Need advice in Las Vegas

[NV702]

First post here but i have been reading up for a while.

I have a 80/20 loan both with Countrywide. First is for $228,000 fixed 30yr@6%. Second is a HELOC purchase money only for $55,000 fixed 10yr@7.25% balloon. Never refinanced, original loan. House was purchased April 2007, no money down.

House is now worth $120,000 and its killing me to think I'll need to keep paying for around 15years to just break even, not even including the lump sum owed for the second mortgage due in 10.
Im current on everything but layoffs at work have me stressing big time. I can hardly put away any extra money cause its all going to the house.

Question is I want out, how do I do it? A loan mod does nothing because I can pay right now and i will only accept a principal reduction. I can try for a short sale but without a "current" hardship the bank will not go for it. I want to walk away but am afraid of the bank coming after me.

I own a rental home which is worth nothing cause its upside down too. My wife and I are probably gonna go back and live in that till we save up. Can the bank take that house too? Can I put what little savings I have into my wifes bank account so they cant take that?

It may not seem right to some people that I would want out without being delinquent on my payments but I want to take action now before I have no choice. The worse thing that can happen to me is living in my current house for 8 more years, lose my job and then still have to file bankruptcy anyways. Id rather rent a house now so we can save up and get something more manageable.

Im the only one on the loan for both the current and my rental house and also have a car payment just in my name. On paper I cant afford any of it, do I have some way to get out of this? Also I dont care about ruining my credit which is above 800 right now, so thats not an issue to me.

Thanks,
Dave

[The Professor]

Dave:

Unfortunately the laws in Nevada are not helpful and you are going to face challenges associated with to potential that your lender(s) can get post-foreclosure monetary judgments against you. I wish I had better news. This economic disaster directly impacts borrowers like you who do not have the antideficiency laws in place we do have here in California.

Daniel

[NV702]

Thanks Professor. What kind of monetary judgments? If any savings I have is no longer in my account what can they take? Wage garnishments? My 19 year old car? My upside down rental in the ghetto? By definition I am way insolvent. My wife helps with her paycheck but she is not tied to any contracts.

How broke do you have to be to file bankruptcy? With these laws that might be the best financial solution there is. Seems the more you screw up the more help you get from the government.

[maxx233]

If the lender does get a post foreclosure judgement, wouldn't BK fix that? I'm not entirely sure about that - but wondering about it for my situation too in case it goes that route. I have a consultation with the BK lawyer thursday, will let you know what I find out, although I'm sure Professor or others already have a good answer on that one?

Maybe stop making the payments so they'll actually talk to you about a mod, and tell them it doesn't make sense, plane and simple - a solution can be worked out now or it's just going to come up later as a real problem. Or, next time plumbing or some other expensive thing breaks, don't fix it yourself/live with it - pay for it to be done then claim it as a hardship. That's actually what started me getting behind 6 months ago (legitimately).. then at some point I snapped and decided this isn't worth keeping hoping to break even in 10 years from now and living with crushing financial stress in the mean time - I'd rather suffer the consequences of foreclosure/bk now than drag it out years from now.

[NV702]

I would like to know what happens with your consultation. I already faced the fact that staying in this house makes no sense at all. I can live with being upside down 10, 20, even 50 thousand dollars. But im at least $150k+ underwater on just my one house. The numbers can cause your hair to fall out once you factor in the interest on that amount. I cant save enough at this rate to pay the balloon second in ten years.

I already paid over $70k to Countrywide in 2 years its not like Im screwing them over. Without interest Id have this house paid in under 10 years. Sucks to think without this mortgage I can save enough to pay for a house outright in no time.

[Enough Already]

Hi NV702,

You're not alone. Our loans are recouse too. We've paid about $130K in payments over the past 3.5 years, and our house is now $90K underwater and falling. We just can't do it anymore. We've run ourselves ragged to keep up with our payments only to see the property value sinking and sinking.

It's a very hard decision - gut wrenching (as Dizzle put it) and it stinks, but I expect to feel a LOT better once it's all said and done.

