What are your plans after foreclosure?

[spj3210]

Have you determined how long it will be before you can buy another home? Will you rent for a while - if so how long?

If you have a family with children, how did this impact your decision on foreclosure?

We feel like foreclosure may be in our future and I'm just curious what everyone else has decided to do after leaving your current home. We have young children and I want them to continue leading a normal life and feel secure. How long will we have to rent, will be be able to get approved to rent, then rent an apartment, rent a house, rent-to-own a house, etc. etc., how long until we can get a mortgage with a decent rate, these are all questions in my mind right now.

It is my understanding that you can't "buy and bail" anymore (get new mortgage then let your old house foreclose).

Appreciate any thoughts. Thanks!

[Lisa in MN]

Good Morning,
I have a couple of thoughts for ya. We are at a point where we are just going to allow the bank to forclose if they cannot give us any meaningful help.....not crap. We have been struggling for 8 years to hold onto something that in the end is just 4 walls. We have done this mostly for our child to "have her home" but in the end she has had to deal with parents working 2 jobs, being stressed, not getting things she wants- which is worse? I firmly believe your home is what you make it INSIDE those 4 walls, and we can rent a beautiful townhome/condo/house for 1,500 a month LESS than what our home has cost us monthy and have peace of mind, better quality of life , stop grinding my teeth to nubs worrying about who wont get paid so I can scrape together 3,000 for the effing mortgage, not have to fill the car up, stop at the grocery store with a dollar amount because I have literally budgeted to the penny- to pay the effing mortgage. I have no idea what our future holds regarding renting after foreclosure- my guess is we have the income to support the rent we would be looking at- I dont know.
Like many here we have been taken advantage of a very predatory system who spotted our ethics a mile away-to not file BK, and maintain high FICO scores- and exploited them completely- SHAME ON ALL OF THEM.They truly are getting what they deserve. In the end, I am not proud of not paying my mortgage and foreclosing, but I have struggled for too long and have reached the end of the line. At the end of that line, I know I will be ok somehow.
Best Wishes,

Lisa

[DMKBMN]

Lisa, I assume you are familiar with MN foreclosure laws... any insights? Are you working with an attorney?

[Lisa in MN]

Hi DMKBMN,
You can follow my pathetic story under the Stop Foreclosure thread, and I am loosely familiar with MN forclosure laws, and no I am not working with an attorney, although I have sent a QWR to WAMU- this was sent a month ago with no response so far. Today I faxed and emailed a letter to Chase executive offices and got a phone call a few hours later--- from damn WAMU----- a nice woman from Quality Assurance department who said she is now my "liason" in dealing with WAMU- whatever the hell that means. ANyway, she is sending our file to a supervisor in the dept where they do loan mods. She said if I do not hear from someone within 24 hours to call her and she will be personally following up on our case. This same woman also checked on the QWR and said " it is still being worked on"- according to RESPA law they were supposed to respond within 20 business days, but whatever. I still think it's all a crock and I will believe in this when I actually speak to someone who does what they say. I did find out from her that there is no sheriffs sale date scheduled- it was to be Dec 4 then they said Jan4 while in "modification process" now they say it is "on hold" This from the lips of my new "liason" at WAMU. I do know we have 6 months from the sheriffs sale date that is a redemption period to attempt to save the house. The longer they delay the sale, the longer I stay I guess.
So........ let's see what happens!
Here's the letter I emailed and faxed:


Dear Sir,

I am writing to you in an attempt to get directed to the right place regarding our WAMU mortgage. I have been given the run around by WAMU for over a year now.

It is not my intention to bore you with a hard luck story on why we cannot afford our mortgage. What I need assistance with is getting to the right department/person that can help me. Please take the time to read this letter in it's entirety to get the big picture because it really is important.

