California - Walking away in the SF east bay

[Screwed11]

I have 3 boys, ages 16, 13 and 9. The older two are game for moving, but we are moving back to a house they once lived in so I think that is comforting. Plus, I think the location is more central to their activites, it's closer to our small downtown and some of their friends.

The youngest one is okay, but it was upsetting at first. He has a buddy across the street and our current neighborhood is great for running around and playing in the street, which is why we moved here. Our old house (that we are moving back to) is on a busier street and the kids won't be able to play on it. The younger one is the only one impacted by that.

It's a little hard being in limbo, but saving the money is what makes it worthwhile. I would not move out of the area, our school district is acceptable, not great, but kids are happy here.

I hope things move quickly for you if that's what you want! : )

Good for you, girl!!! Wish my situation was easier, but I'm working on it.

Yes, I really want it to be over and done with, and start afresh ASAP. We have a lot on our plates right now... our youngest has been diagnosed with developmental delays and needs aggressive early intervention, the tween resents having to move to a different school, and leaving all her friends behind, but the twins are, luckily, the only ones for whom nothing will really change, aside from the neighborhood. I am most worried about my tween... told her that given that she'll be in middle school soon, she would have had to change schools anyway, but she is at that stage where she's full of drama and can be sulky and difficult. I'd have stayed put but our school district went to the dogs... too many kids in one classroom, fewer teachers and aides, deteriorating quality of the neighborhood since too many homes are in foreclosure and many have been vandalized or squatted on, not enough county-funded services for early intervention... I better stop, I'm depressing myself again.

My hair literally is falling off in bunches from the stress. I really want this to be quick and fast. You know... guillotine me already instead of killing me with arsenic. I hope CALHFA does not take 13 months like your lender does. I want them to foreclose yesterday, if possible.

But good for you and your boys... glad it's relatively painless for you folks, and that you are able to save money whilst having another house to move to, ready and waiting in a GOOD SCHOOL DISTRICT for you.

[MargaretC]

I imagine it would be hard on your tween to move, and she needs to go through her feelings, but she'll
most likely be fine! My husband met his best friend after a move in middle school, so things work out.
Hopefully she'll see that in time. Take care of yourself and de-stress if you can! Hair falling out does not
sound good.....

Hang in there!

[MargaretC]

Update: I received a settlement offer from Oxford yesterday - $73,000 (approx)!

Another item for the recycling!

My older kids are restless, wondering when we are going to move. It's a bit hard
being in limbo but I told them we are making $1800/month by not moving.

[TomEason]

Update: I received a settlement offer from Oxford yesterday - $73,000 (approx)!

Another item for the recycling!

My older kids are restless, wondering when we are going to move. It's a bit hard
being in limbo but I told them we are making $1800/month by not moving.

MargaretC
If you decide it would be more convenient to move earlier, you might consider moving into your next living accommodation, and then renting out you present home. This is an option I often remind fellow members to consider. You might be able to make even more $$ than the $$ you're saving. But, you have the numbers and can figure that out. Good luck!

[MargaretC]

Just saw this tomeason. Funny, I was thinking about that last night..... we'll definitely consider that.

Update: No NOD yet, but I decided to play the "HAMPster Wheel" game and sent in an incomplete HAMP package recently.

Yesterday I received the "Notice of Attempt to Accelerate" from BofA. They want us to pay up $47,000 by May 18 or else! Good luck w/ that. Obviously we are doing the right thing by walking away since I don't even have half of that saved by not paying the mortgage......

[Screwed11]

Just saw this tomeason. Funny, I was thinking about that last night..... we'll definitely consider that.

Update: No NOD yet, but I decided to play the "HAMPster Wheel" game and sent in an incomplete HAMP package recently.

Yesterday I received the "Notice of Attempt to Accelerate" from BofA. They want us to pay up $47,000 by May 18 or else! Good luck w/ that. Obviously we are doing the right thing by walking away since I don't even have half of that saved by not paying the mortgage......

WOW... a year and three months of no payments and still in the house, Margaret? Good for you!!!

How is your credit doing, though? Enjoy the free rent while it lasts... we start skipping as soon as his job becomes "permanent" but really want it to move ASAP.

[MargaretC]

Credit score is around 692 or something like that. I really don't care about that anymore.....
hopefully it won't come back to haunt us. When we first started our walk I thought we'd
be out in about 7 months, it's amazing how things have gone.

How's everything w/ your family? Do you know where you are going to move? I'm out of touch,
haven't been on the forum a lot lately due to upheaval in my life (as if the looming foreclosure
wasn't enough).

Take care!

