Walking Away in Arizona - My Journey

[cactus77727]

OK so here I go. I will be using this message thread to document my experience. As described in my other posts, I have decided to walk away. As of this post, I am still unemployed since May 2008. I have a little other income but not nearly enough. So after careful consideration I have to let the house go, and live in it until they foreclose.

To review my situation:
Location: Arizona
Loans: 80/20, both purchase money loans
1st: Litton Loan Servicing, $207,000
2nd: Specialized Loan Servicing, $52,000
Home value: approx $200,000


10/1/2008
First payments are missed.


10/17/2008
I received my first phone call from the lenders. At 7:30pm the 2nd lender called. The lady on the phone was very polite. She asked if I knew that the payment due on 10/1/2008 was not received.
She offered to do a check by phone or if I could pay by end of month. I told her I don’t know. She asked if I was late on the other loan. I said yes. She gave me some info on local housing assistance organizations. I mentioned that I do have a lead for employment, and that I’ll be calling as soon as I hear anything. We spoke for about 15 minutes. She said that my account is on ‘auto dialer’ until the late payment is made, and they will call every week.



I will update my story as things happen.

[MRC123]

This month is our first missed payment also. We are working with NACA on a modification.

We have not received any calls from Wells Fargo, at least not yet.

[cactus77727]

MY WALK AWAY UPDATES:

10/25/2008
I received the monthly statement from Litton the 1st mortgage. The statement was different from the normal one, and was signed by "Default Administration Department." It reads " Your loan is past due... There was a late fee of about $60.00. "please call and pay immediately... etc etc..."

10/26/2008
Litton, the 1st mortgage called. I missed the call, and they left a message. Should I bother to call them back?


The 2nd mortgage Specialized has not called back yet. Ten days ago, they said they would be calling every week.

[cactus77727]

10/27/2008
Hey the 2nd Specialized called me today. I was afraid they forgot about me. Just kidding.
Today, the call was much shorter. The guy on the phone had the notes from first call. He asked if i could do a post dated check for Oct 31. I told him I couldn't make any promises. He warned me that if it wasn't received by the 31st, they would have to report me 30 days late on my credit report. He asked how my job search was going, and to call as soon as i get work. I wanted to tell him, don't hold your breath, but I didn't. He said, there are some 'programs' to help me catch up.

Interesting thing when they call me... it shows "Unavailable" on my caller ID, then when I say "Hello", there is a long pause as the computer connects me to a person. So, now I'll know it's them when it does this, and don't feel like talking to them.

[cactus77727]

UPDATE

10/29/2008
The 1st mortgage Litton called. We went throught the same question/answer loop again.
Litton: Do you know you are late on your Oct 1st payment?
Me: Yes
Litton: Can you send the money by the end of the month?
Me: I don't know. I'm trying to find a job and I will catch up as soon as I can.

Other observation: it seems the job market in Phoenix, AZ is only getting worse every month. I've been looking since May 2008. I can't even get hourly work yet. I've applied to Costco, and other retailers, but no luck.

[cactus77727]

UPDATE 11/3/2008

The 2nd mortgage Specialized called me today. The representative asked if i could make Oct and Nov payments by the 15th. I told him I didn't know, and that I'm still looking for a job. I asked him if they had any special programs to help me? He said I wouldn't qualify unless I was employed. He said they'd call me back on Nov 10th.


So far the 2nd mortgage has called me a lot more than the 1st.

[cactus77727]

UPDATE
11/5/2008

Litton the first mortgage called. It was a very short call. They asked if I could pay the 2 months due by phone check. I said no, I am unable to. He then asked why. I said I am looking for a job. He asked if I was occupying the property. I said yes. He then very abruptly said, OK thank you goodbye.

My thoughts:
From reading other peoples stories, I think it is a key point when they ask if you are occupying the house. If the answer is no, then I have heard where they are immediately changing the locks on the home. I plan on staying as long as I can.

I think for me, they are probably going to send a notice of defaut sooner than later because they know I don't have much income. I didn't expect it with only one payment late. I'm 2 payments late now, I have a feeling it's more liekly they will file the notice of default.

