Walk away in WA State?

[sqa4life]

Hello,
I really need help on this.

My wife lost her job back in Nov. 2008. We've been borrowing money from family members and friends to keep up with the mortgage. In Jan 2009, we had a new baby and our monthly expenses have been double. health insurance increased from $92/month to $350/month. We can't handle the mortage any longer. We're one month behind.

I contacted CW and they told me to send them all the documents to consider for the gov. loan modification program, I did and never heard back from them. I called them yesterday and they said my application has been denied.

I only have one loan.
currently balance is: $345k
House value: $280k
I live in WA State.

-If I save as much as I can to be prepared to rent an apartment and take care of my new baby. How long can i stay in the house?
-Will I have to repay after the house is foreclosed?
-What do I need to do to be prepared?

Thank you

[Enough Already]

Hi Sga4life,

Thanks for your post. Professor Shays is the resident expert on walking away, but he's been tied up with finals recently. He should be freed up next week and back to answer questions then. In the mean time here's a link to Washington foreclosure laws: Washington Foreclosure Law

With a new baby, and the financial burden I know you must be under a lot stress. The best advice I can give you right now is to call around to a few attorneys in your area who specialize in real estate law, and debt collection. A good attorney should be able to advise you and put you at ease. Many will give you a free initial consultation too. We had to talk to about 4 before we found we felt was really competent, but they're out there.

Good luck and please keep us posted.

[sqa4life]

Thanks EA.

While waiting for Prosfessor Shays, I'll call around for more info.

WA law has:
- Deficiency Judgments Allowed: Yes

I am not sure how that will impact me after foreclosed.

[sqa4life]

one more question. My wife is NOT on the loan, only on the title. will that impact her credit after the foreclosure?

[sqa4life]

help! anyone?

[helpinNE]

Since WA is a defiency state, I would recommend listing the property for a short sale. This is not always an easy process but will either eliminate or limit your potential for a deficency judgement.
If you have HOA dues and decide to fgo the forclosure route, make sure to continue paying them through this process as they can come after you personally for them.
If your wife is NOT on the loan, only the title, have her sign a Quick Claim Deed over to you to remove her name from the title. If her name is not on the loan, her credit should not be affected.
Do what you need to do to take care of your family. I would echo EA's suggestion that you find an attorney who specializes in real estate and debt collection to advise you on how long the process takes in WA and what you can expect.
Best of luck!

[dogatemy]

Originally Posted by sqa4life

Thanks EA.

While waiting for Prosfessor Shays, I'll call around for more info.

WA law has:
- Deficiency Judgments Allowed: Yes

I am not sure how that will impact me after foreclosed.

This is where an attorney will be helpful. Most states allow deficiency judgments (even Arizona where I am from) but they usually prohibit the sale of the house until after litigation which could take years. Even if they can sell the house then they still have to contend with the fact that you are usually insolvent or going through bankruptcy. In either case you can't get blood from a stone.

Keep posting your questions and your journey through this mess. Let us know what your attorney says. You can help offer some guiding light for the next person in your shoes.

We're here to listen and to help!

[mybailout]

I haven't paid CW since Sept. 08 and haven't heard boo from them in three months. Once I hear from them it should be 4 months before they can foreclose so it could be a year.

[The Professor]

sqa4life:

The key to your question rests upon whether your lender chooses to follow a non-judicial or judicial foreclosure path. My sense is they will likely follow the non-judicial path because it avoids a post-foreclosure right of redemption, is less expensive, and can be completed faster. The judicial process is just too challenging and lenders want to get this behind them, just as you do.

Support for this conclusion can be found in the statute linked below:
RCW 61.24.100: Deficiency judgments — Foreclosure — Trustee's sale — Application of chapter.

So at this point, given your situation, my sense is you can relax. However I do encourage you to confirm what I've indicated by contacting a Washington lawyer skilled in real property law and debt collection practice.

Daniel

[sqa4life]

thanks Professor
I can sleep well tonight.

[judithoo5]

program, I did and never heard back from them. I called them yesterday and they said my application has been denied.

why were you denied?

[The Professor]

Sleeping well is a good thing. I really feel for those who are facing foreclosure in states like Florida where lenders have the right to go after a deficiency judgment even after they complete a non-judicial foreclosure.

Daniel