California - Walking away in the SF east bay

[MargaretC]

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.

Thanks jayguy. I pulled out my docs last night and it looks like my interest rate cannot exceed 10.200% and cannot adjust more than 7.500% each year. Wow what a relief. And you are right, we'll just have to play it by ear. I'm hoping we can move in there and live at least 2 years before we can't afford the payment so we don't have to pay capital gains.

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.

That's a good point Ready2Run. I have concern for my kids and how they feel. I try to point out these kinds of things to them too so they can see it's the new "normal" and we don't have to be ashamed.

[MargaretC]

UPDATE

Checked county website today and NOD was filed two days ago, Dec 7. I DID NOT want it to happen this month because we are moving back to our old house that we have been renting out. I don't want to give our tenant notice before Christmas, but I'd like to give her as much notice as possible.

[TomEason]

UPDATE

Checked county website today and NOD was filed two days ago, Dec 7. I DID NOT want it to happen this month because we are moving back to our old house that we have been renting out. I don't want to give our tenant notice before Christmas, but I'd like to give her as much notice as possible.

Hi MargaretC

Thanks for your post. Not sure of your reasons for moving back into a house that's going into FC. If it were me, I keep it rented and keep enjoying the positive cash flow income stream for as long as possible.

I'm probably missing something here.

[MargaretC]

Hi Tom - it's hard to keep it all straight!

We are currently living in one house that is going into foreclosure and will be moving back to our former residence that we have been renting out.

[TomEason]

Hi Tom - it's hard to keep it all straight!

We are currently living in one house that is going into foreclosure and will be moving back to our former residence that we have been renting out.

Thanks for your clarification. Now I get it. You might consider moving to your old house a little later than you had planned. That might accomplish two favorable things for you. 1) You won't need to give your tenant notice until after the holidays and 2) You can enjoy that rental income stream a little longer.

[MargaretC]

I just don't know when later than we planned would be - LOL! I am assuming the minimum 3 mos plus 21 days and I see on foreclosure radar that average time to sale date has gone down quite a bit this year, it's at 168 days now in my zip code.

Oh well...I barely got any sleep last night, I'll formulate a plan when I can think more clearly.

Thanks again!

[MargaretC]

Update

I gave my tenant notice because I knew she wanted as much notice as possible. It was hard to do, she's been a good tenant and was very upset because she has bad credit and is worried about finding another place.

Calls and letters are flying from realtors looking to help us out. (No thanks!)

I see our house is now on foreclosureradar.com and listed as a foreclosure on Zillow, mildly humiliating.

I really would like to band with fellow foreclosurees and protest what has happened, but that movement doesn't seem to be happening. It needs to happen! Our government is supposed to protect us, but instead we got screwed! they bailed out the banks with OUR MONEY and the banks don't help us. What a joke.

[HopingtoFind]

After reading your thread, decided to remove my comment.

[CABOA]

I don't really have anything to protest. I took out a loan, I agreed to pay it back and I'm not doing that, so they are kicking me out. Which they have every right to do.

I have only myself to blame. No one forced me to take out the loan. I made a bad investment and now I have to deal with the consequences. I listened to the advice of some people I trusted at the time (not the bank), because of that advice I thought I was doing the right thing at the time. In hindsight it was stupid. But those people didn't have a gun to my head, I hold myself responsible.

Your case may be different.

[bubberrand]

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.

If the loan is recourse, the lender would legally be able to sue to collect the difference or chase you for it with CA's. Not sure if this is happening in Cali, but I don't see too many people worried about it. I just don't see the lenders giving up on owed money unless it is settled in a settlement or extinguished.

[MargaretC]

I don't really have anything to protest. I took out a loan, I agreed to pay it back and I'm not doing that, so they are kicking me out. Which they have every right to do.

I have only myself to blame. No one forced me to take out the loan. I made a bad investment and now I have to deal with the consequences. I listened to the advice of some people I trusted at the time (not the bank), because of that advice I thought I was doing the right thing at the time. In hindsight it was stupid. But those people didn't have a gun to my head, I hold myself responsible.

Your case may be different.

When you took your loan out were you aware of the extent that BAD loans were being given out? I wasn't. I relied on the expertise of my mortgage broker and took his advice.

I do fault myself somewhat, but not 100%. What I fault myself for is not having a clear plan and assuming that something in the future would happen (though again based on advice from broker). He said we would be able to refinance out of adjustable in 5 years. Well, 5 years later, that was impossible. We took a risk based on a future unknown, which was unwise.

Doesn't it bother you that our own tax dollars have been used to bail out the very banks that won't give a lot of us a hand?

[MargaretC]

I don't really have anything to protest. I took out a loan, I agreed to pay it back and I'm not doing that, so they are kicking me out. Which they have every right to do.