[dealingwithHomeEq]

You owe $260,000 on a home that's probably worth less than $200,000 and dropping by the minute. Litton doesn't want your home and the second is SOL. If I were you, and I wanted to stay, I'd find out what homes in the neighborhood are renting for, then I'd send Litton a certified letter telling them that this is all you can afford, but you will pay it every month on the condition that your payments will immediately cease if you see that they have filed a notice of sale with the recorder's office. Tell them you will check the docket every day. Tell them if you see that they have filed a notice of sale, you will live in the home rent-free for 90 days and then evaluate whether you will file for chapter 13 bankruptcy at that time. That could easily drag it out for another three months even if you simply file and the case is dismissed.

If you live in Maricopa county: Recorded Document Search

If you live in Pima county:

Pima County Recorder's Office - Public Research

In the current environment, it will be difficult for them to foreclose if they see they are getting at least what they could otherwise rent the place out for. If you pay nothing, they will have no choice but to foreclose. These banks are also buying time because they are hoping that the government will step in and bail them out. If you send a monthly payment--albeit reduced--it will give them an excuse not to foreclose until they can see how the next administration will deal with all the foreclosures.

[The Professor]

dealingwithHomeEq, great advice. Only other comment I'd make is to make sure that once the homeowner's insurance reaches its anniversary date, get a renter's policy because the lender can be expected to purchase a policy that will only cover their interest in the property, and be aware of the responsibility to pay any HOA dues (if any exist).

Daniel

[dealingwithHomeEq]

Very good idea.

[knabrusc]

Cactus77727~

You are right that as soon as you say you are not in the house they will change the locks. It took ASC about 4 days to come out and change them once we said we were not in the house. We just moved from Mesa to Chicago and since we are renting in Chicago, our Insurance company cancelled the policy once we had to get renter's insurance and any credit is going to the mortgage company since we paid it through Escrow...doubt we will see the credit.

Not sure if this is helpful for you but I used to work at University of Phoenix Online and I know they are always hiring...it doesn't start at the greatest pay and as in any corporate environment there can be drama but at least it would be something for some income for you and I know they have great insurance...I have tons of medical issues so insurance is always key for me...LOL!
I haven't checked my credit score yet...we have now missed Sept, Oct and Nov. I did apply for a Kohl's charge card the other day and was approved with a high limit, so apparently it's not too bad yet...LOL! I wish you luck and hopefully things work out for you.

[cactus77727]

My Journey - job search addendum

I really haven't posted much about my job search. I guess I could share my experience, as my job situation is main reason why I am walking away. Emotionally it's difficult to write about it.

My main experience is in information technology, web development, and database development.

Not sure if this is helpful for you but I used to work at University of Phoenix Online and I know they are always hiring...

knabrusc: Thank you for thinking of me! That's funny you mention University of Phoenix. My brother-in-law has a friend who works there. He tipped me off to an internal email request for external academic counselors. I replied to the email the same afternoon I heard about it. I got a reply saying they'd be calling me the next day for interview. I didn't get a call for most of the day, so I called them near the end of the day. I was told that they had already selected enough interview candidates. I was disappointed.

But not as heart broken as I was earlier this year. I interviewed for a very good IT job for over TWO MONTHS in Aug/Sept!!! There were 4 phone interviews over an hour each. Then I had three in-person interviews. The first was over three hours, and two more over two hours each. They even introduced me to coworkers on the team. Then a few days later, I got an email saying they were not going to hire me. They said they didn't think I'd fit in to the corporate culture, given I had been a independent contractor for so long. Technically they said I had very good qualifications. Two months!!! I literally cried like a baby when I got the email.

I have a cousin that works for Federal Express, and she was trying to get me a dock job at the airport. But they filled it internally before I could apply.

Another thing I considered was getting a CDL and becoming a truck driver. But after doing a lot of research online, that industry is suffering terribly too.

As I've said before, I've been job hunting since May 2008. I've watched the market (Phoenix, AZ) go from bad to worse, to abysmal. I am even trying to get fast food jobs, retail, anything! I have a college degree, and a good resume. I used to make $67K per year. Right now I'm pulling in about $700 per month doing web site design. Some relatives have been helping me too. Just today, I was practically begging for a fast food manager to give me a chance. No go. I've been out of work for so long now, it's getting to me mentally.

