Confused on how to proceed in California

[Catherine]

Dear Professor Shays,



I don't have the words to express how grateful I am you took the time to read my post 'Set up for foreclosure'
to direct me here. The kindness, understanding and support through this difficult time from so many taking their time to help others is such a blessing to those of us living in fear, sadness, depression, guilt and for me total confusion. My lender is First Franklin being serviced by Home Loan Services that I read is being taken over by BofA this month. These guys started my loan on a lie for a better one and seem to be ending it the same way. After months of doing everything they told me the only thing they may have done is modify my loan into a payment much higher there is no way I can afford due to back property taxes. We never missed a payment until this November when it adjusted. According to HLS I was denied a short refi because the investors refuse to take a loss. They straight up told me they would rather take their chances on a foreclosure. Is that the bottom line I must accept? If what I am reading is correct thank God I live in California. Although after reading posts I am left with more questions than answers on where to go, what I should pursue and truth of the matter after all this is said and done the last person I would trust to make the right choices is myself. Some said if the investors refuse to budge there isn't anything anyone can do, but there are laws in place that say otherwise? Can those laws help me keep my home? I do understand in my head from a business financial point being upside down about 200k on a loan for 378k, 18k in back taxes and 10k behind in payments is very important to factor into this equation. Explaining that to my heart I don't hear this may be the best outcome in the long term. All I have ever wanted that was promised to me is a payment of 2k a month to include taxes. My husband in the Union so I don't count on his income. When he is working we look great on paper, but I know times get rough. Union work has all but dried up in California. He is planning to travel the United States. That being said I can and would commit to 2k if they would work with me. The last contact I had with the negotiator he was pushing me to short sale. He kept saying the investors will never allow me to stay in my home or take a loss. How can he say that and what does that really mean? The short FHA refi offer was for 50k more than I could list my house currently. Why and how would they accept that much less if I took that route? I guess what I am humbly asking for is insight, guidance for the best direction to go from here with a clearer understanding of what my future holds or any way I can change it with one last ditch effort to save my home from foreclosure? If I need to pay someone to do this I will to keep the free help for those that can't afford it. After reading up on all the scams out there turning this over to someone I can trust would be greatly appreciated. In advance thank you for the any answers and the kindness I have seen them given, Catherine

Paso Robles, California

[Catherine]

Uh oh. After what I read I may to add this. This loan we are in is a result of a refi a little over two years ago from the first adjustment for a loan amount of 340k. The broker at National City at the time was my new best friend talked me into taking out under 20k to pay off medical bills to bring our credit score up to get us into a great affordable FIXED loan six months later both knowing I couldn't afford the new payment for long. A notary showed up at my house to sign that didn't explain the loan. I do own the fact I blindly signed for my trust in the broker and that mistake will cost us our home. Sharing this I feel dumb and dumber on so many levels. We all know what happened six months later. I was stuck in a loan amount of 378k with a payment the taxes got left unpaid to keep the loan current. He told me the reason the new loan amount was so high was all the extra work in his end to get the new one ready to go. The fact FF did not sell off my loan amount I was getting two refi's for the price of one. When he was no where to be found I had no way of getting out of this. There was a huge prepayment penalty attached to this loan. So at that point I begged to have them to waive it (DENIED) which kept me from trying to resolve this when I saw the market crashing. The ink was dried and that promise was no where to be found. Correct me if I am wrong, but from what I just read since this is a refi does that change the rules? Can they come after me? Happy New Year, Catherine

[The Professor]

You've come to the right place. A key component is providing participants with the best possible responses is if they outline the facts as completely as possible, leaving our stuff that won't help in providing a solution. I've found the best approach in that regard is I ask the questions. They are:

1. Is the subject property located in California and was it, at the time you bought it, purchased with the intent that is would be your primary residence?

2. What is your estimate of its current fair market value?

3. What are the balances on the existing loans on your home, and who is the lender?

4. For each loan identified in the previous question, was that loan created at the time you bought the home, and were the entire loan proceeds used to pay for the home?

Daniel

[Catherine]

Hope this helps.