I have only myself to blame. No one forced me to take out the loan. I made a bad investment and now I have to deal with the consequences. I listened to the advice of some people I trusted at the time (not the bank), because of that advice I thought I was doing the right thing at the time. In hindsight it was stupid. But those people didn't have a gun to my head, I hold myself responsible.

Your case may be different.

When you took your loan out were you aware of the extent that BAD loans were being given out? I wasn't. I relied on the expertise of my mortgage broker and took his advice.

I do fault myself somewhat, but not 100%. What I fault myself for is not having a clear plan and assuming that something in the future would happen (though again based on advice from broker). He said we would be able to refinance out of adjustable in 5 years. Well, 5 years later, that was impossible. We took a risk based on a future unknown, which was unwise.

Doesn't it bother you that our own tax dollars have been used to bail out the very banks that won't give a lot of us a hand?

[CABOA]

When you took your loan out were you aware of the extent that BAD loans were being given out? I wasn't. I relied on the expertise of my mortgage broker and took his advice.

Doesn't it bother you that our own tax dollars have been used to bail out the very banks that won't give a lot of us a hand?

No, I wasn't aware of all the bad loans being issued. Had I known, I may have decided not to take out a loan of my own, so you have a point there. Yes it bothers me they are being bailed out, not surprising though, money runs the world. Those with it make all the rules to help themselves and their friends.

[MargaretC]

Hi CABOA - Didn't mean to double post on you!

UPDATE

We are about 65 days out from the NOD, so expecting Notice of Sale early next month, though I know it could be longer...

Tenants will be moving out early next month as well so we will have time to prep the house for moving back in. I've probably said this before but the hardest thing about moving will be leaving our friends across the street. My son has a good buddy and they run back and forth between houses and it's a good thing. I hurt for this loss for him. other than that everyone is happy to move. Unlike others I do not love the house we are leaving. It needs a lot of work still.

[TomEason]

If the loan is recourse, the lender would legally be able to sue to collect the difference or chase you for it with CA's. Not sure if this is happening in Cali, but I don't see too many people worried about it. I just don't see the lenders giving up on owed money unless it is settled in a settlement or extinguished.

bubberrand

Thanks for your posting your opinion. As your post was made six weeks ago, this may not be timely. Margaret is in CA and has only one loan. That lender has no recourse after FCing, i.e. there can be no deficiency lawsuit.

[Anouk]

Margaret - did you ever hear anything from your soon-to-be SOJ 2nd after that 30% offer? On the one hand, I'm surprised you started receiving offers prior to foreclosure, but I guess they saw the writing on the wall. Once the FC finally occurs, that's what starts the 4 year statute of limitations ticking. I'm hoping for you that you either get a nice reasonable 6-10% settlement offer, or that you just don't hear from them at all until the 1099-C comes in the mail. That's what I'm hoping will happen in our case, too.

I'm freaking out a bit trying to make sure there is nothing in our names for the 2nd to find if it chooses to seach to see if filing a deficiency suit against us would be worth their while - but in your case you have this other house in your name. But that house is underwater, too, so doesn't exactly represent an attractive asset to come after lol.

My in-laws are supposedly willing to buy a place for us to rent-to-own from them, but that's not going smoothly. They want a "deal" which I suspect in their minds has more to do with how far down from the listing price they can get the seller to budge instead of what the home is objectively "worth." It also doesn't help that they live in the Bay Area while we are in Sacramento, and while Sacramento is hard-hit overall, the area we identified a house in is stable and *not* a buyer's market as it's one of the best school districts in the region. But school district, proximity to nature, number of same-aged kids on the cul de sac, those are all intangibles to my in-laws, while to me they make this not just "any house," and I'm just sick over the fact that today's negotiations were a bust. I can't offer on a house until I'm attached to it, and once I'm attached I find it really hard to just walk away.

Plus my oldest is turning 4 in April, he'll be starting Kindergarten in Fall of 2013, and I predict our FC will occur September 2012 from foreclosureradar's numbers (first missed payment 1/12). I don't want to be in the position of scrambling to find a rental in 9/12 only to find ourselves having to move again (assuming 1 year lease if we go with the renting from strangers option if in-laws don't come through) right at the time he would start school. Ugh.

[MargaretC]

Hi Anouk -

Here's what happened so far with settlement offers:

5/26/11 Rec'd offer of 30%

10/17/11 - Rec'd offer of $19493.46

12/21/12 - Rec'd offer of $17056.78 (17.5%)

Each of these was from a different company and each time they first sent a letter asking for the goal amount owed.

I can't wait to see what offer I get after the sale!