We purchased our home in 1991.In 2000 we made a bad business investment and trusted a mortgage broker who convinced us to roll all the debt into our house.My husband at that time had a very lucrative contracting job and it didn't seem to have an end in sight, so we agreed in the short term we would be better off protecting the almighty FICO score than file bankruptcy and then refinance. Lots of equity, increasing home values, etc.... Since at that time we had perfect FICO scores and ethically did not believe in bankruptcy, we took this advice which ironically has destroyed our credit, and caused us to be in a worse situation financially. Ironically had we filed bankruptcy it would be over by now. Well, the contract job DID have an end and we were totally unprepared for it. Got behind with a "rolling late" payment, placed into unreasonable forbearance payments ( after 2 "rolling late" payments, HomEQ started foreclosure and made us pay 7,000 in "attorney fees" to which they added to our forebearance. Again, nothing to make things better or tolerable in the long term. October of 2006 when we were just not able to meet the terms any longer, I was able to find a refinance that was less ( a few hundred a month- but I was desperate) but placed us in a loan with terrible terms ( 9.9% interest than adjusts after 2 years with Fremont initially which was sold to Washington Mutual.) Our current mortgage payment is 48% of our take home pay without taxes and insurance, with those it goes up to 56%.

I have done everything the way I was told to do it: Having trouble paying your mortgage? Contact your lender right away before you become delinquent for help----- a JOKE. I called WAMU a year ago when I knew I was losing a contracting second job and was told there was nothing to help me because I was not delinquent. I didn't believe it so I called right back and got a different customer service rep and was given the same answer.Ok, thought my only option was to continue to struggle and not meet my families needs just to pay for a house. In early March of this year, I contacted a local bank who was offering a program called the Program, which was essentially offering short refinances for people with adequate income to afford their home. I was approved fro the program. In March, we made the very difficult decision to stop paying our mortgage. Meager savings had been depleted and all credit exhausted just to meet daily living needs. XYZ Bank attempted to negotiate with WAMU for us. I was told so many different things by WAMU collections people. Actually something different every single time. I was told there was no record of any contact at all by xyz Bank, then told another time there was a history of multiple contacts from our banker. I have sent a QWR request on Ocober 13th to which WAMU has not responded. We are preparing to have a loan document review by an attorney because we believe our loan on 2006 was based on an inflated appraisal of our home by at least $50,000. $330,000 in October 2006 and then in March 2008 the appraisal was $235,000. We thought at the time it was high- our neighbor who sold real estate at the time was shocked and said "No way- maybe $280,000 on the high end" . We questioned the mortgage broker who assured us the appraiser was "the expert" and "knows what she is doing". More misplaced trust.

We have been in our home for almost 18 years but we cannot tolerate it any longer and are prepared to let Chase/WAMU, whatever the company is now have it. I would like you to please direct me to the proper person to discuss Deed in Lieu, Keys for cash, whatever we have to do to be done with this. I cannot take it any more. I need some peace for myself and my family- we have been destroyed financially for 8 years, and while we take responsibility for being ignorant, the banking industry took full advantage of that ignorance as well as exploiting our ethics ( being against bankruptcy) and fierce desire to keep high credit scores. Shame on all of them. Please let me know how to go about the best way of handing over our house. I do not want it any more. The only thing that would make this affordable is interest rate and principle reduction and that won't happen. Working with xyz Bank, Washington Mutual could have had cash and been done with us, but again, reason does not seem to be how they operate.

All the joy has been drained for me from my home, which is now just a house to me. There was to be a Sheriffs sale on Dec 4th then it was extended to Jan 4th while loan modification ( another JOKE) was in process, then when I called collections back ( I missed a call from them) I was told there is no sale date set. I don't get it.

I truly have been appalled by the lack of communication, poor, poor customer service- from downright rude people to misinformation and never being able to speak to the same person, or when you do get a "contact" they hand you off to some other person/department. I can think of no other industry that could operate in this way and survive.

I thank you in advance for your time in reading this and would very much appreciate direction.

Good day,


Lisa

[DMKBMN]

That's a great letter, Lisa. I'm sorry you have gotten to this place after all your effort and hard work trying to communicate with your mortgage company... but I know what you mean about your home that has become "just 4 walls." So frustrating. Hope you and your family hear something POSITIVE very soon. Thank you for sharing your story. Very valuable information.

