Walking away in CA, delayed forclosure, advice needed

[pcuser123]

Hello Everyone, So this is my situation

Bought a new townhome in 2005 in Antioch Ca. I did it through a mortgage broker and the loan was through a company called Land Home Financial. The price was 450 k, i put 10 percent down and took a 80 percent first loan and 10 percent second loan (I have been paying principle and interest). The pice has dropped to 230 k and I am ready to walk away. The loan was then sold immediately to countrywide. Now I am dealing with them. I have an Hoa of 200 dollars a month and intend to pay that until the forclosure is final

Both loans I believe are purchase money loans since I haven't refinanced. (does it make a difference that one bank sold the original loan to a second?)

Ok guys I am ready to walk way. I make 6 figures a year but unfortunately have to move to the east coast due to family reason so the banks laughed at me when I asked to lower my payments. Can the banks come after me??

Any advice would be appreciated. eg: should i forclose on first laon then second or vice versa??

I don't know anybody in the area and I have a call out to 2 lawyers who I really don't know anything about. I mean what are the lawyers gonna tell me?? If anyone could reccomend a good one in contra costa county please let me know. My credit score is like 800 now and I have a good sum of money in the bank and I am single

[ProfessorShays]

Your two loans, given the facts as presented, appear to be purchase money and since they encumber your owner occupied residence, it looks like California Civil Code Section 580b is applicable, thus resulting in a "non-recourse nature for those loans. That effectively means your lenders' sole recourse is to foreclose on your home and you are not personally liable.

As always I recommend that you take both your purchase documents and your loan documents to a lawyer skilled in real estate law and debt collection practices to confirm you are protected from liability based upon this law.

The "non-recourse" characterization attaches at the time of loan origination. A subsequent sale of the loan through the secondary market doesn't effect this characterization.

Take care,

Daniel

[pcuser123]

Thanks alot, I appreciate you insight.

[pcuser123]

I am trying to cover all my bases prior to walking away in CA. I have 2 loans with countrywide (purchase money non recourse loans) and will miss my first payment this month. Listed my situation a few posts ago.

I am aware of the foreclosure act of 2007 that will not hold you accountable for the shortfall of what the bank gets for your house vs what you owe, in terms of them sending you a 1099 and considering it taxable income. Unfortunately this act only covers forclosures till 2009.

Now if I play games with the bank and live in it for a long period before they forclose and they don't recoup the money until say 1/2010. Will I be held accountable for the 1099. I think I would based on the forclosure act.

When does the bank generate the 1099?? When the house is sold?? there are Bank owned properties in my area not selling for months.

Is it a could idea just for them to forclose sooner. I wanted to live in the house as long as I could prior to getting kicked out. I paid 400 k for the home and i could be worth only 200. if they send me a 1099 for 200 k, were talking about owing 40-50 k to the irs.

Just checking what everyone thinks.

[Scott]

I was wondering the same thing, and searched and found this info on the CA Franchise Tax Board website... see the footnote #1 at the bottom. Maybe Prof Shays can confirm?


"The federal law covers qualified debt forgiven from 2007 through 2012,¹ and it:

• Limits the amount of qualified principal residence indebtedness to $2,000,000 for taxpayers who file as married filing jointly, single, head of household, or widow/widower, and to $1,000,000 for taxpayers who file as married filing separately.
• Does not limit the debt relief amount: it only limits the indebtedness amount used to calculate the debt relief amount.

Federal Mortgage Forgiveness Debt Relief Act of 2007
¹The federal law previously covered debt forgiven from 2007 through 2009. On October 3, 2008, the Emergency Economic Stabilization Act of 2008 (H.R. 1424) extended the federal period through 2012."

[ProfessorShays]

These "what if" tax question scenarios are just too vague to answer. My guess is the time periods, given my belief this market is heading down for a couple more years, are going to be extended.

Daniel

[faith]

Hello good morning,
A 1099 is issued by the Investor during the last day of the first month of each year. For example if your house was foreclosed or was sold in 2008, the Investor will send you a 1099 on January 31, 2009. The 1099 shows the debt forgiven including all the expenses they have incurred.

Hope this helps.


Faith.

