After 1 ½ years of debating, I finally missed my first ever payment

[crucifixion]

Been visiting this site since 07 when I first considered walking away, but kept on chugging, depleting savings and incurring credit card debt to get by. I’ve started numerous threads on here to get as much information as I could and Prof Shays and the rest have been really helpful. I’ve tried not to be a person that walked away, but finally I had no choice.

Before this, I never missed or was late on a payment of any kind. Credit score was over 770.

Quick background: Bought a townhouse in Los Angeles in 2005 for $426K, First & Second with WFB. In 2007, refi’d the second to BofA who gave me a cash out of about $25K. So total loan balance is now $452K. Today zillow values the place at $412K, but last year was about $300K. So don’t know what it would really sell for in today’s market. As far as my payments doing interest only, first is $1600, and second is $950, and HOA is $350. In 2008 I decided to walk away as I was moving to San Diego and would get an apartment. At the last minute, found a renter and rented for the last year at $2200/mo. While I was still losing money on the place, I was still able to get by. I stopped making property tax payments too since I knew at some point I’d walk away. Now, in 2009, after settling in my new job and saving some cash, we bought a house. Just as soon as it closed, I missed my first mortgage on the old place in July. Also stopped paying the second.

WFB called me literally as soon as I was one day late, left an automated message. They called for two weeks every other day. Now we are in August and they have been calling every single day. Can’t really say it bothers me. I thought I should file a cease and decist, but at this point, they call every afternon, I let it go to voicemail, and they leave an automated message, then I delete it, and that’s all. I suppose at some point instead of calling every day, they may call 2x a day or more. I think at that point it may get annoying. The second with BofA called me one time, that was when I was about 5 days late. They called 5 straight times on a Sunday, but didn’t leave a message. That was all. So no real harrassment from them.

I’m more worried about BofA since it’s a second that was refi’d, so it’s a recourse in CA, at least that’s what I’ve come to conclude reading on this site. So they could go after me for the full $112K I owe, or at least the $25K they gave me in cash. I’ve spoken to a few people who work in debt collections and they’ve told me, worst case scenario, after the sheriff sale, if the second still remains in full, and BofA sends it to a collections agency, that I could easily settle the $112K to less than $5K. They said that the workers work on commission and that $5K is reasonable for a person to get together, but theres no point trying to get someone to come up with $40K or so to settle a debt since they wouldn’t have that much cash on their hands in the first place. So if that’s they case, then I might not be too worried with the second because if the sheriff sale was say $375K, then $340K goes to the first, and the second could be reduced down to $77K and maybe I could settle with a collections agency for less than $5K.

The other thing is, I am still renting out to my renters. But the 1 year lease is up, so I’m going to send them a 30 day notice, but I might squeeze out a month or two of rent until they figure out whats going on when one of the banks will post a bulletin on the front door.

So as far as now, I don’t know what to do.

I guess I should talk to WFB and BofA? I dunno, I don’t really care too. Only thing I would talk to them about is filing a cease and decisist once they start annoying me.

There’s no point in doing a loan mod because the first added back the property tax I missed for the last year and set up an escrow account. So my payments used to be $1600, but then they increased it to $2700 just for the first. So add $950 for the second and $350 for the HOA, and even if I still rented it for $2200, I'm losing nearly $3000 per month! June 1^st was the first time the new payment was due and I reluctantly made it since I didn’t want a missed payment on the townhouse to show up and affect me closing on the new house.

So should I just continue to wait and just ignore the calls? Or should I file a cease and decist letter now? Or should I actually talk to them when they call me? Don’t see any benefit to a call, so don’t know. Kind of in limbo here about what to do and don’t really feel motivated at this time to do anything about it.

[jinksy]

Have you thought about just being truthful with your renters? Maybe give them a little break on the rent to ride it out with you? If they get a break to say about $1500 and know that it could go on for a year they might be willing.

[gravymark]

That's a great thought about the renters. Let them know what you've decided and let them know that the process does in fact take a few months, probably around 6+. You will know anyways when the time is coming through the NOD which states your auction date. Give them a break, you get some cash, they can save some cash and take their time finding a place and that way they save up a good chunk of a down payment or lots of future rent money. I'd say let them pay half of what they are paying now.