[KT in CA]

Hi there,
We have an ARM that resets 08/09. Our payment will probably go up from $3400 to about $5000. We can barely afford the $3400 now, and there is no way we can afford the $5000 in August. We have decided to stop payments next month. We are in No Cal where home prices have dropped greatly, and we owe about $130k more than it's worth.
We are standup responsible people. We have jobs and pay all our bills on time. Have never been late once for any payment. It is not an easy decision to do this, and next month when I don't make that payment, it's going to feel really weird and be very scary. But our homelife has been terrible. We all fight all the time and there is so much stress. We have no money. I have to decide between buying a $5 pack of paper towels and an $8 pack. And I have to shop at Walmart and I HATE WALMART! I'm a Target snob.
To us this is a business decision. We are in something bad, and we need to cut our losses and get out. We will accept the consequences, whatever they may be. We may have them come after us for our $55k second. Okay. We may have a tax liability. Okay. But the emotional well-being of my family is much more important than those things. Those things can be worked through.
We are planning on staying in our home probably for 4 months or so. We also have about $40k in cc debt that we will start to pay off, and save some money for a rental. Don't know if we will ever buy another home. I kind of like the idea of being in a rental where we don't have to bother with anything. I have been in touch with a property manager in our area, and she said they are working with families in this situation to get them into rental homes, so don't despair that you won't find anything. Especially if your credit is good otherwise.
Our main priority is our girls and keeping things as stable as possible. I want them to stay in the same schools so I'm inquiring about that. And we have to keep our pets, for our kids sanity and for ours too.
We are looking at it as a new adventure. We are starting over. We made this decision Tuesday night, and I can tell you that I feel lighter for just having made the decision. We can breathe again.

[DMKBMN]

I think you've hit the nail on the head, KT and Lisa... We have spent our adult lives being responsible people. Paying our bills on time, ensuring that our kids have a safe, stable home to live in, being conscientious people, and in my case, trusting that the mortgage industry had integrity. (I know... that sounds pretty wacky now.) But we do reach a point where it HAS to be a business decision. What other choice do we have? We ran through our entire 401K trying to pay for this house through the last two years of unemployment and less income-- an unwise decision, I have learned, and I would warn others who haven't tapped that resource to not do it! I completely understand why coming to that decision has been a good thing for you and your family, KT. It is not a decision that is made lightly or without many sleepless nights... and major husband/wife discussions and family stress. Kudos to you for viewing this new chapter in your life as a new adventure... it's such a healthy perspective! I wish you (and all of us) many blessings.

[cdmosaic]

We are in our 4th month of non-payment and are trying to work with our first, but they are so swamped they never return calls so that I have very little faith in the process and am preparing to move in a few months. I'll be filing bankruptcy next month. As to what comes next, well as my spouse is not on the note mine is the only credit affected. The down size is her salary is 1/3 rd of mine so we may be forced to down size our lifestyle if we can only qualify in a rental what they determine she can afford on one salary. Hopefully we can use our combined income and her credit.

In a way it is a relief allthough also scary and unsettling. My teenage son has no idea what is going on and I'm really hoping we can stall the process until summer and he has graduated. We haven't told him yet as he is currently living in a residential treatment facility and this has been a hectic enough year (he was hospitalized 5 times) so I'm stalling there too, but am going to have to bite that bullet soon. Meanwhile, I see all these vacant homes and can't help but think about all the lives being disrupted so a handful of rich guys could get richer. I like money too, but how much do you really need?!? It is just sickning.

[KT in CA]

I think the thing I'm realizing is that none of us take this decision lightly, and in the end most of us are doing it for our families. Above everything, they come first. We too have gone through our retirement accounts in the past two years to the tune of $50k total. And we have paid for that. But I can sleep at night knowing this is the best thing to do. I have faith we will all come out of this okay.

[Smooth Earl]

KT ... with $40K in credit card debt ... what about a bankruptcy to try to eliminate that, also? I mean, as long as your credit score is on the "downward path", what about REALLY trying to make a fresh start?