[KT in CA]

The 1099 income is of great concern to me. We made our last payment today. Our tax issue won't come up until we prepare our return for 2009. We have a first and second and both are recourse (we refinanced a few times). I'm hoping some of the 1099-C amount can be reduced to either insolvency or the debt relief act. And in this case, I need to keep us as insolvent as I can up until the house forecloses, because I have a feeling that is the rough we will have to go to get some of the income reduced.
This is giving me nightmares. At this point I'm done with the house. I've accepted the fact that our $55k second may come after us and we'll get an attorney to deal with that. But I am petrified of owing ungodly amounts of federal and state taxes. I know we can work out payments with both but I am REALLY REALLY worried about it. I'm also hoping between now and the time when we have to file our 2009 income taxes maybe something will change more in the tax code. I doubt it though. I guess we just need to get a good tax attorney.
It will be interesting to read this forum come mid-February to see what kind of 1099's everyone is getting for those who foreclosed in 2008. Intersted to see how taxes pan out for those of us who do have recourse loans due to refinancing. Majority of people here seem to be non-recourse. Thank your lucky stars, you guys!

[homerunkevin]

I going into 2nd month of mispayment. I have realtor doing a short sale that just he just post it on market 4 days ago. I spoke to attorney this morning and he told me if it's non recourse the lender don't issue 1099? he also say that eventhough I refinance purchase money loan to get a lower rate but didn't take any money out it's still consider non recourse loan. He told me to call up Bank of America to find out. I spoke to one if Bank of america supervisor and she review my account with some hesistant. She say Bank of America would only take the house back and wouldn't go after any other asset. As far as tax ramification, she lender wouldn't send out any tax income but yet didn't respond 100% confident that the case or not. If short sale after 3 month don't work, I planning on just gaving this house back to the lender and hopefully the tax relief act applies to us.

[cdmosaic]

I'm a litte confused regarding the stress around the 1099. The way I read the debt forgiveness it does apply to refi's as long as money wasn't pulled out in excess of the origianl purchase. Am I missing something?

Does the Mortgage Forgiveness Debt Relief Act of 2007 apply to all forgiven or cancelled debts?
No, the Act applies only to forgiven or cancelled debt used to buy, build or substantially improve your principal residence, or to refinance debt incurred for those purposes.
What about refinanced homes?
Debt used to refinance your home qualifies for this exclusion, but only up to the extent that the principal balance of the old mortgage, immediately before the refinancing, would have qualified.

[KT in CA]

We bought our house in 2000 for $229k. We able to refinance several times and take cash out. Current mortgage is for about double original, and about $25k we took out for bathroom remodels. I'm hoping either some of the debt relief act or our insolvency will relieve some of the debt on the 1099. I'm thinking between what our house values at and what our mortgage is, that it's going to be about a $150k hit on the 1099. I believe we are relieved from capital gains if there are any, but I'm not clear on how the IRS debt relief works. So for us, being that we did take cash out, we will be taxed on some of that. I'm just going to keep us pretty insolvent up to the day before the foreclosure so we can show lots of debt. In our case, we could be talking about quite a substantial tax hit. And that has me VERY nervous.

[Lori56]

Another CCC resident here, but in Concord. Our trustee sale is Jan 15, next month. So far we have had 6 offers for our short sale since March, but potential buyers went away as the banks took too long to respond. We have a first (refi) with Wells Fargo, $480,000, which is an ARM. Second mortgage is $49,000 with Citimortgage and is fixed, loan was taken out beginning of last year. Of course, property value has dipped at least $200,000 since it was appraised at $565,000 in 2005, probably worth about $325,000 now. We have owned it since 2004. Now Citimortgage is making our lives really miserable by threatening to take all our savings in the short sale if we find a buyer in time. Right now I am the only one working, my husband is unable to find employment and we have credit card debt. We were pretty current on our bills too, but now in survival mode and have to pay what we can on them. Thank God we found a place to rent.
Just wondering if we can still DIL, as we have no buyers. Looks like there's no way to salvage our credit at this point, as we would like to buy in 2-3 yrs again. I tried to look for a similar story before posting; some of the legal stuff just baffles me. Just hope to not have a heart condition before all this is over with.

[pjd123]

KT in CA ,

We are also in CA and took out cash when we refied. We talked to our tax person (planning on getting a 2nd opinion but she was VERY confident) - she's sure we won't have to pay taxes on any of it - due to insolvency and the capital gains allowances - Boy do I hope she's right. Have you found anything else out about this?

