air. Over the next 22years I would end up wasting $100’s of thousands of dollars. In addition I could rent a larger home for much less than my mortgage payment. I stopped making payments to Chase in July and also sent them a forbearance request, a Cease & Desist order and an authorization letter that my attorney is now handling all matters relating to the account.
My goal is to stay in the home with a principal balance reduction and interest rate cut on the mortgage to align the financing with current market realities. I would be open to the bank shortening the term of the mortgage as I don’t care so much about the payment. I am willing to walk away and will never make another payment to Chase under the current loan terms. So far nothing. The account is still in collections and they have yet to contact my attorney though the loan now lists his name as primary contact.
The home is in Michigan which guarantees me a F2F meeting with Chase. I know each situation is different but has anyone had any success in a similar situation? Would anyone care to share their story or give advice based on experience?

[jakelabry]

Originally Posted by dannwa

I have been in my home for over 7 years and never had so much as a 30 day on my mortgage. Property values in my area have been slipping but I really had no idea how much, until I had an independent appraisal performed in April 2009. I have come to find that the LTV on my home is around 150% and though I am considered prime credit I am paying 7.5% fixed on my mortgage (the going “A” rate in 2001). With no hope of refinance I consulted a trusted attorney who has been assisting me on real estate matters for 10+ years to map out strategies and options.
I began contacting Chase regarding a modification in July but got nothing but a run around that always ended up with the Obama Modification Plan. My attorney has reviewed the package from Chase and advised me against signing a hardship affidavit. I am self-employed and my Debt to Income ratio is less than 15%. However, I can not justify paying an interest rate that is 50% above the market rate on a principal balance that is about 1/3 air. Over the next 22years I would end up wasting $100’s of thousands of dollars. In addition I could rent a larger home for much less than my mortgage payment. I stopped making payments to Chase in July and also sent them a forbearance request, a Cease & Desist order and an authorization letter that my attorney is now handling all matters relating to the account.
My goal is to stay in the home with a principal balance reduction and interest rate cut on the mortgage to align the financing with current market realities. I would be open to the bank shortening the term of the mortgage as I don’t care so much about the payment. I am willing to walk away and will never make another payment to Chase under the current loan terms. So far nothing. The account is still in collections and they have yet to contact my attorney though the loan now lists his name as primary contact.
The home is in Michigan which guarantees me a F2F meeting with Chase. I know each situation is different but has anyone had any success in a similar situation? Would anyone care to share their story or give advice based on experience?

I suspect you will not hear from them until they take the house. Banks do not consider loss in value and being underwater a hardship especially since you can so clearly afford the house/mortgage. They aren't going to modify, allow short sale or DIL without a hardship so I would think you are SOL. They aren't going to reduce your principle to make up the loss you incurred in the real estate gamble. They will take their loss and the house but they won't take a loss just to turn around and give you a house at a lower rate and principle - YOU HAVE NO HARDSHIP! If you want to do a strategic walk-away, go for it. It may even make good business sense in the long term but don't ask for the cake and the right to eat it.

[dannwa]

I agree about the hardship and have told Chase that the reason I will not sign a hardship affidavit is that I dont have one but I don't understand the part about having my cake and eating it too.

If Chase could realize $XXX,XXX by selling the property into a beaten down forclosure market but I agree to a modification that would net $xxx,xxx + $xx,xxx isnt the investor better off by five figures? Isn't the community & society better off by avoiding another foreclosure? The way I see it, Im doing something that not only makes business sense for me but for the investor as well. My hope is that when we get our meeting with Chase they will see a compelling business case.

My strategy is to make it as expensive as possible for Chase to foreclose and evict me. I will not move out until the Sheriff comes knocking but I will leave willingly and peacefully. My attorney will be in court with Chase's counsel making sure every last right I have is asserted and every claim made by Chase is countered.

[SwillerAlesbane]

Yea, don't expect your cake (a loan that is $100,000+ underwater) and don't expect to eat it too (mortgage terms WAY higher than those around you).

WTF!?!?!?! Now we get to chew on each others asses? Are we back to the "You signed the contract, you should pay you deadbeat son of a b!tch")?

Yup, we signed the contracts.....yup, there was MASSIVE FRAUD from the top down...yet the big corporations can SCREW US and break the law but....hey buddy....YOU signed the contract!!!

I have had so much of that attitude it makes me want to vomit....right onto the person saying it. It's no wonder this country is going to hell in a hand basket.