[ORNV3]

Hi NV702,

My situation is very similar to yours so I know where you're coming from.

Those of us in Nevada (and other recourse states) have some serious consequences to face if we walk away. The most scary thing to me is the second loan. The second can come after you for up the 6 years because it is unsecured.

I've been going through this for a few months now and have found that my best option is bankruptcy. I'm just spending down some extra money and waiting to see if any laws change for a few months. I'm planning on filing at the beginning of next year. Personally I cannot wait around to see if I get sued for the next 6 years of my life!

I'm not suggesting that you file bankruptcy, but it might be something to look into. If you're household income is low, you don't give a crap about your credit and you just want out of the debt.... BK is an ending.

I didn't know ONE THING about bankruptcy before I started this journey..... it takes some getting used to I have to admit.

[ORNV3]

FYI
As for how broke you have to be to file BK in NV.....

Single person - $48,194, two person household - $60,557, three person household - $65,783,four person household - $74,735

[NV702]

That sucks, I guess I make too much. Doesnt seem like it as everything goes into the house anyways. I wish we had more people who just up and left in Nevada. Id like to know the real outcome of that situation. Ill take my chances on the second loan, but the first has me worried. With so many foreclosures in Las Vegas I wonder if the banks are going after every single person.

[Argh!]

Originally Posted by NV702

That sucks, I guess I make too much. Doesnt seem like it as everything goes into the house anyways. I wish we had more people who just up and left in Nevada. Id like to know the real outcome of that situation. Ill take my chances on the second loan, but the first has me worried. With so many foreclosures in Las Vegas I wonder if the banks are going after every single person.

There is a means test you can take (I did) every BK lawyer in town will give you a free consult.

[ORNV3]

Yes, even if you're over the median income you can still qualify for ch 7, if not you can do a ch 13. Just depends on your situation....

[cactus77727]

Hi NV702

I agree with the previous two posts. Why not consult a BK attorney or even two, and see what they say? Maybe they can give you some options that make sense. I understand Nevada is not friendly law wise. I hope you find a least painful plan for yourself. Although tough choice, BK is not the end of the world. Just ask Donald Trump. He's become very wealthy using bankruptcy!

It may not seem right to some people that I would want out without being delinquent on my payments but I want to take action now before I have no choice.

I'm getting foreclosed on soon in AZ. I don't want to, but in the long run it's for the best. Don't worry about what other people will think. Just do whats best for you. And certainly take action now, if it's to your advantage. Good luck.

[NV702]

Thanks, i will have to talk to someone here locally to see where I stand. I'm a very responsible person who likes to plan out everything before making a decision, which is why its so difficult to just leave my home behind. But if you dont have a choice theres not much you can do.

[ORNV3]

It seems like most people on this forum are responsible and want to do the best thing for their future. Knowing all your options is really important. I'm also a really responsible person who has to have a plan. My plan is to file bankruptcy but I'm not going to do if for almost a year. It's good to have a plan in place and know your options... feels better that way. No surprises.... hopefully

[maxx233]

NV,
I did have my consultation with the lawyer. We talked mostly about doing a shortsale option because it's better for credit obviously and he didn't think I was really at a point yet to really consider BK (also could have had to do with their BK package being about 1/3 the cost of their way overinflated shortsale package...) Anyway, it was interesting to talk to them, but I'm definately going to get 2nd/3rd opinions. The guys I talked to wanted a large lump sum for the whole deal... I'm looking for someone who's more willing to take a couple hundred bucks to answer some questions with specific legal references and review documents for me - the rest I'll do on my own for the most part unless I end up getting sued.

[NV702]

Thanks for the follow up. I think BK is out of the question for me right now as well. I will have to look strongly at a short sale. Im looking at a few SS specialists in town. So close to leaving it all and seeing what happpens, but thats not my style! Gotta do more research.