Thanks,

pjd123

[KT in CA]

Nope. I haven't spoken with a tax person yet because we haven't even started the foreclosure process yet. I have searched far and wide online about this and it seems that insolvency works up to the level you are insolvent. If your liabilities exceed your assets by $80k, then that is how much income you can write off. And they look at your insolvency level the day before foreclosure, so timing is everything here. If you have cc debt, it's best to make minimum payments until foreclosure is final, and then pay bills off after that. That is our strategy anyway. And what may work at the federal level may not work at the state level as far as debt forgiveness. I'm not sure how the Franchise Tax Board is looking at it. I sure hope you are right though. Others on this forum say insolvency is hard to prove, but I've seen workups online of what kind of documentation they will accept to prove it. And if they mention insolvency on the IRS site in the mortgage debt relief info, then they must be expecting taxpayers to use it.

Crossing my fingers. This won't affect us until we do our taxes for 2009, so I'm very curious to see how others fare when they do their taxes for year 2008.

[pjd123]

Thanks for the reply KT in CA. I'm reading the IRS sight as well, and am understanding it the same way... which, as I mentioned before, is what my tax consultant said. Not paying off CC's until after the taxes are filed for 2009 just in case. Being the natural worrier that I am though, I'm starting to be really concerned about being able to get into a rental.... I wonder what its like to not have anything to worry about... lol

Good luck to you.

pjd123

[KT in CA]

I am a natural worrier as well. Having said that, I think it will be okay finding a rental. A lot of people are in our situations, and property owners/managers need to fill those rental houses. If we offer a little larger deposit or an extra months rent that most likely will help. I have said before that a local property manager told me that they understand the situation some families are in. She said if the credit report only showed the foreclosure that it should be fine, but if other things showed up (like other credit cards not being paid, etc) that they may ask for an extra months' rent or a co-signer on the lease. The attorney I spoke with is also a landlord, and he said he likes to fill his properties with people who have owned homes before because we know how to take care of houses. I think there may be a problem renting from individuals at times, but if you go through a property management company it probably will easier. That's what I'm hoping anyway.

I go from worrying about getting the phone calls when we miss our first payment this month, to worrying about tax liability, to worrying about our second coming after us, to worrying about finding a place to live that our kids are happy with. The most important of those is finding somewhere to live that makes us all happy. The other things can be eventually paid for, if we end up having to pay.

I too wonder what it's like to not have anything to worry about. But then I'm sure I'd worry because I didn't have anything to worry about. :-)

Take care.

KT

[925girl]

Thanks now I'm completely worried! I have a hard time understanding tax issues but can you explain what you mean by being insolvent and how is that proved? If I am in foreclosure then I should not pay down cc debt? I had a couple of cash refi's to pay down debt etc. Only 1 loan. Recourse or not? How do you know if your tax guy is even up on all these things? I can just see us getting jacked for the house by the bank and end up with the IRS chasing us forever. Is that possible??

[ProfessorShays]

925girl, your participation has been missed. One of your fellow Antiocheeans posted yesterday. Boy have values slipped there. I thought Lincoln here in Placer County was bad but it looks like its in great shape compared with Antioch.

As to potential tax liability, best bet is to talk to a tax expert. I can proudly say that not only do I dislike tax law, I'm not wasting my time trying to figure out something that is unfair, unjust, and just plain too complex to figure out for my simple intellect.

Take care,

Daniel

[925girl]

Thanks Daniel. Antioch has so many houses, empty big houses for sale by bank. Only a few years ago it looked like a town with potential. Everyone I know has to drive far to work but amazingly most of the few friends I have are holding on. Wachovia is now WFB. Will see if they are more "flexible". Always reading your replies....Best to you for a better year ahead.

Cristina

[pjd123]

925girl - sorry didn't mean to cause you more stress. My understanding, which may not be acurate, is that the more debt you have outside of your mortgage, the more 'insolvent' you are: in other words - the more 'unable' you are to pay the taxes. It just makes sense to me to keep that debt until my 2009 taxes are said and done (making minimum and timely payments, of course). Professor Shays is right though, getting profession advise is best and will also provide peace of mind.

Best of luck.

pjd123

[925girl]

Oh I will have some good questions for my tax man. For once he will earn his pay. Hope he's up on 580b etc. Somehow I'm sure we will be on the hook. My FICO is crashed so bad at this point the only thing left to do is rebuild brick by brick. Well, I hope I gain some intangible intelligence from all this blankety blank.

[KT in CA]

pjd123, that is how I understand it. Several people in our situation said it is a good idea to pay minimums on those cc's until the foreclosure has been done. To keep those debt as high as you can in relation to your assets.