To the original poster.....I would DEFAULT, and try and work a deal. DEFAULTING is not a sin, but in todays market, it's a tool for leverage, because they bloody pricks at these corporations won't listen to anything else. And if you think your elected officials will do anything, you better check and see who is getting these losers elected in the first place.

After the default I would try and work a loan modification, if they don't want to modify....you can live there as long as you want for free!! MAKE THEM come take the keys...it will take a minimum of 6 months in California, and judging by all the houses I see around here, it will take them much longer. If they still won't play ball, declare a bankruptcy...even a Chapter 13 will put a wrench into the process.

You see, I've had it with these scum, these sub-humans who own and control these companies. You can TRY and use ethics and morals and anything else to manipulate me into supporting the corrupt crony system, but it's not going to work.

I've already been sodomized by the system, and I'm not a prison b!tch thank you very much. The next time you attempt to rape me, be prepared for a nice long legal fight.

Oh and one final thing, if they foreclose, have the best garage sale in the history of the neighborhood!!!!

[chasepmt2hot-firefighter]

love it... love it... love it... Deep down this is exactly how we all feel.

[darlyj]

Swiller, you ROCK! That was by far the most accurate and funniest rant I've heard for a looooong time. How is the average citizen supposed to recognize fraud in a legal document that is the size of an Ayn Rand novel?

Dannwa, I agree....make it as long, painful and expensive as you possibly can. I seriously doubt that they give a crap about the business loss...why should they? It seems that these days bad business practices by large financial institutions are actually rewarded by billions in tax dollars instead of being penalized in any way. They will not work with those of us who cannot afford our payments, so it would seem that they would have even less incentive to work with someone who can (no judgementalism or hostility towards you). Although as ass-backwards as the system is, you might actually have a better shot. I hope that you keep us posted as it will be interesting to see what happens with someone on the other end of the spectrum. BTW, too bad you're all the way in Michigan.....I'd come to your yard sale!!!

[vavivo]

dannwa, why didn't you try refinancing during the housing boom(2004, 2005)? Alot of people who were a 7.5 or more during that time were able to refinance because housing prices were skyrocketing.

[wild-goose chase]

Swiller, that was great! I am so sick of hearing the "you signed the contract" morality lecture!

Had Chase told me at escrow that they and the other mobster-banksters were perpetrating the biggest mortgage fraud in American history, far outdoing their counterparts of the Great Depression era; that Wall Street was one great, big Ponzi scheme with its mortgage-backed securities and credit-default swaps and other detritus; that Chase et al. were blowing up one of the biggest real-estate bubbles known to humanity and that it was set to burst in my face, perhaps I would have rethought the biggest financial decision of my life and passed on this toxic mortgage and my six-leagues-under-the-sea house. Why is it immoral to demand justice when you've been defrauded and to want to walk away from what amounts to a crime scene in your living room? Those who can afford to keep paying on their underwater houses are essentially no different than those who can't. We're all crime victims. Rant over!

[dannwa]

While the circumstances of each person in the forum differ somewhat we do share a common enemy. I do appreciate everyone’s input. Im not looking for any sympathy but rather to learn as much as I can from all of you and help where I can be useful. In the end I do know that if the bank wants my house they will in all likelihood succeed in getting it back. Though I don’t like this, I do accept it. I believe in my attorney and feel our strategy of using the leverage we have to get the bank to consider a principal balance and interest rate modification is sound and puts me in the best position to succeed.
A new Michigan law that took effect in June requires that homeowners get a face to face meeting with a bank representative who has the authority to make modification decisions prior to foreclosure. Michigan courts particularly in Wayne County where the home is located are more receptive than ever to the plight of homeowners. Finally I do believe that in my case staying away from the Obama Modification Plan is the right thing to do however it is clear that the Chase Modification and Collection Trolls don’t quite know what to do with me. I will keep everyone posted. The next milestone as I understand is in two weeks when my case gets reviewed for foreclosure.
To Vavio’s question regarding refinancing in 2004/2005. I closed on my house (new construction) with 20% down in December 2001 and was upside down from day 1. I listed the house for sale on four occasions between 2002 and 2005 lowering the price eventually to what I owed but there were no takers and hardly any showings. The work of the bank’s captive appraisal department back in 2001 will certainly come under scrutiny as this case unfolds. I suspect I was underwater from day 1 and that the SE Michigan market peaked prior to 2004 - 2005.

