I've been lurking on this website for a few weeks and decided it's time to post my own thread. Thanks so much to everyone for sharing their experiences. It has been very helpful and this website is a great source of support.
A little background - we purchased our Minnepolis suburb home in 2004 for $192k as a starter home for my wife and I with a plan to move in a few years as we start a family. Fast forward to 2012 and we're still there with a mortgage balance of $183k (we've refi'ed 2x to lower the interest rate and never taken any money out and there is no second mortgage) and the house is now worth about $130k on a good day even after many improvements (new kitchen cabinets, new furnace, etc.). My wife has been wanting to move to a bigger house for several years and I've been dealing with the reality for the past couple of years that the value of our home will never recover to the point we can sell it for what we owe on it. After serious consideration over the past year and after much convincing of my wife we finally decided to go forward with a buy and bail. This would allow us to get out of our dumpy neighborhood (it was much nicer 8 years ago) and into a house that is big enough for us as we now have a 3 year old son in our family as well as a dog.
We just finished the buy portion of our buy and bail which I understand is the most difficult part. We are in our new home and are loving it! We found a house that is just right in a very nice neighborhood and the mortgage payment is not much more than it was on our old house. Now we are beginning the portion of the buy and bail I have been dreading. Our mortgage payment on the old house was due July 1 to Wells Fargo and we will be officially late on the 16th of this month. So I'm expecting to receive lots of calls and some letters at that point. My plan is to ignore them so WF does not get the impression I want to do any kind of modification or anything to save my home. I want it to get foreclosed asap.
I should also mention we did meet with an attorney to discuss our situation and a possible short sale. He said we wouldn't have a chance of getting a SS accepted as we do not have a hardship (fortunately). He thinks we will be likely to be among the 98% of homes that are foreclosed by advertisement and therefore not have any deficiency judgment. I'm keeping my fingers crossed that this is the case!
I have a couple of concerns that maybe someone else has dealt with or has some info on. Our new mortgage is also with Wells Fargo which really worries me. I'm nervous that they may try to take our payment on the new mortgage and apply it to the old mortgage. Maybe I'm just a worrier... Does anyone have any experience with a buy and bail and Wells (or the same bank) holding the old and new mortgage? The attorney mentioned that each mortgage probably has a different set of investors in the mortgage and that this would be extremely unlikely to happen.
I'm also a little nervous about a possible foreclosure by action where WF can pursue a deficiency judgment. This is because I did have our down payment money in our WF bank account for a couple weeks (about $14k plus another $5k of other money so $19k total). I've since xferred all money out of WF to another bank but is this enough money for WF to think that we have money and make it more likely to pursue a deficiency judgment against us? We really do not have a lot of money as that money was from a 401k loan and most has been spent but WF saw it in our account. Sometimes I feel like my mind wanders to the worst possible outcome with our situation and it really can be stressful. (To those people who think strategic defaulters are getting away with something I would like them to walk in our shoes for a few weeks with the stress of the credit hit and all of those little worries that run through a person's mind during this process. It's not a small price to pay.)
That's pretty much it. If anyone has any advice or experiences to share that may help it would be very much appreciated. Thanks!