925 girl, the information I have found online (again, I haven't spoken to a tax person yet) is that it is suggested to do a spreadsheet showing assets and liabilities, and to provide supporting documentation. Things like cc statements, loan statements, list of assets, etc.. But this is something your tax person should ask you to do when they prepare your taxes for that year. I guess we just need to be sure we get tax people who understand insolvency.

I too have a feeling we will be on the hook for something, so I'm just trying to keep it as small amount as possible by keeping my cc balances high until we foreclose. Hopefully that will help. I think we will all have a better feeling of the process once the others on this forum get their 2008 taxes done and we get their stories posted. At least the IRS has payment plans!!!

[oregonheaven]

I have posted a few times on insolvency claims. I will reiterate some of those points if they help you. First, insolvency is simply not an easy one to prove to the IRS. First, the calculation is made the day before your foreclosure is effective. Thus, if you start putting all that mortgage payment money in the bank, paying off debt, etc. your total assets to liabilities ratio will greatly limit your degree of insolvency over time. And remember, it's taking lenders a long time to foreclose these days. Second, you can only exclude COD (cancellation of debt) income to the extent you are insolvent. Third, virtually every asset is counted against you. Unlike other financial proceedings, the insolvency test under 108 includes retirement accounts as assets, and I believe also limits how much you can consider your home as a liability if it's underwater. Fourth, unlike the Mortgage Forgiveness Debt Relief Act of 2007 (MFDRA), the IRS is very experienced with the insolvency exception, and rigorously examines it. The "insolvency unit" at the IRS has many many cases that they have argued successfully in federal tax court. If you plan to claim insolvency, you must have amazingly accurate records, and be prepared for an audit, even if you are lucky enough not to get one. Much much easier to claim MFDRA on Form 982 instead, if you can qualify.

Also, remember, if you get into too much trouble with the IRS, look at all your options. Having an attorney help you with an offer in kind consideration request is a possibility if you find yourself owing thousands that you could never pay back. But be careful when going this route because it's really only a one time get out of jail free card if they decide to accept it.

As for 1099's, the guidance on the form itself tells you how lenders must treat the date of foreclosure. In general, the lender must utilize the date of foreclosure or abandonment or 90 days within that date for purposes of the 1099. But since MFDRA goes through 2012 now, I don't see this being an issue this year. Peace to you all. Good luck. Remember, I am not an attorney or CPA, go hire one for real!

[pjd123]

Good evening Kt in CA and oregonheaven,

Each of our situations are unique to ourselves so I'm not advising anyone here, just sharing what I was told.... Again, I've spoken to my consultant twice about this. She's been doing my taxes for years and assured me not to worry (my husbands retirement will be through a union, and we don't have 401ks) so we are safe there. We are getting ready to prepare a list of our physical assets; cars, jewelry, computers, furniture, etc. My consultant said the current value of theses items is whatever you could sell it for today. So look at Craigslist - I may have paid alot for my laptop last year, but wouldn't be able to get much for it now. The furnitue I bought a couple of years ago has no real value now. If expensive jewelry, etc, haven't been listed in insurance, how does anyone know you have any? We have 1 car payment - again, my debt on the car is going to wipe out the value..... My husbands truck is paid for but a few years old so not worth a WHOLE lot... you get where I'm going here. These facts will work in our favor.

Just information worth sharing.

[KT in CA]

pjd123,

You are doing what I plan on doing come the end of next year. Is this going to be something that will hit for your 2008 or 2009 taxes? I'm curious how it turns out for you. It won't hit us until 2009.

KT

[pjd123]

It will be 2009 - we are 90 days late as of January 1st so haven't been foreclosed on yet. We (regrettably) hired a 3rd party mediator in October before I found this sight. Not knowing any better at the time, I paid her $1200 to do a 'work out deal' for us with Homecomings. I know now, she wont be able to get what we need, which would be a large debt forgiveness. The good part of that now is that because she is trying to work with them, it may delay their foreclosing on us for awhile. In the meantime - socking away as much as possible each month. I almost wish it was for 2008 so I could find out sooner how this is going to impact us, but just have to wait.... difficult for an impatient person...

[KT in CA]

Yeah, we will be in 2009, and I hate not knowing how it will turn out. Maybe we will be able to get a feel for how it will be by the tax stories of others who file for 2008. I'm impatient too so I know how you feel. I guess once we are foreclosed on then I will start preparing our information. We are missing our first payment this month so we have awhile to go. Thanks for the info.