[knabrusc]

Cactus77727~
Not sure if you are comfortable or not, but if you want, send me your resume and I will forward it on to my mom at Wells Fargo (maybe they need IT people??) and on to my friends at UoP (I know a couple IT guys, maybe they need more) It's hard to get on there if you don't start in enrollment, academics or finance, but it would be worth a shot. So if you want I would be more than happy to forward your resume over and see if something comes up.

Let me know

[cactus77727]

Thank you knabrusc. I would be scared to reveal my identity here. I have already sent my resume to University of Phoenix again. There was a new listing for a web developer position.

[cactus77727]

UPDATE
11/13/2008

The 2nd mortgage called again for my weekly checkup. Short call again. I just told her my job search is ongoing. This person wished me luck. She was nice.

[cactus77727]

UPDATE
11/13/2008

Today I received a letter from the 1st mortgage Litton. In it they state:

"Your loan is past due for the 10/1/2008 and 11/1/2008 payments. It is imperative that you contact our office immediately... If these payments are not made by the end of the month, we may accelerate your loan and begin the foreclosure process. You could lose your home."

The letter goes on about how to make payment etc...

"If there are valid circumstances beyond your control that are preventing you from making your payment, there may be options available to you."

Sincerely,
Default Administration Department


My first thought is the old line comedians used to say "take my wife, please!" except I'm saying, "take my house, please!"

Seriously though, I'm wondering if I should call them? I think I will, just to tell them I haven't gotten a job yet. I have a feeling I'll get the notice of default in December. Unless I get a job, not sure what I can tell them to delay it.

[The Professor]

My assumption is your original goal remains the same. that is, "So after careful consideration I have to let the house go, and live in it until they foreclose."

What remains in your best interests is to delay the initiation of the foreclosure process for as long as possible. Probably the best approach is to communicate with the lender, indicate you don't want to lose the house, have some positive potential job opportunities on the horizon and should be hearing back soon about whether you will get a job but it won't start until right after the first of the year, but you are also researching the idea of selling the home (a short sale) if things don't work out as to the job you are seeking.

All of that sounds like you've adopted a realistic approach to the situation and my guess is the lender will hold up taking action as they join you in keeping fingers crossed. Of course, chances of things working out are slim, but you'd be surprised how long a lender in this situation will delay the initiation of a foreclosure as long as there is a glimmer of hope.....

Daniel

[cactus77727]

Thank you Professor. That's exactly the plan, and yes I am still planning to walk away, living in the home until foreclosure. The only thing that would change that is either a high enough paying job, or winning the Powerball before they foreclose.

UPDATE
11/14/2008
The 1st mortgage Litton called today first thing this morning. Went through standard questions: They asked if I could pay up. I said no, I am unable to. I said I am still looking for a job. He asked if I was occupying the property. I said yes.
I told them to be patient, and asked him about the letter. He mentioned "once they send notice of default, I'd have 45 days after that date before foreclosure."

I think he is refferring to AZ law where they have to notify me within 5 days of notice of default/notice of trusstee sale, then must publish notice of trustee sale for 4 weeks before the sale date.

"the notice must appear in a newspaper in the county where the property is located once a week for four (4) consecutive weeks, with the last notice being published not less than ten (10) days prior to the date of the sale."

Arizona Foreclosure Law

So at this point still waiting for the notice of default.

[The Professor]

I was going to respond in a humorous manner, expressing a belief that the money spent for postage in sending out resumes might be better spent buying lottery tickets. Reading today's news via the Internet, I am getting more and more cynical about whether the "powers that be" have the slightest idea when it comes to managing this challenging situation. My guess is in ten (10) years as our economy continues through the recovery process we will have learned a great deal about what doesn't work. Problem is the tuition associated with this education will be enormously expensive (both in terms of dollars and emotions).

Daniel

[cactus77727]

It is funny, in a gallows humor sort of way. The whole situation is just so incredible. And you are correct, I believe the mathmatical odds of finding a job, are quickly dwindling to the infinitesimal levels of winning the lottery jackpot.