1. Is the subject property located in California and was it, at the time you bought it, purchased with the intent that is would be your primary residence?
Yes to both
2. What is your estimate of its current fair market value?
Sadly about 220k, but back taxes around 18k.
3. What are the balances on the existing loans on your home, and who is the lender? One loan 378k interest only that went from 7.75% having a payment of 2385.00 that jumped in November to somewhere over 2800.00 at 9% not including taxes, First Franklin/Home Loan Services.

4. For each loan identified in the previous question, was that loan created at the time you bought the home, and were the entire loan proceeds used to pay for the home? My first loan was a 100% finance in 2004 with First Franlkin. It was an 80\20. The 80 was sold to Chase. When it adjusted in 2006 we did a refi taking under 20k out to pay off medical bills.
THANK YOU for reply so soon, Catherine

[The Professor]

Catherine, you situation, given you've lost the non-recourse protection that existed prior to your refinance, isn't really that bad if you only have a first loan on the property. Your lender will undoubtedly follow the path of a non-judicial foreclosure under California Civil Code Section 2924b. The chances of them going through a judicial foreclosure in order to preserve their right to seek a deficiency judgment is extremely remote. Once they complete the non-judicial foreclosure, you are no longer personally liable on the debt.

I hope this eases your concerns. But we need to continue the dialog so that you have some idea on pre-foreclosure planning in the event the situation heads in that direction.

Daniel

[Catherine]

Yes, thank you Professor Shays for easing that major concern of this outcome. I was hoping not to be forced to file a B/K unless that would make the investors change their tune?? I wish I knew who they were. Being I have not been able to afford the adjusted payment since November foreclosure is soon to follow unless I can contact the right people that could possibly change this. I honestly do not understand the numbers they run. All I know is I make a little over 4 grand bring home and my husband has 18 hundred a month unemployment at worst case. I can commit to 2k a month including taxes and get the life I had back. If you would be so kind to suggest a direction or from what I have read I respect the fact you will be straight with me so do I give up trying? Accept the fact we will lose our home. It's just a matter of time. That should be my only focus? Save for a fifth wheel to leave here with a roof over our heads? Take care of you too, Catherine

[The Professor]

In the previous real estate downturn ('89-'94), I worked on the lender side of things, and I believe I can provide you with their view of things. As you may recall, during this period we witnessed the savings and loan crisis. Key to a lender staying in business is having a positive balance sheet. The same is true today. The problem with "workouts" like you suggest is that they will trigger an immediate loss recognition. Lenders (and investors) don't want to recognize that loss today, believing if they can delay it they can remain solvent and survive. So in essence, what you and other borrowers are facing by dealing with investors unwilling to negotiate a workout that will work (particularly if it suggests a principal write down), is that the lender doesn't want to face the loss at this time.

I repeatedly suggest on this forum that you take a business like approach in seeking a solution to your problem. That business like approach may be concluding that it just isn't worth the fight to keep a home that is so underwater. It that is your decision, it should be made with the idea of maximizing the benefit to you during and after the foreclosure period. The primary benefits that accrue are your ability to live in the home without paying the lender. Depending upon circumstances and the relative speed with which the lender reacts, this time period appears to run somewhere between 8 months (from the date payments cease), and a year, based upon the postings I've read on this site. Additionally once the lender completes the foreclosure they may be willing to offer "cash for keys" to avoid having to go through the eviction process and having a method of assuring the home will be turned over to them in good condition.

I also strongly suggest that you consult with an attorney skilled in real property law and debt collection practice to confirm that this is an approach you want to utilize. An obvious concern, discussed in a number of threads on this site, is the impact of a foreclosure on your credit report and how that will impact your ability to rent suitable housing. I encourage you to read those threads. I think it will ease your concerns about these issues.