[pjd123]

KT in CA,

No problem. Be ready to be bombarded with phone calls from your lender - at least we are. Sometimes they are live calls, sometimes recordings. They even sent a representative to our front door - twice! "Just checking to see why you are behind on your mortgage payment"... Really? Did this stranger at my front door really just ask me that? Gee, I don't know, maybe because I can't afford it anymore..... genius! gzzzzzzzzz..... All of this but they're not willing to do anything to help us.

Did you sign up for Professor Shays sight yet?

[KT in CA]

I haven't registered yet.

We don't answer our front door if it's a stranger. As far as phone calls go, we'll see. We have talked with friends who are going through this and some have never received a single call from their lender. I'm doing all the leg work, dealing with attorneys, and will deal with tax stuff. My husband plans on handling the phone calls. He says he's just going to tell them not to call anymore and just contact us through email or regular mail. A friend who works for an attorney said they are supposed to not be able to call you at work, but I think they will. The first time that happens I will just nip that in the bud and tell them that I cannot talk to them. Wouldn't you think that when they call the first time, and you tell them we have no intention to stay in this house because or mortgage adjusts and we aren't interested in a mod, they would say fine and just stop calling. I can tell you that after the first time we speak with them, we definitely won't answer again. We have caller ID and don't answer the phone if we don't know the number. Can they get cell phone numbers if they don't have them already? I wonder.

[pjd123]

Hmmm.... I don't think they can get cel numbers if they don't already have them. Everytime I've ever talked to them they always go through this list of 'confirmation' quetions... like, address... I confirm... home phone..I confirm.... cell phone... yea right. I just say there is no other number for them to reach me. Have you considered telling them you are interested in working it out because that can draw-out the process, keeping you in the home, rent free, longer? You don't have to accept what they propose - just keep negotiating so prolong things? Just a thought.

[KT in CA]

That has been suggested, but I really don't want to provide them with any paperwork or pretend that I want to do something that I don't want to do. I honestly want it over with ASAP even though it will be nice to have that extra money as long as possible. We'll see what happens I guess.

[pjd123]

Thats understandable. When we first started the process by hiring the '3rd party' we really were interested and had planned to stay if they could work with us. But now that they don't seem to be, we know we can't. I'm going to keep trying but we're already 90 days late so we are getting ready to go... at least mentally.

[elpjohnson]

I understand how you both are feeling.....even though I was successful at getting a mod (after 10 long months and hiring an attorney) I was ready mentally to walk away from my home and so was my husband. Actually, there isn't a day that goes by that I don't think about it.....we're staying but only for the next 10 years or so......then we may be forced to walk. I don't think it'll be such a hard decision to make at that time because we went through so much to get the mod we have now......

[pjd123]

You got a mod? Thats great! May I ask, did they just lower the interest rate for a few years? We've been weighing all the options...My husband just turned 50, I'm turning 49 in a couple of weeks. If they come back with a payment we could better afford, we will still be upside down in 5-10 years, maybe longer. We are thinking we would be better off taking the hit on our credit now and start rebuilding rather than wait to try and start rebuilding 5 years from now. Also, if we can rent for anything under $1800/mo, we could be putting $1000/mo into savings, which we won't be able to do if we stay here. (is that confusing?)

Professor Shays, can you give me your input on my thoughts about walking now vs waiting 5 years?

Thanks

[elpjohnson]

Thanks No, we got 6% for the remainder of our loan (28 yrs)......I know a lot can happen in 10 years, that's why we're going to wait and see.....

[pjd123]

True - 10 years is a long time. Good for you for sticking it out.

[pcuser123]

Ok guys, i have posted my info here before and just doing it again to get reasurance. I missed my first payment on 1/1/09 and I have 2 weeks grace period. I am close to the point of no return.

Bought a townhome in 2005 in northern ca for 430 k, put 43 k down took 80/10 loan from a mortgage broker which was through a loan company. 2 weeks later loan was sold to Countrywide. It was a 5/1 arm. ***I never refinanced**** making this a purchase money loan. this my 1st home making it my primary residence. Home is now worth 230 k

Just to clarify:
My liability is covered through the law 580b in which the lender can only get the home back and not come after me.

Even if a 1099 is sent to me for the difference in the price of the home due to the forclosure act of 2007 I don't owe the IRS nothing.