[Lisa in MN]

KT-
Your awesome comment:
"We are starting over. We made this decision Tuesday night, and I can tell you that I feel lighter for just having made the decision. We can breathe again."
We felt exactly the same. I think the relief and acceptance comes from it being a deliberate, taking of control.

Lets keep this thread going...... if nothing else it can help us feel better!

Lisa

[Lisa in MN]

Hi Guys,
Interesting and disturbing thing happened to me last night. Our daughter who is 15 has known nothing about all this...I dont think its appropriate to disrupt thier sense of security and figured if we had to move I would let her know. Anyway i picked her up at home to go shopping afterwork and she looked all serious and upset. I asked her what was wrong and she blurted out " Mom are we going to lose our house????" I was shocked and I asked " What makes you think that?" Well, some dumb, inconsiderate a-hole from some predatory something or other I am sure, left a message on our answering machine that he had someone who wanted to make an offer to the bank on our house from the sheriffs sale on Dec 4th ( this was postponed by the way and has not been rescheduled yet) HE LEFT THIS ON AN ANSWERING MACHINE!!! Self centered unthinking prick is my opinion. Think of the damage he has done--- now my daughter thinks I am a liar. What if it was a family where one spouse or another knew nothing about the situation??? This was irresponsible and just wrong.
Just wanted to vent and share

Lisa

[KT in CA]

Smooth Earl -

I don't want to do the bankruptcy route. We have good jobs. We have money. I don't want to eliminate all debt we incurred. We made our bed and now we have to lay in it. We are stopping our payments in January and within that first month I can eliminate $2000 of that debt. Each month we are in this house without paying I can eliminate $2000 of debt, plus put some away for a future rental and stash the rest.

The good thing is that over half of it is zero interest because I did balance transfers. I'm going to pay off the small high interest items first, and then work on the larger ones. Within a year or so everything should be paid because some months I'll be able to pay more. Now, I'm also assuming once my FICO score of 730 tanks (and my husband's too), those 2 zero interest cards don't take back those zero interest offers and move the amounts into a higher interest rate (I wonder if they can do that? - probably). One of them is AMEX and they've already lowered my available balance to just above what I owe. They probably will cancel the card...they did that to someone else on this forum. If they do, I will send them a thank you letter.

Here's the way I look at the credit situation. There are millions of us who are in the same situation. In the fallout of this crisis, the whole credit system, including scoring, is going to have to be revamped. They are doing me a favor if they tell me they've closed my cards. TAKE IT! BECAUSE ONE DAY ALL OF US WILL BE BACK AND OUR SCORES WILL BE BETTER AND WE WILL REMEMBER HOW YOU TREATED US AND THAT YOU HAD NO COMPASSION AND WE WILL TELL YOU TO TAKE A FLYING LEAP! WE PAY CASH NOW!!!

Lisa -

My husband just found out from a good friend that they walked on their payment in January of 2008 after the bank wouldn't budge with them at all. The husband and wife make $200k/yr and their house payment was going up to $6000.00. They lived in the house until July. He has a stash of $15k in his house and they are loving life now. I think we all feel good after deciding that enough is enough.

I guess that is until we start getting those 1099's and phone calls from recourse seconds looking for their balance. My two concerns are my recourse second coming after me for $55k and any state tax liability. I think for the IRS we could declare insolvency for any 1099's amounts. It will be interesting to see these forums in April and what people are going through with taxes.

[Lisa in MN]