Take care,

Daniel

[Catherine]

Dearest Professor Shays,

Golly I am a stubborn woman. Talk to much too On the business side of this scenario I KNOW your right that down the road especially if I do this by following your suggestions it will be best in the long run. We are in our late forties so we thought we would be here the rest of lives. The emotional side of me says wait one darn minute I have worked six days a week at times to keep us going for our years here. To become ********? I don't think so. At least not without a fight. On my off time if I am not with the kids and or our Granddaughter my husband and I have worked and invested to fix this place up. I wish they would have never told me to get approved for a short refi. Had that happened oh yes there would have been a huge reduction in the principle with all my worries regarding my home could have been over. The lies I was told would have been a lesson learned, but I got to keep my home. They would gotten a lot more then instead of forcing us to quit now?? That is a part of this I can't seem to wrap my head around. My question is if they really don't want to have a negative on their books will they come back to the table before the foreclosure goes through with a better offer? By law do they have to? Having a payment at 2k a month is a little more than rent, but with taxes included along with the write off it would be a wash. Although we are way upside down if we could find a way to keep us here affordably should I try that first? Then if I choose to walk away because of the huge debt it won't be because I didn't do all I could to honor my word? Would a local real estate attorney be the best one to try to make that happen? A woman named Cyrene contacted me. Do you know her? Can going through a third party get past the loss mitigation department people that seems to do nothing more than run you in circles? Given the numbers I shared with you am I being unreasonable for wanting to stand my ground on the payment amount that yes includes the full amount of the loan? Is that even feasible? I am done faxing my financial's to HLS. They lose them half the time anyway. Either I make too much or not enough. I never missed a payment for more than 2k, but it got tight at times. Told you I was stubborn. Is it okay to have this take or leave it attitude? Who do I give that my bottom line attitude to? I am sorry for posting so many questions. This is the first time through all this I have found REAL answers without being judged for coming to this point in our lives. I HOPE you all know how much that means. You bet I will be reading as many posts I can find will be educate me. Thank you so very much again, Catherine

[The Professor]

First a disclosure. You like other California taxpayers, pay my salary. That results from the fact that I teach at a tax supported educational institution. That said, I have no financial interest in any entity that can provide assistance, even those who have Moe's approval and are allowed to advertise on this website. I do believe Moe when he says that he monitors those entities advertising here and appears to get involved in resolving any issues where a forum participant has problems with one of the advertisers. Oh and I participate on this forum voluntarily and without receiving a dime of compensation.

I guess my point in saying this is absent the advice of a trusted person on who to hire as an attorney knowledgeable in California real estate law and debt collection practices, I would recommend utilizing one of those entities that support this website rather than resorting to the advertised claims of others. If it sounds too good to be real, it probably is. This "foreclosure assistance" business in the past became such a "fraud related" problem the California legislature enacted the following:
CA Codes (civ:2945-2945.11)

I have no idea who Cyrene is. Probably works for one of those entities I'd avoid who take your money and do little else.

In terms of your situation, you need to combat the desire to bring emotions into play. I fully recognize just how difficult that can be. Nevertheless, this is your life and the decisions you make at this critical junction will impact how you spend your retirement years. Not only is it "okay to have this take or leave it attitude." It is necessary, in my humble opinion, to adopt it as you hunker down into survival mode.

Catherine, you need to do the right thing. The right thing isn't "honor my word." Yes, you made a commitment to pay the money back. But that commitment was conditioned upon having the ability to pay. You don't have the ability because of circumstances. Those circumstances include your inability to sell the home for what is owed. The reason you can't do that isn't your fault. It is, in my opinion, the direct consequences of the actions of real estate professionals, investment professionals, and government regulators, in promoting a market based upon unrealistic assumptions. I put the blame squarely on them.

So, go ahead and use your business sense. You'll gain my respect, and I believe that is so much more important than the respect of all those people who propagated the fraud on consumers by claiming "real estate always goes up." Well it doesn't and we are witnessing the tragic results of this untruthful statement.

Daniel

[Catherine]

Oh my gosh Professor your awesome. I think I already figured out by your kindness there is no monetary value attached. There is nothing in your reply's to suggest that. Taking the time to help and advise complete strangers with your education in this industry at least for me and I am sure many others reminds us there are good genuine people out there that do have a homeowners best interest at heart. From my heart to yours thank you for that, Catherine

[NorthCoast]

Originally Posted by Professor Shays

The reason you can't do that isn't your fault. It is, in my opinion, the direct consequences of the actions of real estate professionals, investment professionals, and government regulators, in promoting a market based upon unrealistic assumptions. I put the blame squarely on them.