[Screwed11]

Margaret, sorry to hear about all the other trouble... hope things get better for you. It's funny how subsequent problems (especially over health, jobs etc) make pre-existing ones (credit scores, foreclosure etc) seem almost insignificant in comparison

We know where we want to move and we've already scooted out a few apartment complexes in the area. We plan to sign a lease around the time we get 90 days late and even have an explanation ready for the property management company in the form of a tiny white lie (home is on sale). We will be staying in the house until it forecloses though, simply because vacant house insurance is so expensive and because we don't trust our trashy neighbors. Weird, huh? We'll be paying rent on the apartment (about half what we pay on our mortgage) but we will not be moving into it until trustee sale. I consider that 1/2 off, actually, rather than completely "free" rent.

BTW, do you plan to live there for as long as you can? We will not be adopting any stalling strategies. We will be buying a minivan as soon as his job becomes permanent, then default on the mortgage. Hopefully, we'll be out in between 7 to 10 months... not any longer as we want to move on and start rebuilding our life / finances again.

Good luck and please keep us posted. Keeping fingers crossed for you and sending prayers your way that things settle down soon for you.

[MargaretC]

Margaret, sorry to hear about all the other trouble... hope things get better for you. It's funny how subsequent problems (especially over health, jobs etc) make pre-existing ones (credit scores, foreclosure etc) seem almost insignificant in comparison

That's for sure! Thank you for your kind words.

BTW, do you plan to live there for as long as you can? We will not be adopting any stalling strategies. We will be buying a minivan as soon as his job becomes permanent, then default on the mortgage. Hopefully, we'll be out in between 7 to 10 months... not any longer as we want to move on and start rebuilding our life / finances again.

I am currently stalling, applying for HAMP, but I'm ambivalent about it. Mostly because I hate living in limbo and I think it's a bit hard on my kids. Also, the house we are in right now is in need of work and I don't like living in a dumpy house! I've been cooking on a hotplate because the stove is broken, for example. We are thinking of moving back to our rental and renting this one out. Especially, since the other day I was at our rental w/ a tree person getting a quote for some work and our tenant was all worried that we are going to sell the house. She asked me to let her know if we decided to and I was caught off guard and fibbed badly. So, I'm planning on calling her and telling her that we will probably need to move back there within the next year but I'm not sure when. I might encourage her to move out in the summer since it's an easier time to move.

[losingmymind]

I received a HAMP application today. I didn't ask for one. My BK was discharged in October and I do not want to reaffirm this place. At first I was hoping to be out this summer. Now, I have some medical issues I have to deal with (no doubt brought upon by the stress) and am hoping to stay as long as possible. My last payment was 7/10 and no NOD. I'm hoping this HAMP envelope doesn't mean I'm in their radar. I'm guessing ignoring the HAMP envelope is the best way to go.

[MargaretC]

Hi losingmymind. I'm sorry to hear about YOUR health issues.

If you want to stay as long as possible you may want to visit tomeason's
"HAMPSTER Wheel Game" thread. I'm tinkering with stalling our NOD by following
the suggestions on that thread.

[losingmymind]

If you want to stay as long as possible you may want to visit tomeason's
"HAMPSTER Wheel Game" thread. I'm tinkering with stalling our NOD by following
the suggestions on that thread.

Are you going to use the applications from February, or have you received more. Mine has a deadline of one month. Keep us posted on what you are going to do

[MargaretC]

I submitted the one from February, but I've received about three or four more. I'm getting calls asking for missing docs and I emailed the women who called me saying I'll send them when I get back in town. She responded by email then called me a few days later asking for the docs, apparently forgetting or not realizing we had already communicated by email.

Update: I got an offer of 50% settletment from the new collection agency "Allied International Credit Corp." I was happy to see that even though we don't have the money and will ignore it.....it was just nice to see the reduction without any effort on my part.

[MargaretC]

Update: Still on the HAMPster wheel! I just rec'd a fedex packet with letter requesting missing docs due 6/18/11. So I'll be sending those in.

Also, received another settlement offer from collection agency for 30% of our second mortgage, still don't have the money.....

[TomEason]

Margaret
Glad you're still on the Wheel. BTW, a settlement offer of 30% is about 3 times too high. A 6-10 % settlement is more like it. So, even if you had the $$, it would behoove you to wait for a decent settlement offer before you even condescend to talk with these people.

[MargaretC]

Hi TomEason. Forum Moderator.... did you get a promotion??? : )

Thanks to your advice in the past I will continue to ignore the collection agency offers, unless they come up with a really good one! I'd be thrilled with a 6-10% offer and would probably pay it just to be free of worry of what could happen down the road.