Hi KT,
We stopped paying in April of this year, had a sheriffs sale scheduled for Dec 4th that WAMU/Chase postponed- still no date. The longer it is postponed, the better off we will be. MN has a 6 month redemption period. My brother is a CPA and he said he believes that they will ultimately, in the end, give most of us a manageable deal. The fact that WAMU is still "putting together" my QWR I sent 33 business days ago, tells him they are going over it themselves with a fine tooth comb to know what we might be planning. I read somewhere- probably here- that 70-75% of subprime mortgages ritten in the last 3 years have TILA violations! I think it is worth it to pay for a document review and am looking into that. For us the most obvious is the inflated appraisal in 2006 by the "expert" hahahahha. As for recourse, I read that in MN it is rare because companies know that we have no money or wouldnt have foreclosed, and it isnt worth it in the end. ( attorney fees, etc...)
Like you I will deal with things as they come along. My daughter is much better off in a nice maybe smaller townhouse or apartment with cool amenities and parents who arent stressed and fighting all the time.One interesting note is when I spoke to someone at WAMU regarding a loan mod that was a joke...she asked me how much I could send because we are 8 months behind. I asked what the terms are of her loan mod and she said "I cant tell you thats until you tell me what you can send" I told her 500.00 and she asked if that was all because what have we done with 8 months of house payments? I told her I paid off other debt and she said "You should have saved it" and I replied," Are you kidding me? So you can see we have 20,000 in the bank and deny a lod mod based on that??????? I will not play this game with you" She was beyond rude. If you do put the housepayment $$ away, even a part of it....put it someone elses account or something because my brother said they will use use it as an asset- AGAINST you. Good Lord, the games never end.
Have a great weekend!

[civilguy]

We just received our notice of default last week. Haven't paid both the mortgages since May 08. We started seriously looking for a house to rent here in Orange County last week and so far have gotten rejected by one property owner because of our credit. We have a verifiable combined income of close to 200k a year but this owner did not care. That was the first house we looked at and I'm sure there are plenty more out there that will rent to someone w/ a delinquent mortgage on their credit. I'm sure it will turn out ok in the end.

[spj3210]

Originally Posted by civilguy

We just received our notice of default last week. Haven't paid both the mortgages since May 08. We started seriously looking for a house to rent here in Orange County last week and so far have gotten rejected by one property owner because of our credit. We have a verifiable combined income of close to 200k a year but this owner did not care. That was the first house we looked at and I'm sure there are plenty more out there that will rent to someone w/ a delinquent mortgage on their credit. I'm sure it will turn out ok in the end.

Wow, I am surprised. I guess I have been naive but I thought the income meant the most (and you make much more than we do) when it came to renting and figured if an owner had an issue w/the credit report than a larger security deposit/more months rent in advance would solve that in most cases. I'm sorry that happened to you and I hope for all of us that it was a rare occurrence!

[KT in CA]

I spoke with an attorney today. He seems to think that our bank won't come after us for our first or second (both are with same bank). He says he has never seen a judicial foreclosure, and so far hasn't seen banks come after anyone. He said the federal tax liability should be waived. State he's not so sure about, and since Arnie just announced to the world what a bad state we are in, we probably will have to pay something on that when the time comes.

This attorney is also a landlord. I asked him about renting to people in foreclosures. He said he just rented one of his houses to a woman who is in foreclosure who had otherwise good credit. He said that other landlords he knows are also renting to people in foreclosure because we have owned homes and know about pride of ownership. This woman happened to do some painting and planted flowers outside. But he did recommended not staying in your home long enough to have to be evicted. He won't rent to people who have been evicted. So I think a lot really depends on who you are trying to rent from.

Basically, he said the bottom line is this. If we choose to stop paying do so in January and then pay off some of our debt and save what we can. Save for a deposit on a rental place, and just ride it out. That it's nothing to be ashamed of and in the end if it means providing for my family and having a better life then that's what has to be done. It's a business decision about a roof and four walls. Have to know when to cut your losses.

[925girl]

Lisa in MN,

Awesome letter!

That is why you are finally getting some attention. Please keep us posted to the offer from the bank. CNN has been reporting that only 100 families have been helped by the govn't program designed to help 400,000 "struggling homeowners". It is really obscene what is going on. Every week there are more bank sales posted in my immediate neighbourhood and today I saw 2 houses with trucks hauling their stuff out. My bank sent a letter stating they would auction the house on 12/26/08 but so far nothing else. No certified letters, no other communication, a partial response to my QWR after the 20 day time line. I am very curious as to why they did not send ALL the paperwork. I in reality cannot afford to pay a lawyer. I have huge bills coming at me that are not credit cards and have to come up with cash for everything. It's like the rabbit hole, the twilight zone, and the Grapes of Wrath all in one! Please keep us posted.