Daniel

I understand everyone's got bills to pay, and you've gotta adjust to the maket to stay in business, but it amazes me that many of the same Mortgage Brokers who ran up the numbers and got ritch while the maket was booming, are the same folks who are now involved in "for Profit" modifications. I guess who better than a cheat to know the system, but the notion of giving them even more money is sickening.

[Catherine]

Dear North Coast,

I read a reply from you on a different posting that made reference to SLO county. With the comps you mentioned my guess in either you live in Pismo or Shell Beach??

[The Professor]

Catherine:

Part of why I participate is a number of years ago I was in a profession where I found myself as part of the job, hurting good people because it benefitted the party who hired me. Years of work soured my personality and I was fortunate to wake up and recognize I needed to do something I was both proud of doing and felt provided a worthwhile service to those I served and the community. Teaching fills that goal. But what also fill that goal is in an anonymous manner being able to put the knowledge I gained in my previous profession to work helping victims. It sort of balances past actions with good deeds. I've still got a long ways to go to even out the scales so you'll see me participating here for a while. I hope that makes sense.

Take care,

Daniel

[Catherine]

Dear Daniel,



You make absolute perfect sense. You were on path at some point in your life you took a good hard look in the mirror didn't like the part most people ever see, decided to step up, learned lessons for who you were then, took responsibility for that, made changes and in helping now or however long you have taken a different road it is a form of healing. Giving so many us gifts from your time, knowledge and education I sincerely hope there is no guilt left from a past you changed. Please forgive me if I am out of line or talking out my well I'm sure you know what We all have a past, made bad choices, but when we learn from them after a hard road ultimately you like what you see in the mirror. Please believe this comes from my heart after my journey in life. Let me start by saying I am not sorry for my past. It made me who I am today. I grew up in an unspeakable childhood with my Mother clueless to what went on behind closed doors. In my early years has an adult I was reacting to that so in all my bad behavior I had a hidden place to blame or worse faking to others how I really felt about myself. I hated seeing myself in the mirror. The one thing that motivated me to change was my three children. I had to quit blaming my past and take full responsibility for the adult wife, mother and friend to those I loved. My goal in life became to raise them with my prayers, unconditional love, laughter and even in discipline it was for raising them for their lessons in life knowing respect, right from wrong and their choices had their own consequences to learn from. The only ***gage I ever wanted for them to leave my home with would be in a suitcase. Two of my children still live at home. They are not perfect nor am I, but my healing came from seeing the lessons they will continue to grow in had a decent foundation for their start in life. One major factor that comes into play now is my home that carried an emotional journey to why I am here now and if need be let it go. I was raising my children on my parents property in a separate house for 20 years (the bad people had moved or died) taking care of my Dad and Grandmother while blessed to afford being a full time soccer Mom. A family member (step brother) I had no idea was affected by our childhood came after my daughters. I thank God everyday they were never touched, but their brush of what could have happened had I not took it all the way would have been on me. I made sure this was not a secret to my family and police in my fight to protect them which lead me to packing my family and moving to this house. It was in a way another healing for me. To tell you the truth that part of my life I at look now has the most important choices I will ever make while teaching them this is a reality in some families, but they were worth protecting no matter what. I have been truly blessed to be a part of other children's and adults that I have helped reach the other side of this. I am the first to admit I need guidance with sound advice from those blessed with being book smart. I understand it's time to let go of what this house represents to my heart to get the right perspective to move forward. Getting there is not coming easy for me to accept. Having found this place to receive help with understanding to start or finish another chapter in my families life means the world to me for reading from so many that participate here if for no other reason than simple human caring and kindness for one another not wanting anything more in return that to help those in need. Hello Daniel!! The appreciation and blessing from this I have asked God to pay it forward with a simple heartfelt thank you from me. For those reading this I am very sorry for my honestly in admitting a deeper emotional side to my fight regarding my home. What I wish for all of us facing this is the power the lenders and investors have over us they step back from the all mighty dollar to realize it's not always about numbers it about the people, the families, the children living in homes with parents trying to do the best they can under insurmountable stress levels doing all they can to hold it together at this time of our lives. If I have offended anyone or got way off tract by sharing this PLEASE forgive me. Take care of you too Daniel, Catherine

[cactus77727]

Prof Shays: The advice, help and guidance you have provided to me is immeasurable, and of a nature that I could never repay to you personally. But I will multiply the seeds of your charity in my own life, whenever I find the opportunity to help others with my own skills and knowledge.