Either way, the cease and desist letter won't do much. I sent one to WFB and still got the calls. They got around my letter by claiming to never have received it at "that" department and that I would have to send one to each department that was calling me as my case got escalated. I know that was a lie because the same person called me multiple times. I answered the phone sometimes. The calls really stopped after 2 months. I haven't received a call in months.

To be honest you're in the waiting game time frame now where you simply just have to wait and hope for your NOD letter to come through.

[crucifixion]

As fate would have it, my renters fell on hard times the last month. They barely made last months rent, and just after I started this thread I got an email from my renter saying his work got cut back and they can't make rent. So I'll be taking their rent from the security deposit, and then what I'll do is what you guys recommend, and thats cut the rent to whatever they can afford until the house is foreclosed.

As far as the cease and decist, how do I get the exact address for WFB and BofA?

[Enough Already]

I wouldn't worry too much about the cease and desist letter. They won't listen to it anyway. I even tried directing calls to our attorney's office, and that didn't stop them from calling us.

If you're not interested in working anything out with them I could just ignore their calls, or answer once a month. We just stopped answering, and eventually the calls stopped all together.

Good luck to you!

EA

[crucifixion]

Yeah I have no problems ignoring the calls. My concern was that they would take it to another level, like searching the records and getting hold of my work and/or family to get in contact with me. But if all they do is just call my cell, I can wait until they stop calling.

[trappedincali]

I don't believe you can request a C&D from the original creditor, only the successor who buys the debt. I do believe that that cannot contact you at work, once you inform them that you are not allowed to receive such calls there AND they cannot contact friends and family once they have a working contact number for you.

As far as your approach with BofA, you may want to be a bit more proactive with them. You may have a better chance of settling with BofA than a second hand collector. The latter is in the business of rigorously assessing your ability to pay, and may be less likely to negotiate a settlement. I've seen second hand collectors wait for years, regularly checking on your financial position. They can come out of the woodwork at very inconvenient times.

If you communicate with BofA regularly, and indicate your intention to reach a settlement, it could help if you in the event that they (or the collection agency) sues you and attempts to garnish wages or place liens against property. If you show up in court with proof of your attempts to work out a solution, the judge may not award them lien or garnishment as easily as someone who simply avoided them.

Chances are, BofA will sell that debt for pennies on the dollar to the collector anyway. Might as well settle with you for pennies on the dollar.

BofA is my recourse second as well, and they have not been willing to talk about settlement until the foreclosure is finalized or they hear from a bankruptcy attorney. For me, that should happen in September, but I have yet to get a sale date on my property.

Good luck in whatever you choose.

-Lee

[crucifixion]

Update-

So WFB had stopped calling me for a while, pretty much just once a week and leaving messages. Message changed from a generic message, to say "this is Jessica from WFB, please call about your mortgage"....still let them all go to voicemail. This "Jessica" called about 4 times and left messages...its just another automated message, so I was not interested in picking up the calls. Not that I was trying to avoid them, but they always called when I was at work and didn't have time to answer.

Today they called again and I have a light load today, so decided what the hell, lets pick up the call. Part of the reason I wanted to talk also was that my renters have stopped paying rent. They've also stopped responding to my messages. Don't know if they know the property is going into foreclosure (the bank may have posted a notice on the door?) but whatever it is, they aren't paying or talking to me.............so spoke to a nice lady (not named Jessica lol) and I told her I had renters who have stopped paying, she said she understood and basically, I can do nothing and just let it go to foreclosure, or I can go thru with the eviction process and then try to save the home. Or I could do a DIL but the house needs to be on the market for at least 3 months at fair market value and since I'm already 3 months late, she said another 3 months the house will be in foreclosure so foreclosure may happen before I could complete DIL. They said if I do get the renters out to call them and they will send a team out to board up the windows/doors so that no one vandalizes it. And that was pretty much it. She gave me a number for their Short Sale department, so we'll see if I can go that route.

So I have no problem with a foreclosure. My only concern is that I have a second with BofA and its recourse and my only concern is how much can I negotiate a sell off of that debt. But as I mentioned in my first post, BofA called one time and that was it.

Should I contact a real estate company to list the house now?
Should I contact my BofA second now, or wait for them to get to me?
If my renters know I'm letting it go to foreclosure, is there anything they can do that can screw me (other than damaging the house)? Our rental agreement expired 7-31, so we agreed on a month to month after that.