Thanks so much for all you do around here and take care!

[TomEason]

Hi Margaret
Thanks for your post and your comment. I'm glad you intend to continue ignoring the CA. Well, as far as the moderator hat, Moe anointed me when I asked him to do some things like making certain threads stickys, etc. He said, "why don't I just make you a moderator and you can do that stuff yourself". So, other than that, I don't really do anything differently, and am still doing what I enjoy most, which is answering the more interesting and challenging posts. I, however, often don't have the patience or tact to deal with some of the more elementary questions.

[jayguy0710]

I, however, often don't have the patience or tact to deal with some of the more elementary questions.

That's what I'm here for! Juuuust kidding kinda, there are plenty of people to answer these questions but I can understand your lack of patience, it does feel like new forum members should need to spend a minimum of an hour researching their questions before posting; feels like I've replied to a lot of elementary questions lately. Heck though, who am I kidding, I probably did the same thing when I first found this site: ask questions and search later. Thanks for doing all you do though, Tom.

And good luck on the Wheel, Margaret . . .

J

[MargaretC]

That's what I'm here for!

Funny! I was thinking the same thing, although I hesitate to even answer many elementary questions, this is not my forte. I worked in mental health before becoming a SAHM. Give me a psychotic adult over this kind of stuff any day!

Thanks J & TomEason!

[Screwed11]

[QUOTE=MargaretC;342064Give me a psychotic adult over this kind of stuff any day!
[/QUOTE]

But, M, "this kind of stuff" is EXACTLY what produces a psychotic adult

[MargaretC]

Well, I'm here for you then! ; )

[MargaretC]

Update - I've been reflecting the past few days and realize that when we (althought it's kind of just I since hubby is not involved w/ this and defers to me, bless his heart) I thought I was doing a "strategic default," choosing to walk away for business reasons. Now, I realize, I actually CAN NOT AFFORD the two mortgages I have. The signifiicance of this is the layers of denial that I have unpeeled. I wonder how many others out there are in denial and don't realize where they could be headed.

On another note, I confess to a mindless enjoyment of the show "House Hunters." I always wonder when I watch older taped shows what happpened to the buyer. I feel sad when I see that they bought their house at the height of the market and wonder how they are faring....maybe they are on Loansafe!

Another update: I applied for a job online today at JohnMuir Hospital and when I got to the end of the online app a screen about a crediit check popped up! Yikes! Oh well.. whatever. The world is so dumb sometimes 'cause I'd be an awesome employee....

[TomEason]

Hi Margaret
Thanks for you insightful musings. I too remember enjoying watching "House Hunters" before the bubble burst. FWIW, I'd hire you regardless of your credit, because you're obviously very intelligent and resourceful.

[MargaretC]

Thanks TomEason. ; )

UPDATE: After stalling as long as I felt BofA would put up with, I submitted missing HAMP docs by fax on 6/21/11. I received a fedex letter saying I was denied due to missing docs on 6/27/11, then yesterday, 6/28/11, received another fedex letter saying they had received them and appliction is under review - LOL. I wonder how long it will take. I keeping my fingers crossed on the timing, as I was last year, hoping not to be moving during the holidays!

Also, it appears that an "Assignment of Deed of Trust" was filed on 6/6/11 which from what I gather hear means the bank is preparing for foreclosure.

[Ready2Run]

MargaretC - Thanks for the update! Wishing you all the best.

[MargaretC]

A belated Thanks Ready2Run!


UPDATE: After receiving urgent call from BofA right before We went on vacation in July, I stalled then faxed missing docs for HAMP App when we got back in mid July. I haven 't heard a word since except a response to an on-line QWR I did which I haven't had time to look at yet.


Today I rec'd a note fromBofA saying I have a right to dispute the debt, which by the way is higher due to added fees - lol!Also received a collection letter for our HELOC from a new collection agency....what happened to the old one????

[freedomwon]

Hi Margaret - Hope you had a nice vacation! I would encourage you to dispute the debt. I wrote a doozie of a letter. You can go here to post # 95. My recent letter to BofA (Part 2)
I specifically asked them questions I was pretty certain they could not answer. It will definitely buy you more time on the hampster wheel.

P.S. I love your new icon!

[MargaretC]

Hi Freedomwon-Thanks so much! Yes, I remember your famous letter now! : - )I will check it out and dispute the debt....on day 29!

[norcalstuck]

Margaret C, I am also in East Bay, and when you mentioned John Muir, I decided to ask-- where are you?