[Catherine]

Dear cactus77737.

The way you worded this last reply says it all. Thank you. I feel the same.
Catherine

[The Professor]

Thanks for the kind words. I'm blessed to have recognized early on what a disaster this was going to be and made financial decisions that have resulted in my ability to avoid monetary losses. What I'm trying to do is to suggest to many forum participants a valued piece of advice contained in that Kenny Roger's standard, "The Gambler." Specifically, "you've got to know when to hold 'em, and know when to fold 'em."

Daniel

[Catherine]

Thank you once again. Learn how to walk away and when to run? Nike's are in the closet. I swear, I am trying to get there. Anyone have a 2x4 handy? The law office on this web site contacted me today. Without any promises made or all my information on their table except what I could give over the phone there may be a good chance they could get my payment fixed and affordable. My husband wants to give them a try. I have come to the conclusion I can not sit back, lay down and do nothing, but also I realize I do not have what it takes or enough of a clear understanding to negotiate or navigate this on my own. I hope there is understanding when I say any trust left to give to anyone involved with these kinds of transactions will not come easy ever again. That being said one thing I have been searching for is to be able to turn this over to a professional that will be the best advocate to see us to the other side whether it is to modify our loan or not just walk but run from this house. So my question to throw out there is has anyone had a good experience going this route? Happy Saturday afternoon, Catherine

[Catherine]

Here I go again, back to confussed. Is Loan Safe Solutions is you follow the link for Griswold Law Office and the link that says Safe Loan Modifications are they one and the same? Catherine a true blond.

[Moe Bedard]

The attorney's office, Griswold and Agdeppa does the loan modifications
Safe Loan Modification Service | Home Mortgage | Protect Your Home & Mortgage With Loan Safe

[The Professor]

I'm all for a modification that brings your cost of housing (taxes, interest, and fire insurance) down to a level that is close to the fair rental value of the property. What I'm not fine with is a payment that leaves your outgo substantially higher. Again this is a business decision. At the end of the road, you've got to weigh the cost vs. benefit.

A discussion that *** and I have privately had is how many of the "success stories" on this site end up as failures. Perhaps the answer may be found in the article below.

Daniel

___________________________________

Mortgage Modification Meltdown -- The bailout program still isn't reaching homeowners

By Broderick Perkins
December 23, 2008

Loan modifications aren't reaching struggling homeowners in need of creative financing and foreclosure prevention. And in many cases, the mortgage bailouts backfire on homeowners they do reach.

In a scathing indictment of loan modifications efforts, the National Association of Consumer Bankruptcy Attorneys (NACBA) says:

• When loan modifications are written, fewer than one in 10 of them result in a reduced principal loan balance.

• More than half of loan modifications roll unpaid interest and fees into larger, more drawn-out debt on the back end of the mortgage.

• Only 35 percent of mortgage modifications reduce monthly payment burdens for homeowners.

• A full 45 percent of loan modifications are packaged with increased payments.

The NACBA says that given the failure of loan modifications to put a dent in the number of foreclosures, nothing short of legal intervention will reverse a trend that recently prompted Credit Suisse to forecast 8.1 million U.S. mortgage foreclosures in the next four years. That forecast was up sharply from the 2 to 6 million foreclosures previously forecast by a variety of industry experts.

"Court-supervised loan modification is urgently needed to deal with this problem. Despite a proliferation of voluntary programs, we are not seeing evidence of a meaningful number of sustainable loan modifications," said Henry Sommer, NACBA president.

In its first report in February, the State Foreclosure Prevention Working Group, comprised of attorneys general and state banking departments, reported that the vast majority, 70 percent of seriously delinquent borrowers were not on track for any loss mitigation option. By September that had risen to 80 percent.