It would be challenging being at the mercy of your in-laws purchase decisions, but it could be a good thing too I suppose. Are you willing to let that plan go if you can't align both of your goals?

I hope things work out for you and your family. it's such a special time when the kids are so young. it seems like yesterday that my oldest was four, now he's 17 1/2!

[MargaretC]

Update

Yesterday (or today) Was day 90 post-NOD. No sale date yet!

Our tenant moved out yesterday and my family was so excited to check out our future home! it was a let down because fantasy is always better than reality. There is a lot of work to do, some we must do so I can stand to live there. Mostly painting and probably a partial bath remodel. We now owe 50,000 more on a house that has not been kept up too well for the past 7.5 years. It's depressing. Hopefully the work won't be too much.

Also received another settlement offer today for approx. $14,000. I'm not going to take it but fear getting sued down the road and having to pay more. Will hash that out on Sold Out Junior Loans thread.

[freedomwon]

Hi Margaret - Here's a little tip on the expenses you will incur on the home you'll be moving back into. If you don't own a Home Depot Credit Card, I encourage you to get one. Normally, I don't advise department store credit cards, but this in an exception & here's why. Home Depot will offer you interest free financing on all purchases of $299 or more for six months.

So, here's what you do. Open their charge card (if you don't already have one) then buy yourself Home Depot Gift cards for any amounts over $299. Be sure to charge the gift cards to your Home Depot credit card. You will find them up near the registers inside Home Depot. You are now using their money, interest free for six months. Now, to sweeten the deal, Home Depot accepts Lowe's coupons. Lowes has 10% off coupons (you can even buy them on ebay).

The beauty is you will make some big purchases such as paint, but for those little items you need here & there, you can run to home depot & make your real small purchases & pay with the "gift card" you bought yourself & you're enjoying the "interest free" money.

The caveat to this is since it's 6 months interest free, do not wait until 6 months + 1 day or your account will incur all the back interest.

[TomEason]

freedomwon

I like the way you think; good ideas!

[MargaretC]

Great info freedomwon. Thank you!!!

On another note - I called Recontrust today and we now DO have a sale date, April 2! Also came home to note posted on the door. That was fast! Home Depot here I come!

[MargaretC]

*UPDATE*

I sent a CMRRR letter about a week and a half ago to BofA requesting postponement of sale, basically a freedomwon letter with some facts changed to match my situation better. (Thank you freedomwon!)

Today I got a response from them acknowledging receipt of letter. It said "We are in the process of obtaining the documentation and information to address your questions. We appreciate your patience while we research your request."

LOL! I'll be very patient! I hope they postpone the sale date while they're looking. I call every day but so far no luck. I've only got 5 business days to go - yikes!

[freedomwon]

MargaretC - I'm sending positive thoughts your way in hopes the letter gets you a postponement!

[MargaretC]

No such luck yet and there's only one day left.

Some guy saying he's an investor just knocked on my door asking me about the house and our plans. Being caught off guard, I probably said too much. I asked him if he wanted to buy the house and he said yes.

Now I'm worried he'll buy house at auction, we won't get cash for keys and will get booted out quick. Is there no cash for keys if investor buys house?

[TomEason]

Hi Margaret

Hopefully your sale will be postponed and you won't need this C4K info.

Reference C4K, any owner wants to gain legal possession without having to evict the occupant. Typically the new owner, whether the bank or an investor, will offer an incentive to the occupant to voluntarily vacate. The occupant who knows and stands up for their rights, will usually get a cash incentive because it's less expensive than a contested eviction.

[MargaretC]

Thanks Tom! I hope you are doing well.

We have not made much progress preparing the house we are moving into and the worst case scenario of moving by 10 days after the sale date is starting to look quite possible...

[Pejutah]

Thanks Tom! I hope you are doing well.

We have not made much progress preparing the house we are moving into and the worst case scenario of moving by 10 days after the sale date is starting to look quite possible...

Jeez, Margaret,
Ten days? Gosh...I really hope that isn't true for you and your family.
I loath this whole process, but the uncertainty is surely cancer-making.
Anyway....I hope the letter you wrote DOES get some attention...

[MargaretC]

Thanks Pejutah. Ten days after sale date is the recommended time to vacate per youwalkaway. Hopefully we'll get 30 days. I'm guessing that's more likely if house goes back to bank.

[TomEason]

Margaret

Everything is negotiable. A new owner will know that a contested eviction would likely take 60 days or so. An occupant can and should negotiate a cash $$ amount, and voluntary vacate date that will make them happy.