I am in Pleasant Hill and just started strategic default Sept on first and will do Heloc in Oct as hubby misunderstood our decision to default included the Heloc and he just paid it, rats!!! And I also like your avatar, can you tell me how the heck you posted it on this site. I can't seem to find out how to do it

We are defaulting on Chase, they are first, Heloc and the CC we are running from. We started wth WAMU for the first, then in 9/2008, or there a bouts, it became Chase. Interesting for us is that we had a 5 year interest only with WAMU starting with purchase in 2003, then in 8/2008 WAMU offered to modify our loan giving is another interest only 5 more years, but of course at higher interest 6.325. We took it as hubby had lost his job, forced tor retire and my consulting business was about tanked, so feat drove us on that decision. Now, Chase can't produce that document from 2008, can only provide us with the original loan docs which we already have. We have lost the 2008 new docs and apparently so has Chase! Wonder how they will foreclose without that?..Hope to hear from you. I have a thread " strategic default first and second Chase in calif. Thanks for listening to my ramble.

[MargaretC]

Hi norcalstuck! This is fun, we live in the same city! I live near Mangini Farm. Our rental is in Gregory Gardens. Would you like to share where you are? I read your thread and I'm jealous that you are retiring! Not sure my husband and I will ever retire at the rate we are going.....

Welcome to the world of strategic or necessary default! It feels strange at first but then it's fine, especially when nothing happens and your are still living in the same house! I may be singing a different tune when we finally get our NOD.

Anyway, it only took me about a year and a half or so to get an avatar and I had to have Cat, from this site who offered to do it for me do it because I thought something was wrong on my computer. Anyway, I was looking under "My Profile" to upload an avatar but you actually go to "Check My Stuff" and on the left side is a list of actions, one being "edit my avatar."

[MargaretC]

Update

Nothing happening - that's my update!

I have been ruminating about whether or not to call BofA and check on my HAMP application. It's been since July and I've heard nothing. Since I'm disinclined to talk to anyone and since I don't want to draw anyone's attention to me, in case my file is sitting in a pile somewhere, I've decided not to call.

I chatted with an acquaintance recently, she told me she worked in the mortgage dept at BofA. I was compelled to tell her what we are doing. Found out she did the same thing! She ran it by HR first she told me- LOL! It's nice to connect with people in the same boat, though I don't wish for them to be.

[Pejutah]

Margaret,
I have been following your thread with interest. I know your neighborhood as I drive through there often. Always wanted to stop in and see what that ravioli place is like...never have.
I wish you nothing but the best in your move...amazed you've been in there so long! Hope you are getting a nice big nest egg for the life that is to come.

[bcabo]

MargaretC,
Did your friend who worked at BofA have any issues with her job after she walked? I would be curious to know if there were any repercussions, or if she got any special treatment because of her employment. like if the banks have some sort of employee loan mod program.
That made me think about something else too. I wonder how many of the banks employees are defaulting, getting mods, etc. Probably a fair number of them. I wonder if some of the ones giving the "you need to do the right thing and pay your mortgage" spiel are not paying their mortgage themselves?

[MargaretC]

I have been following your thread with interest. I know your neighborhood as I drive through there often. Always wanted to stop in and see what that ravioli place is like...never have.
I wish you nothing but the best in your move...amazed you've been in there so long! Hope you are getting a nice big nest egg for the life that is to come.

Hi Pejutah - Yes, that place is minutes down the street. I've never gone their either for some reason....I'm going to get some and report back!

I know, I can't believe we've been here this long, unfortunately our nest egg is about 1/2 what it should be. Hopefully by the time we move the economy will be picking up which will help my husband's small business.

Thank you and best wishes to you.

[MargaretC]

MargaretC,
Did your friend who worked at BofA have any issues with her job after she walked? I would be curious to know if there were any repercussions, or if she got any special treatment because of her employment. like if the banks have some sort of employee loan mod program.
That made me think about something else too. I wonder how many of the banks employees are defaulting, getting mods, etc. Probably a fair number of them. I wonder if some of the ones giving the "you need to do the right thing and pay your mortgage" spiel are not paying their mortgage themselves?

Hi bcabo - I know she did not get a loan mod as they went into foreclosure and moved, even before they had to. I did not get the impression there were any repercussions but we did not go too in depth with our conversation.

Next time I see her I'll see if I can get more detail.

Take care.

[MargaretC]

When I pulled out the newspaper (Contra Costa Times) yesterday there were two entire sections devoted to legal notices, mainly Notice of Sales. Wow. I've never seen that before. Sad.....