[Chased around and around]

dan, Bottom line is don't pay and they will eventually work with you. How
they will work with you is a different story. Nothing wrong with living rent free for a year. Its good when you have someone in your corner you trust who has no attachment to your property, and they are working for money,
and that makes a difference in some cases.

Each case is a case by case basis. I am 219K underwater and have not seen one single principle reduction. I have been reading about mods for over 2 years and dealing with my mod since Feb '09.

You must show some kind of hardship to help out your case, short term will only lead to a short term promise from chase long term will get you a better interest rate.

Be prepared to hear lie after lie from chase and all the losers that work there. Their right hand has no idea what their left hand is doing. I trust chase about as much as our lying government.

Good luck...

[dannwa]

Chased Round and Around - Have you made a formal request for forebearance or a principal reduction?

[deepunderwater]

Hi Scuba,

Good for you. Keep us posted. One question: how far has your credit rating dropped? Does anyone know if defaults and/or foreclosures disappear from the credit rating after 5 to 7 years?

We are in a somewhat similar situation in CA in that we are down about $200K but not qualifying for hardship. We have 2 mortgages and the second is with Chase. They would get nothing if we foreclosed. Both loans start floating interest rates beginning April 2010, so we will end up paying more and more on the interest only loans when inflation kicks in, probably until they become unaffordable. No one will refinance us because there is no equity. So yes we made a mistake in the bubble. A terrible mistake. Does that mean that we need to pay the penalty for the rest of our lives? When the banks get away with taking more and more tax money and no responsibility? Well, the rant above says it all, and way better than I can say it. If having our cake and eating it too means having enough money to retire on some day so we don't end up on the street and perhaps even some sort of college savings for our son, then yes, I would like to eat my single piece of the good old american cake. Do we all not deserve that because we bought in to a giant scam? While the scammers walk away? It doesn't seem right to me.

[dannwa]

Deepunderwater,

Thank you for the support, kind words and encouragement. Of course any time a person doesent pay their bills the credit rating/FICO score takes a hit. I ask rhetorically, how much is good credit really worth? In my case if I were to continue making payments over the next 22 years I would end up paying hundreds of thousands of dollars too much based on an inflated interest rate and negative equity.

Also I am no credit underwriting expert but im not sure exactly how much a ding on one’s credit really impacts someone. My girlfriend foreclosed with Countrywide in Feb 09 due to a divorce but leased a brand new 2009 Mercedes C Class 7 months later. The only issue was she had to come up with $1,800.00 down instead of sign and drive.

In my case besides my mortgage I only have two credit cards – an AMEX and a Visa, no car loans or anything else. Im paying both of those credit cards each month and will continue to do so. Once the mortgage matter is finally settled for better or worse I will continue paying my credit card obligations and over time Im sure I will have opportunities to rebuild my credit rating. Im 40 years old and I don’t expect that the damage to my credit will last a lifetime. The way I see it I can recover from a foreclosure but I don’t believe I can recover from paying six figures in excess principal and interest over the next 22 years.

[SwillerAlesbane]

Very nicely put Dannwa.

I decided to stop paying my mortgage when I took a long hard look at where my money was going, and what that money was doing for me.

I currently pay $2500 a month for a 2 bedroom condo. Both 1st and 2nd are interest only, which means, I'll NEVER own my house. I'm basically renting, with the possible chance that my home value will go back to where it WAS.

How long will that take? I'm not sure, but in the meantime I don't have enough money to actually ENJOY life because I'm too burdened paying the casino Wall St. system that is being bailed out. The decision was EASY for me. I TRIED to do the right thing and work with the lender when my credit rating was around 800...they didn't listen or care. So guess what..... now I don't care.

I will do what it takes to plan and provide for my wife and children. When these corporations bleed you dry, and then you still get tossed out of your home, remember all the things you read here.

America has so many problems and it's because special interests (read big corporate money) buy our elected officials...or even worse, finance our elected officials to get IN office. They pass laws to protect and serve those special interests, and the taxpayer gets screwed.

This site gives some very important information in regards to the central banking system.

Second Declaration of Independence You can click on "THE BOOK" link at the top, it has a pdf version of every chapter....excellent reading.

Whenever you are looking for the source, follow the money.

[dannwa]

SwillerAlesbane,

I suspect you aren't alone in your decision to essentially restructure your life and living situation in a way that makes sense. Not only do I understand your logic but I feel time will show that you have done the right thing. Are you dealing with Chase? If so, did you formally request a modificaton?