I had been playing one ticket each week. And now that I think of it, I've won $3 twice since May.
So there you go: jobs:0 lottery:2.
I'll keeping sending out the resumes, and playing a Powerball ticket, and we'll see what hits first.

[cactus77727]

UPDATE
11/18/2008

The 2nd mortgage called. Same round of questioning. Expect this time they warned if I didn’t pay by the end of the month, they’d send my account to preforclosure. I told them the same thing I have been. No job, and I’ll catch up as soon as I get income. I think I might have made a mistake by telling them that I was having difficulty finding a job.

Important: Do not believe anything these loan servicers tell you . They will NOT do what they say they will do, as you will see in my next post. They didn’t wait until the end of the month.

[cactus77727]

UPDATE
11/20/2008

RECEIVED NOTICE OF DEFAULT

Today the postman knocked on the door to deliver certified mail. I knew what was coming. The 2nd mortgage Specialized Loan Servicing has sent a letter for notice of default.

Here are parts of the letter:
11/18/2008
Notice of Default and Notice of Intent to Foreclose
The Note on the above referenced loan is now in default as a result of your failure to pay the 10/1/2008 payment and the payments due each month thereafter, as provided for in said Note… You have thirty three (33) days from the date of this letter to cure the default. We urge you to immediately contact our Customer Assistance Department…

Failure to pay the total amount due under the terms and conditions of your Deed of Trust/Mortgage by 12/21/2008 may result in acceleration of the entire balance outstanding under the Note including, but not limited to, the principle, interest and all other outstanding charges and costs, and commencement of foreclosure of the Trust Deed/Mortgage which is security for your Note. Please be advised that any extension of time or forbearance in the exercising of any right or remedy as provided for in the Deed of Trust/Mortgage shall not constitute a waiver of or preclude the exercising of any right or remedy.

You have the right to reinstate the Note after acceleration as provided by law and you have the right to bring court action to assert the nonexistence of default or any other defense you have to acceleration and sale.

If your loan is not brought current, inspections of your property will be made and you will be assessed fees for that purpose as permitted under state law. Additionally, if your property is found to be vacant and unsecured, the mortgage holder will have it secured and will charge you for the cost of securing. You may also be liable for reasonable attorney fees and costs incurred in connection with any proceedings on the Note and trust Deed and such other costs as may be allowed by law. In addition, you may be liable for any deficiency that may be established as a result of the foreclosure action unless precluded by a bankruptcy discharge.


I checked the county recorders online records search, and the notice is not recorded. I wasn’t sure what to make of that. I thought: shouldn’t there be a “NOTICE OF TRUSTEES SALE” recorded? I did a complete country records search under my name and there is nothing new recorded.

A) From my research on loansafe, I thought that the second mortgage would be less likely to foreclose, given that they will not get anything since the house is barely worth the amount of the first mortgage. I only made it to 2 months late before the second mortgage sent notice of default.

B) Where does the 33 days come from? I don’t see anything in the AZ laws about it. They didn’t indicate a sale date, they just say pay by 12/21/2008.

So I called Specialized to find out about the 12/21/2008 date. I asked if that was the date I had to move out. He said no, that’s the date it could go into foreclosure. I asked him how long I’d have to move out after that, and he said they didn’t know. He said, if it came to that, I’d get a notice at that point. He would not give me a time frame. I asked if there are any guidelines or laws that outline a time frame, and he said there weren’t. (Lies, filthy lies).

So at this point I was a little confused. I thought the notice of default is the beginning of foreclosure, and that there is supposed to be a sale date set by it. Is part of the heading of the letter “Notice of Intent to Foreclose” the clue? The keyword being: Intent. As I understand Arizona law, until the NOTICE OF TRUSTEE SALE is recorded with the county, then I’m not in foreclosure. At first I thought that they are ‘representing’ that the foreclosure has started to scare me into coughing up the cash. But that’s not so, it’s just what’s required in my loan/deed documents.