I've been pondering our other house that we've been renting out and are planning on moving back to once we get booted out of our current home. It's probably around $40,000 under water at this point. The mortgage is close to what rents are, maybe a little higher, but we don't want to walk away from it because we'd have to pay capital gains, and also because of sentiiment.

I realize that eventually the mortgage will go up quite a bit.... I wonder if we'll be able to get any help with that down the road....

I don't want to make bad business decisions, but also my kids (and their parents) have been expecting for the past TWO YEARS that we are moving back there. It would be another loss. It's always been comforting to know we have another house, but I don't want to be dumb about it.

Does anyone have any advice?

[jayguy0710]

I've been pondering our other house that we've been renting out and are planning on moving back to once we get booted out of our current home. It's probably around $40,000 under water at this point. The mortgage is close to what rents are, maybe a little higher, but we don't want to walk away from it because we'd have to pay capital gains, and also because of sentiiment.

I realize that eventually the mortgage will go up quite a bit.... I wonder if we'll be able to get any help with that down the road....

Does anyone have any advice?

$40K underwater isn't that significant, although I saw yet another article today indicating that home prices are falling again (I guess they never truly stopped) - they mentioned San Francisco specifically. Also, not sure what 40K underwater is in terms of a percentage - afterall $40K under on a $100K home is a lot diff than $40K under on a $400K home.

I assume that the loan on your now rental prop is an ARM? And/or interest-only? I say that because you indicated that "eventually the mortgage will go up quite a bit" ... Depending on when that ARM/IO is due to reset, walking now may make sense. That said, from my perspective it would be nice to have that "safety blanket" of your own other home (despite it too being underwater) to run to, rather than having to rent from someone else. I'm curious: is/are the loan/loans on your rental property recourse, or non-recourse? If non-recourse, I'd be less inclined to walk now, since both for legal and tax purposes no negative consequences would result if you did eventually walk. For example, if you eventually did move back into the rental house and later wanted to walk in the year 2015 - if it's non-recourse, there is nothing stopping you from doing just that (no deficiency, no taxes). If the loan(s) is/are recourse, it could further complicate matters because of the MFDRA.

My in-laws are in a similar situation, they have recourse loans, about 10% underwater give or take. But they have an IO/ARM that kicks in in a few years, they must start paying principal (over the 20 years remaining on the loan) which will cause their payment to skyrocket even with today's low rates. Their plan is to stay put for now since renting would be more expensive (since they are only paying interest and the rate reset to around 2.5%!!) but eventually will need to walk. For them, waiting until after the MFDRA made sense for a variety of reasons.

I'm sure you'll make the right choice Margaret. As you undoubtedly already know: "knowledge is power" and you've got a lot of it yourself and resources here!

[MargaretC]

Thanks jayguy -

We owe $419,000 and the house down the street recently sold for $385,000, but it had two baths instead of one.

It is an I/O but it reset last year and our mortgage actually went down! The interest right now is 2.56800%. It went down a little this year too. It's based on either the 12 month treasury average or the or the 1 year constant maturity treasury rate, one is for our current house, I forget which one. I think they are similar. Anyway, they continue to go down. I wonder how fast they can go up.

I pay the minimum payment but it appears that this YTD I've paid 1/2 to interest and 1/2 to principal. I don't really understand it completely.

The loan is recourse because we refinanced but we only have one loan so I'm thinking if we ultimately had to walk away all that would be done is the house would be taken.

I know there is a cap on how high our interest rate can go, but I forget what that is. I'll have to look into that.

[jayguy0710]

Hmm, your situation sounds a lot like my in-laws. Rate reset to somewhere in that 2.5% range and it's tied to the 12-month LIBOR or something like that. I reviewed their loan docs and there is a ceiling and a floor on the rate in addition to a cap on how much the rate can be raised or lowered each time it resets (each 12 months). From what I recall, it can jump a pretty significant amount, but perhaps your loan is different. I don't see rates going up quickly anytime soon, but who knows.

Since you only have one loan on the rental property, and the payment is pretty low if it were me I'd move into the rental and see what happens. The only thing you'd have to potentially worry about is taxes if you eventually did decide to walk, but the tax hit alone doesn't (for me at least) warrant walking now to avoid the tax hit. Hopefully some of that makes sense!

[Ready2Run]

When I pulled out the newspaper (Contra Costa Times) yesterday there were two entire sections devoted to legal notices, mainly Notice of Sales. Wow. I've never seen that before. Sad.....

Unfortunately, I've seen that at least twice before in the Times. It's definitely sad to see but it was also empowering for my wife to see. It showed her that we are not alone in this mess and made it easier for her to accept.