"The number of homeowners working toward a loan modification has declined by 28 percent between January and May, falling to a level not seen since late in 2007," the group reported.

What it is

A home loan modification, granted only upon the existing lender's approval, permanently reworks some of the terms of an existing mortgage in order to lower monthly payments and make the loan more affordable to the homeowner.

The strategy is typically designed for homeowners struggling to pay their mortgage, not for those who can pay their mortgage or are eligible for a refinanced loan.

The mortgage modification method of relief is at the top of the list of weapons used in the fight to stop foreclosures because struggling homeowners typically can't qualify for a refinanced mortgage — a brand new loan written to pay off the old home loan. Other options — a short sale (the lender forgives a portion of the debt owed if the owner can find a buyer), bankruptcy or auction sale — all cost consumers their home.

Modifications are generally lender fee-free and involve the lender or loan holder lowering the interest rate and or changing an adjustable rate mortgage (ARM) to a fixed rate mortgage (FRM) with a 30-year term. Some form of mandated homeownership counseling generally comes with the deal.

Complex transaction

"A mortgage is one of the most complex transactions there is. A loan modification is also a gray area for a lot of people. So of course people need someone to walk them through the process to tell them this is what you need and this is what you don't need," said Ginna Green, spokeswoman for the California office of the Center for Responsible Lending in Oakland.

In addition to lowering and locking in the interest rate, less common loan modifications include adding missed payments to the loan balance and extending the term of the loan. The least common, but most sought-after feature, is a reduction in the principal, whereby the lender actually lowers the mortgage balance, to further enhance affordability.

Reduced principal, along with deep interest cuts is, however, at the core of the Federal Deposit Insurance Corporation's (FDIC) more liberal loan modification program "Loan Modification Program Guide -- 'Mod in a Box' " modeled after the agency's mortgage adjusting efforts used on the home loans of IndyMac Bank of Pasadena. FDIC took control of the failed bank earlier this year.

"If they (lenders) reduce the first or wipe out the second, let me know. I haven't heard of lenders doing this. They are staying away from this," said Glenda Queensbury, a mortgage adviser and real estate agent at Referral Realty in San Jose, CA.

No relief in sight

Little relief is expected from the recently announced Federal Housing Finance Agency's "Streamlined Modification Program" designed for loans held by Fannie Mae and Freddie Mac.

The program is the first major effort to help set standards for loan modification programs. It creates a three-month mortgage modification trial period that includes the modification terms that will take effect if the borrower makes the new payments as prescribed during the trial period.

However, the SMP continues some of the ills NACBA says has prevented loan modification from becoming more widespread and successful. SMP loans are voluntary, they allow tacking on accrued interest, they can come with ARM rate-like terms with both rising and balloon payments, they only apply to the first mortgage, not second loans, and borrowers must have loan-to-value ratio of 90 percent or more.

Consumers seeking loan modifications have also been thwarted by the fear of fraud from a largely unregulated cottage industry of private loan modification services that can charge thousands of dollars in upfront fees.

California's Department of Real Estate has issued several "desist-and-refrain" orders against companies offering loan modification services. California Attorney General Edmund G. Brown Jr. recently announced arrests of suspects in a fraud ring preying on struggling Southern California homeowners. Modesto, CA-based Federal Bureau of Investigation (FBI) agents recently announced a task force to zero in on mortgage-related frauds.

"A racket"

"It's become a racket," says Greg Pennington, a San Francisco-based mortgage banking consultant and counselor with Parker-Pennington Enterprises.

The NACBA blamed a host of factors for the failure of mortgage modifications to catch on.

• Borrowers and servicers are often unable to locate multiple mortgage holders all of whom have to agree to the modification.

"The loans have been sliced and diced so many times that all of the owners cannot be found and brought into the process," the NACBA reports.

• Loan servicers fear investor lawsuits. Servicers have a fiduciary responsibility to investors who purchased mortgage-backed securities comprised, in part, of loans up for modification. Servicers are hesitant to modify numerous loans if it will cause the security to lose income and the investors to sue.