[maxx233]

Yeah, it's never been my style to give up on anything either. I think the nature of this whole ordeal has brought me to a place of "calculated giving up" though, which makes it feel more like a goal than a failing. I was fortunate enough that the agent I used to buy my house and who's also worked with my family actually contacted me about the idea of a shortsale, and he happens to be one of the better agents in town. So when I decided I was taking the foreclosure plunge I went to him as a "why not?" step. I'm not overly optimistic that my house will sell, but it does seem to be significantly better on credit and it's not costing me anything to try (other than keeping the house tidy.) That said though I'm glad I made the full decision that I was going to go into foreclosure (and shortsale happened to be an alternative to try) instead of deciding to do a shortsale and hoping it works.

[NV702]

Well this month im officially stopping payments. I have talked to a SS specialist and my house is now on the market. I dont see any gov't program that will reduce principal by over $150k any time in the future. I am still young and there is still time to rebound if I act now. Staying here is not an option.

[NV702]

I have a question about this process. My taxes and insurance are rolled into the mortgage, what to do about that? By not paying the mortgage I am also not paying on taxes as well. Also what about the HOA? Some say dont pay because your not staying in the house anymore. Others say you better do it or else. Confused.

[NV702]

Oh yeah and another question. Do I need to withhold more income on my w2 because I wont be able to claim interest this year?

[mollysfolly]

Nv702 I am in your same boat but like prof says we are in major trouble. You should seek advice from a bk attorny as they are seeking deficiencies as racoon stated. There are over 100 cases when i did a las vegas district court search and cross referenced the names of the insurance company and the defendant. There would be more but most file before foreclosure because it softens the blow according to the attornies I've consulted. The lady I will use will be a total $1700for a chapter 7. I just got an offer on the house for 103000 i now owe 285000 ish with fees purchased for 265000 so far 10 months no payments and no notice of default, I do pay hoa cause they are a thorn and even had to put rock in backyard or be fined at called to hearing in the futile hope of a short sale.

My loan was 80 20 same as yours with CW as servicer, BONY as investor on 1st and 2nd Wells Fargo investor, 2nd has lenders insurance, of course not disclosed, through old repbulic insurance as they hit my credit report a couple months ago and called to investigate fraud on the loan docs through an independent agency.

With regards to taxes and property ins your escrow will go negative and you do not need to pay also you can let the trash and sewer go as they'll lein the property and get payed off after foreclosure. I would live in the property as long as possible and have the wife save in her account name only as much as possible and you could purchase again as soon as she qualified. If you dont go the bk route they can garnish 25% of your wages and take cash or non exempt securities in your name after they get a judgement in district civil court. I never thought I would have to do this but I want to mitigate damages and after a Benefit cost analysis this will help me and my family recover and rebuild, I am keeping another house that is upside down because I will be here for at least 15 years and its a fixed rate fha loan and believe vegas will recover but not within 5 years. Good luck NV702 you are not alone and need to make the fiscally responsible decision for you and your wife's future. Anymore questions dont hesitate to ask?

[NV702]

Thank you for the thorough reply! I was not aware the lenders were still trying to go after the deficiencies so aggressively. What would trigger the lenders to pursue a deficiency without knowing your financial status? If all they are going on is what was used to obtain the loan then they wont have much to take, besides my paychecks of course.

My plan was to try and short sale with low expectations, Deed in Lieu, then foreclosure in that order. Then we will rent a house while saving up and purchasing a home down the road with a sizable down payment.

My one and only concern is the first mortgage as i plan on working on some settlement plan with the second. Any deficiency judgment will be devastating. Although my Realtor said wage garnishment is pretty much what is going on right now anyways. Im paying $2000 a month on a $900 a month house. Still doesnt make me feel any better though.

[JohnCampbell08]

Can i ask who you are working with or could you recommend a bk lawyer in vegas? Looking for a free consoltation that will not be a waste of time

And what would you recommend bringing with you for the consoltation? I figured the last two pay stubs, utility bills and the debts you are trying to liqudate via ch7?

[Moe Bedard]

Not on the forum...............as they have not had their credentials checked or been authorized to be on the forum.........

email the information to me, instead ***@loansafe.org