Cristina
925girl

[Lisa in MN]

Hi Cristina,
Thanks for the compliment. It was born out of complete disgust and frustration. My new "liason" at WAMU is in Quality Assurance, and I was told by her to call only her with issues. OF COURSE no one from the loan mod called me back within 24 hours from when I initially spoke to her on Thursday, so I "left a message" for my liason. No call back.....HUGE suprise there!
Best of luck Cristina and everyone and make this Holiday season joyous and peaceful.

[The Professor]

Lisa, my hope is that it all works out for you. I think it is important to explain the realities to your daughter. The assumption we all make is that the structure that serves as our place to store personal items and sleep at night is our home. The truth is it serves the function of being a house. Where the liabilities exceed the value of the house, it is not ours at all. It belongs to the secured lender. We claim some sort of ownership of it because we mistakenly view the nature of the transaction. The truth in many cases is we "rent" money and in doing so we receive a collateral entitlement which is to occupy the house as long as we continue to "rent" the money (or purchase the house from the lender once we've quit renting the money by paying off the mortgage).

I learned a long time ago not to fall in love with that structure we call a home. It certainly serves a useful purpose, but it has in the many examples I've seen discussed here, also served a destructive purpose. There is simply no question that destructiveness has led to broken marriages, broken hearts, and a variety of other hurtful things. For many forum participants, this real estate downturn has provided a life altering experience. From their gated communities, they use to look with disdain at those of lower economic status who had their home attached to their automobile by means of a trailer hitch. Well, I'd suggest that view for many may have turned to admiration, given the trailer (aka home) was paid for and its mobile nature was more conducive to a lifestyle that promoted freedom.

I guess my point is all of this is be happy with what you have. Don't become a prisoner to the debt associated with having stuff.

Take care,

Daniel

[Lisa in MN]

Thanks Daniel...wise words from a wise man. I disagree with giving children details of all issues....I think it disrupts their sense of security. With us, now the ***'s out of the bad so to speak and I gave her the rough outline...not all the details.
I agree with the destructiveness and i have already begun successfully detaching from this house. It has created too much stress and harship over the past 8 years. It is easier to let go, and somewhat liberating.
I see no meaningful help in any of the success stories on this forum....I guess by that I mean principle reductions (my opinion of course) because so many are underwater. Reduction of interest will not lower our payment enough to keep us here. In the end, only a principle reduction will do that. Besides, how many will be kept in the subprime mortgages they never should have gotten in the first place? The loan papers that could be full of mistakes and outright lies? I will not be thrown another bone---- happened to me already. I know what I need and will accept nothing less. I dont see that happening so we will enjoy our last Christmas here and then move on when we have to.

Lisa

[925girl]

Lisa in MN,

You and I are kindred spirits! You and I are on the same page. I too have been in my home for 7 years and paid and paid until 4/08. My kids are upset since their world as they know it will be different. I told them and every day I point out another new bank sale sign on the way to school. Kids are adaptable we just need to reinforce the positives so they don't get as big of a complex. I try to show them how others suffer in this world-you know leave those commercials on for 3rd World orphanges. Our parents generation bought one house they could afford and stayed the course. What the future holds for us is uncertain. Eventually MAYBE we will buy another home but never again under the assumption of over half our monthly salary to another bank. If that means a sugar shack in the backwoods so be it. I doubt it since the housing market will doubtfully return the high peak experienced in the last 15 years (at least in Bay Area, CA). It went to high, it was inflated beyond belief. Homeowner fever is gone baby gone. It's not the status symbol it used to be (unless you are almost done paying your mortgage). Make the best of your days, kiss your kids, turn up the music and work it out with them. I guarantee you and they will ***** up laughing.

[925girl]

The webpage put the astericks in....I didn't use a bad word.....

[The Professor]

I've experienced the same s**t. Oh I can't believe I said it (I really didn't, those **'s were mine....)

Daniel