I read my Deed of Trust for this Note(loan). In it, under the paragraph “Acceleration; Remedies” it states …upon Borrowers breach… of this Deed of Trust, the Lender prior to acceleration shall give notice to Borrower… specifying (1) the breach; (2) the action required to cure such breach; (3) a date not less than 10 days from the date the notice is mailed to Borrower, by which such breach must be cured; and (4) that failure to cure such breach on or before the date specified in the notice may result in acceleration of the sums secured by this Deed of Trust and sale of the Property.

It goes on to say that if I don’t cure the breach by the date in the letter (in my case 12/21/2008) that: the Lender can declare all sums due and payable… and may invoke the power of sale and any other remedies permitted by law.

So in conclusion, I think the letter dated 11/18/2008 is a notice of default but NOT the notice of trustee sale. It is the notice of breech required in my Deed of Trust document. So if I don’t pay up by 12/21/2008, then they may choose to invoke power of sale, and then record a Notice of Trustee Sale with the county. Oh, and I think they gave me 33 days to cure the breach, instead of the minimum required 10 days. How nice of them.


So now I have until 12/21/2008 and then I’ll be waiting for the Notice of Trustee Sale.

---

Professor: What do you think? If I’m missing anything here, please correct me or offer additional advice. Thanks.

[cactus77727]

UPDATE

11/21/2008

RECEIVED NOTICE OF DEAULT FROM LITTON 1ST MORTGAGE

It turns out the 1st mortgage dated their notice of default (NOD) the day before the 2nd mortgage did. I didn’t receive it by mail until the day after receiving the 2nd mortgage’s NOD.

1st mortgage NOD letter dated: 11/17/2008
2st mortgage NOD letter dated: 11/18/2008

So they must have been communicating with each other. Now that I think of it, on the phone they had asked me if I was late of the other loan and vice versa.

Litton 1st Mortgage NOD excerpts:

Notice of Default and Intent to Accelerate
To cure this default you must pay…
If you have not cured the default within 45 days of this notice, Litton will accelerate the maturity date of the Note and declare all outstanding amounts under the Note immediately due and payable. Your property that is collateral for the Note may then be scheduled for foreclosure in accordance with the terms of the Deed of Trust/Mortgage and applicable state laws.

You have the right to reinstate your loan after acceleration… This notice remains in effect until the default is cured.

Upon acceleration of your Note, Litton will refer the property for foreclosure. The time required for foreclosure in the property state is approximately 120 days. In accordance with the terms of you Note and Deed of Trust/Mortgage and applicable state laws, if Litton prevails in its foreclosure action, you may incur costs of foreclosure, such as title documentation, filing fees for the complaint, service of process, publication, recording of judgment, and other required expenses. You may also incur attorney fees in an amount up to $625.00. The aforementioned foreclosure timeline and the fees and costs associated with a foreclosure action are estimates only and are dependent upon various factors.

[JohninAZ]

any more updates? how's it going?

[cactus77727]

Hi JohninAZ, thanks for asking. Hope you are doing well.


UPDATE 12/6/2008

This week the 2nd mortgage called. Same questions, etc. The only interesting thing was that I was transfered to an "early work out" department. The conclusion was there was nothing either of us could do until i find work. Still no job. They told me that they would not initiate the foreclosure. They would wait until the 1st mortgage forecloses. I get the feeling they know they are going to get jack squat (and Jack left town a few months ago.)

The 2nd really hasn't been very agressive yet. They call every week, but they have been very polite and sympathetic. Maybe because I'm such a sweet guy.

So I am still waiting for Litton the 1st to make their move. The 45 days they claimed in the intent letter will be up on 1/2/2009. I am expecting the notice of trustee sale/foreclosure soon thereafter. And then I've got a minimum of 90 days according AZ laws.

As for me: I have good days and bad days. Overall, I laugh more than I cry. There was a spectacular sunset in Phoenix last night. I stopped and enjoyed it. I have been playing guitar more often. I'm thinking a lot. I spend a lot of time online, and I'm becoming an amatuer economist (my analysis: we're screwed). I enjoy watching incredibly weathly people beg Congress for money, and fantisize about which ones will be in prison soon. I've become a fan of the LHC (Large Hadron Collider). I'm hoping they get it running soon, discover how to do time travel, so i can go back to 2006 and NOT buy my house.