Dannwa

[SwillerAlesbane]

Oh yea, you can right click on my name and see all my posts. I have my own post I started back a few months ago. I've been lurking on the site for far longer than that though, and reading here really helped me clarify my positions.

The system is corrupt.....period. I try very hard to not let that influence me into becoming ONE of them, and I won't, but I will stand my ground on how I was manipulated into "the bubble".

For all those pissed at people walking away....why aren't you up in arms with all the boomers who walked with hundreds of thousands of dollars?!?!?!

It goes both ways. How about we STOP pointing the finger at each other, and then point the fingers where they belong to be pointed....Wall St., The Federal Reserve, and our elected officials in government.

Wake up America...before it's too late.

[KFish]

Thanks Dannwa for sharing your story. We know someone in a similar situation and he didnt get any sympathy from the banks, or anyone else for that matter. My heart goes out to people in worse situations, but it doesnt mean people like you should take it in the shorts during these times!

Keep us posted....

[snapple candy]

Go swiller!!!!!
Dannwa,
I have heard of several investors achieving principal reductions but you have to have those saavy at achieving it in your court. One being a good attorney. I think your on the right track. Good luck and keep us informed. If I only had some money, Id be hiring myself a gunner too.

[dannwa]

Snapple Candy - I will keep everyone posted in this thread thank you for the encouragement. There is a who bunch of nothing going on right now.

My advice to anyone working with their bank on a modificiation would be to consult an attorney even if it is simply to review mod agreements or discussing trial modification. My attorney is not cheap but a 30 minute conversation with him regarding the chase trial mod trick is much less expensive than sending in $1000.00/mo for four months only to be denied a perm mod.

I dont have specifics but there are low cost and pro bono options available through legal aid offices or perhaps there is a family member or friend who practices law. Many attorneys will review docs and give advice on a fixed fee basis as well. Remember that a mortgage is a legal contract and the bank has its own law firm.

[BadBobMo]

Chased Round and Around - Have you made a formal request for forebearance or a principal reduction?

Look brothers/sisters everyone has to start asking for write downs or they will make all of us lifetime renters and we will end-up taking any bone they through our way! Look they troll here on this site and see that we are willing and waiting for that Fed-Package so we can rent our homes back from then. They have made the call along with the Gov./Tax money to stay the course of using (standard procedures) by foreclosures in-lue of write downs for anyone of us. They got real-real greedy period buying up all of the interest only notes, if they had to now stand on there own they would all be gone by now. They need more people walking if there is no shared fairness period, how many notes do you own w/interest only payments?
Yes don't be dumb downed my anyone or the media!

[dannwa]

BadBobMo,

Well said, my friend, well said.

[snapple candy]

BigBadMo,

You raise a real good point and I agree with you. The lenders are taking advantage of people whom are desperate to hold on to their houses and trolling this site, they can see into the minds and emotions of many and act accordingly. I have mixed feelings about our posts not being more confidential in nature. I too had an interest only loan.
I have heard of some saavy that have achieved principal reductions. They know how to play the game. It takes money to hire a gun to play the game the right way. Not many of us have it. I have eeked out a few hundred for a consult with one but havent found one yet with the cahoonas to take it to the next level. The bottom line is that it would take a minimum $2500-$4500 to get the ball rolling with a good attorney advocate. I simply just dont have it. The sad reality is that you get all the justice you want in relationship to how much you can buy for yourself.

Many of those losing their home are not saavy and try to hang on to their home for all the wrong reasons. The "dream" isnt real. Or its not there anymore like it used to be.
I personally am struggling with the practical side and what to do and the emotions of whether to walk away from my house. Its a choice we all have to make.

[BadBobMo]

Cahoonas

1st you need to do what will put you and your's in a safe position for now! If you are way under water like most make sure you at least ask for fairness! Things are changing all the time just stay awake! You can always give back there unfair deal when it hurts them more than you "Right"
If they don't get up and running sonon on the 2MP program not much will matter.
3 month=3 mil closed on
2 mil closed on in 1 year stop the world!
It's all greed!

[dannwa]

I have an update for everyone. Attorneys representing Chase taped a notice of default to my front door sometime late last week. My condo is scheduled for sale on the courhouse steps on December 2, 2009. I was traveling on business so I did not discover the notice until late sunday night. My lawyer has been notified. We will respond.