• Voluntary modifications typically don't include second mortgages. Second mortgages were heavily in vogue during the housing boom as equity gains allowed homeowners to buy larger homes than they could truly afford and use their home like an ATM.

NACBA also says in 2006, a third to a half of all 2006 subprime borrowers took out piggyback second mortgages on their homes at the same time they took out their first mortgages.

Unfortunately, first mortgage holders don't have any incentive to write modifications to give borrowers money to make payments on second mortgages. Just as risk-averse as first mortgage holders, second mortgage holders, rather than waive their rights in a loan modification that could cost them a 100 percent loss, they'd rather take their chances on collecting a few more payments before the borrower goes into foreclosure.

• NACBA also says overwhelmed servicers are not set up for the case-by-case negotiation process necessary for modifications, but more practiced in the automated foreclosure process -- which comes with financial incentives.

"Many also have monetary incentives to foreclose rather than modify," NACBA reports.

[AZChick]

"Many also have monetary incentives to foreclose rather than modify," NACBA reports.

I think that says it all.

[Catherine]

Professor Shays and ***,



Has always valuable information followed with good advice is why there are so many are here searching for the right answers along with the best direction for each of our individual circumstances to get through these (very bad words) loans. I totally agree at least in my case the loan modification HLS offered me was far worse than the adjustment. I did not say no. I said oh hell no. Followed by several choice words including I am taking my new damn front door, but would be nice enough to nail up plywood in it's place. My temper went off in a big way when that short refi I was told was going to happen any day was a straight up lie. Being no one will call me back my guess is I burned that bridge by my outburst. After reading this last post, speaking with my husband for us it would be worth spending a chunk of change to let a professional see what they can accomplish. My only concern is the knowing I made best choice. I honestly do not mean to offend anyone by that last statement. The difference this time is if we hire a company to go to bat for us if the end result isn't on our terms we walk. Asking for that first broken promise the (more very bad words)broker sweet talked me that put into this loan I do not think is too much to ask. Like I said it would be a wash financially when compared to rent. If the lender decides to right a wrong we will take it, but if not plan 'B'. Please wish us luck, Catherine

[The Professor]

My point is presenting the article is to provide what I'll characterize as a knowledgeable view on why the system in its present form will not work. Frankly I don't buy the view that judicial oversight is the answer either. I've spent too much time gaining an appreciation of the fact that with judicial oversight comes the the opportunity for the piling on of professional fees that actually worsen the situation.

I take a plumber's view relative to a solution. That is, simply flush these crappy borrower/lender scenarios through the system by completing the foreclosure as quickly as possible. For borrowers and lenders alike that process should perhaps include both an elimination of potential deficiency liability and the adverse impact on a former borrower's credit along with a quick sale of the property as a market price that is tied to affordability.

Yes, the result will be a paper insolvency of lenders as they book the losses, but the Government appears willing to stretch the rules and provide investment capital to eliminate this problem.

Well that's my $0.02 worth of advice.

Daniel

[Catherine]

Dear Professor Shays,



I love receiving all the food for thought you have provided. Worth a lot more than two cents. After years of this fight on my own in a short amount of time you and others have given a much clearer bigger picture, sound advice, peace of mind they won't come after me if we walk or they force us out. It's okay now. Knowing I am not all alone helps in ways I can't begin to express. I did my best for being put in circumstances I did not fully understand at the time that brought us here. Getting to this end result wisely with has much education and feedback I can find will make doing this so much easier than constantly beating myself up by ever signing those loan docs set up to fail. After spending more time in my own thoughts it's time to have another chat with my husband after he reads from these posts for what we need to make acceptable to stay. Instead of only focusing on the 2K a month fixed payment if there is not a significant principal reduction from the possibility for new laws put into place to force this to happen in the timeline we are facing so be it. Does that sound fair and reasonable for the only outcome that will keep us here? LOL! My husband is a plumber/pipe fitter so your analogy was great. I loved sharing with him if the shower breaks I can fix it was a garden hose. He tells me to be grateful he is not a telephone repair man. Happy Sunday, Catherine