Step 2 - Miss the first payment

[CaWalker]

I waited for the right time (for me) to miss the first payment. I thought Dec would be a good time as I would be able to miss the Taxes & mortgage payments at the same time.

So its Dec 17th now and I haven't paid anythign for Dec which makes me 2 days late on my payment (its due Dec 1st with 15 days grace). Starting this month, I'll transfer my mortgage payment to my savings instead of actually paying mortgage.

I haven't paid my Property taxes and Mello Roos which were due Dec 10th. I am told that since I have Mello Roos, the tax collection agency can put a lien on my property and start the foreclosure process quicker than usual.

I plan to stretch the foreclosure process as long as I can so I can live payment free in the house.


My background:
I bought a new house in CA in July 2006 for 366K with a 80/20 5yr I/O ARM. My same model is on sale one street behind me for 230K (about 37% down in value). The highest paid for the same model was in Late 2005. That house went for 430K at that time.

I stumbled upon this forum about 3 or 4 months back. I got a lot of help from a lot of people here. Thanks to all who answered all my previous questions.

My Step 1 was to secure my assets & create a plan. I did that by changing my bank from Wells Fargo (WF) to another one. My 1st and 2nd loans are with WF and I had heard stories of them taking out money from checking/savings to pay the mortgage.

Also as step 1, I have prepared my docs to send to the bank. Letters to stop the calls, income/expenditure statements, paystubs showing decline in income etc. All ready to be sent as an when required.

[CaWalker]

Can't edit the post.
Just wanted to add... This is in Sacramento, CA.

[The Professor]

Welcome back. It isn't often that I find a close neighbor on this forum. Let me guess. Do you live in the Natomas area or Elk Grove?

Daniel

[CaWalker]

Thanks Daniel.
Actually I'm in Rancho... Anatolia Subdivision... Surprising part is that the prices here have actually stabilized in the last 3 months or so.. Or so it seems... Maybe its a temporary break from the free fall.

[Lisa in MN]

CAWalker,
I dont know that I would put the mortgage payment $$$ in savings...my brother ( he's a CPA) said if you are attempting a loan mod, it will be seen as an asset and you will be denied or told you do not have a hardship.

Just an FYI
Lisa

[LenderNoHelp]

What about not paying the property taxes? Can the county collect down the road?

[The Professor]

Jenny, while theoretically you could potentially be liable for the property taxes, counties go the easy route which is to simply wait until after the home has gone through the foreclosure process and once that happens the lender (or 3rd party purchaser) will pay the delinquent taxes.

Daniel

[Scott]

Prof-
What are the chances that the county would come after someone for the taxes/fines/fees vs wait for the foreclosure then collect from the new owner or bank?

I just stopped paying 1st/2nd mortgages and feel fine about it. The only thing I'm worried about is the prop taxes, which I didn't pay on 12/10 when they were due.

Thanks-
Scott (CA property)

[The Professor]

Scott, don't worry. Here in California, when you don't pay your installment the county tax collector does a "paper sale" to the state in June (for this fiscal year's taxes that sale will be in June 2009). The tax collector continues this process for four (4) additional years and then after five (5) years of non-payment of taxes there is actually a tax sale where the property is sold at public auction.

Way before the property gets sold at one of these public auctions your lender (or the purchaser at their foreclosure sale) will pay the delinquent taxes and you will be off the hook.

Take care,

Daniel