[freedomwon]

Hi Margaret - Have you checked the https://www.lpsasap.com/ site since 5pm tonight? If you see it's still scheduled for tomorrow, fax or re-fax your letter tonight to the following numbers:

Hope department 1.800.658.0395 (fax number)
Home Retention department 1.716.635.7255 (fax number)
Advocacy Dept 1.866.261.6472 (fax number)
MHA Escalations Unit 1.866.382.0489 (fax number)
Homeownership Retention Department 714-792-5227 (fax number) new division in Brea California

You may want to put in big bold letters across the top of your letter the following:

Cancel 3/30/12 Sale Date
FAILURE TO DO SO IS IN “CONTEMPT OF COURT” of the OCC Consent Orders.

[MargaretC]

Thank you! I'm not on the Lps site, but I'm on Recontrust. the sale date is Monday so I'll fax tomorrow and Monday!

[freedomwon]

You're Welcome. I Know how tough it is with the "not knowing". The good news for you is you will have a place to go. In that regard, you are very fortunate.

[MargaretC]

Whoo hoo! Happy Friday! Sale has been postponed until June!!!.

I am so relieved and happy. And I'd like to think it was freedomwon's letter that did the trick! (BTW, I only sent it to BofA.)

Thank you all for your support!!!

[underwater_vallejo]

Whoo hoo! Happy Friday! Sale has been postponed until June!!!.

Congratulations! That's great news!

It could also be that BofA is struggling financially. They have to actually record the loss when the foreclosure happens. Until that point, they can continue to show your home in their books at the value of the mortgage. They push the sale until June to see how the 2nd quarter shapes up. With a bit of luck another European country will default on their debt and BofA will have to cough up some green on the Credit Default Swaps they sold... Then maybe your sale will get postponed to Q3.

No matter what the reason is, congrats on getting to stay a few more months.

[freedomwon]

MargaretC - That is absolutely FANTASTIC! Now, let me help you spend some $ getting the other house ready. Home Depot is having a "Black Friday Sale" & it goes all weekend long. Any purchases made today on the home depot credit card will provide you with 12 months of interest free financing. So, of course, I bought a gift card for a very large denomination which flagged my account for the employee to call credit services. After 20 minutes of proving I am who I say I am with various forms of ID & security questions from credit services, I was granted the gift card which I charged to my home depot credit card. I was afraid they might be pulling my credit report on the other end of the phone.

Then, I bought stuff on sale which included a new lawn mower, bedding plants, potting soil & some plumbing stuff. I was sure to use my gift card that I just bought a few minutes earlier + a 10 percent off Lowes coupon (since they take competitors coupons).

So make your list, check it twice & get yourself down to Home Depot so you can start getting the other house ready!!!!

Oh, and don't forget to buy a lottery ticket in the next few hours. It's up to 640 million! LOL

[MargaretC]

LOL! I missed the lottery but I'll work on Home Depot....if I find the time amongst the MANY sporting events my kids are involved in this weekend!

It could also be that BofA is struggling financially. They have to actually record the loss when the foreclosure happens. Until that point, they can continue to show your home in their books at the value of the mortgage. They push the sale until June to see how the 2nd quarter shapes up. With a bit of luck another European country will default on their debt and BofA will have to cough up some green on the Credit Default Swaps they sold... Then maybe your sale will get postponed to Q3.

That's interesting..... It did look like a lot of trustee sales got postponed when I checked Recontrust this afternoon (and confirmed that my sale was as well).

Thanks freedomwon and underwater_vallejo.

[Pejutah]

Margaret that is terrific news! I'm happy you've gotten things put off a while longer. Gosh, that'll make it all a bit less stressful.

Underwater...I'm hopeful you are correct. I want bofa to stay outta my yard for a while longer.

[MargaretC]

Trying to make the best of things, we decided to build an extra bedroom in garage of house we are moving to so each kid could have their own room..... someone called the city and reported us! So now we have to dismantle. I'm so disappointed and mad. I'm mad at the busy body who reported us. What do they care? Just mean spirited.

I'm mad that I'm paying taxes so some city official can tell me what to do with my property. Makes me feel like I REALLY wish we weren't moving. We have such a nice neighborhood, now we're moving somewhere hostile. It does't feel good there.

[freedomwon]

MargaretC - I'm sorry that happened to you. Sounds like some "uptight" neighbor with nothing better to do. Something like that happened to us as renters. After living in a house for over 6 years, the storage shed that had been there since day 1 got reported to the county. My husband had to tear it down. It was a little beach house that had no garage & left him with basically no where to store his tools & such. Long story short, a neighbor ended up being a thief & was taking things from our yard. This was back when we were quite young & barely had 2 nickles to rub together. So I know how you must be feeling.

[TomEason]

MargaretC

Thanks for your post. I'm not at all surprised. It almost always is a neighbor who calls the building department and complains that unpermitted work is being done.

That's how it is in almost every neighborhood.