I will continue to pay my hoa until I am totally forclosed???

Did I cover all bases??? Many people who post here are told to consult an atorney. I just talked to one on the phone and I told him all the information I just listed here that I learned from this forum and he was impressed that I knew the laws so thoroughly. I asked him if wanted to overlook all my loan documents, he said he didn't even need to do that and that I can proceed with my plan. (I had a conspiricy theory that my loan agent may have tricked me into signing a recourse loan, my attorney told me even if it sais recourse loan on the front of the document, since it is purchase money it is considered non recourse)

Ok guys, did I cover all bases????????????????????

This is a scarey situation for me. I am a very fiscally conservitive person who has alot of money in the banks and 401k. I never meant for this to happen, but I have not choice. I have to move due to a family emergency.......

I would like milk this situation for that I can. Please advise on what you would do to stay in the property rent free for as long as possible.
What should I do from the first call of the bank?? should I just not pick up daily?? should I give them a sob story?? should I tell them I want a short sale???

I tried to look up how to string the bank along as much in all these forums. But I couldn't find out to do it, and everyone does it differently. I really appreciate you guys' help.

Thanks

[pjd123]

Hello pcuser123,

I wish I had answers to your questions. Professor Shays is the best one for that. I like hearing the comfort that your got from an attorney though, thats great. I'm just the average home owner with no knowlege about this other than what I've learned here. It sounds like if all of your loan was used just for the purchase (none taken out during refies to pay bills, etc) you should be safe. For me, we took out money - we will be getting the 1099 next year - If I had money in the bank and 401K's I'd be freaking out! But I dont, and I know my assets don't equal my 1099 so from what I've gathered, we'll be safe. But just to be sure, if I were you, I'd doulbe check on your liability regarding money in the bank and 401k's, etc...

Good luck! keep us posted.

pjd123

[oregonheaven]

Pcuser123 -

You situation from a tax perspective is pretty straightforward to me. If your loan is indeed non-recourse, the accounting is simple. There is no COD income or a 1099 involved because the loan was non recourse. Thus, the only thing you need to calculate is capital gains. I assume the house will sell for less than what you bought the house for and less than the outstanding loan balance, which means that you have no gain to report either. In essence, tax free, have a nice day. If the loan were recourse and still used in entirety to acquire the property, as long as it was under $2mm and a primary residence, you would be able to exclude the COD income (difference between loan balance and the sale price of the house plus selling fees) on Form 982 when you receive the 1099, assuming the transaction is completed by end of year 2012. Your basis in the property for cap gains purposes is still the same (presumably the purchase price plus any improvements, less any claimed depreciation). The sales price is the lower of the outstanding loan balance or FMV. So, again, if it sells for less than you owe, no capital gain, have a nice day. Where you get potentially screwed these days is when you have a second mortgage or vacation home. Then you could looking at either a big tax bill, or possibly pursuing discharge in BK proceeding. Not an attorney or a CPA, go hire one for real. Peace.

[ProfessorShays]

pcuser123:

Your posting identifies what I think is a key benefit here for forum participants. That is, this is a place to become familiar with the foreclosure process and potential paths to follow for problem resolution, but it shouldn't be viewed as a source that can be relied upon to avoid the cost of hiring an attorney to review your documentation and give you a qualified opinion on what course of action you could and should take for your own personal situation.

I'm glad you are feeling more assured of your situation and the course of action you have elected to take. As far as what you should do to lengthen the amount of time it takes to "foreclose," were I in your shoes I'd adopt an approach that provides your lender with both words and actions which demonstrate a desire to avoid foreclosure through a possible short sale. Recognize that most attempts at short selling a home fail. So even if all you want to do is extend the time for foreclosure, failed short sale attempts may buy you some time. Additionally you can let your lender know that you are searching for alternative borrowing to bring the loan current (thus avoiding the potential of losing your home to foreclosure).

Lenders do not want your home, and may well cling to the possibilities you float out to them as reasons not to rush to foreclosure. So statements like "I think I may be able to get a personal loan from my rich Uncle Harry (or Aunt Harriet)" may serve you well in terms of buying time. But do ask your Uncle (or Aunt) for a loan but explain the situation to them in a fashion designed to insure that based upon the situation they will be unwilling to lend, thinking it a better idea not to throw good money after bad. After all, you wouldn't want to be accused of being untruthful to your lender down the road.

Take care and have a great weekend.

Daniel