| HSBC sent my 2nd mtg to collection agency & I don't know why
Hi -
I hope someone can shed some light, because I'm tired of this emotional roller coaster ride.
We bought our house in Washington state (a Seattle suburb) in 7/2005 for $394,500. It's our 2nd home, although our 1st was about 9 months prior and was the same kind of deal (though we were able to sell and move on). We are military and by the time the house was built we transferred to Seattle. We were "given" an 80/20 to avoid PMI (even though I wanted to go VA) with the first being interest only 5/1 ARM, which actually adjusted 3 years into it and adjusts every 6 months after that. It adjusts to prime + 5% and then rounded to the nearest 1/8th. It is currently at 8.15% and the principal is $315,000. The second is @ 10% and the principal is $77k.
In January 2008 I got laid off, I'm an outdated computer programmer and was earning $72k while my husband is in military and makes about $68k. I put the house on the market within the week, but no bites (house was on mkt for $429k). A few weeks later I got a call from original mtg broker asking if I wanted to refi because my loan was about to reset. I told him that was impossible if I had a 5/1 ARM. He said to read over the paperwork and call him back. I was PISSED! I know I should have known, but in Washington state there is no attorney at closing with you. I had an hour to sign for myself and my husband via poa for 2 loans. Well, in May 2006 our house went into foreclosure due to another job loss I had, so our credit was screwed and we couldn't get a refi.
I called Litton (who services our 1st) to do a loan mod in March 2008. They told me it couldn't be done until the loan was due to reset and to call back in July. So I called back in July (still unemployed) and they told me I should have started the process a few months ago because it'll take 90 days to get an approval through the investor. I'm PISSED again, because now the loan will reset before I get an approval and unemployment just doesn't pay enough.
I sent Litton all the documentation and the hardship letter they requested and I continued to make the monthly payment on the last business day of the month to prevent a 30 day late from showing on credit report. They put my account in something called a modification forebearance and all the payments I was making was not getting credited to my account. They continued to tell me to not worry about it, this is just what they do while working a loan modification. Meanwhile, they're reporting me late, they said (I haven't checked, what's the point?). In September 2008 I finally got the approval from "the investor" (HSBC). All they did was kept everything the same as before the interest rate reset (6.15% interest only for 30 years). We were actually kind of excited at that, but then we received an offer on our house for a short sale.
The couple was preapproved. So, Litton renigged on the loan modification because now we're doing a short sale (although the only loan being shorted was the 2nd, the 1st was being satisfied). The payments we made in September and October were put in some forebearance account and I can't get them to actually apply it to my account. Plus, they were telling us all along to pay the original payment, but when the renigged they back dated all the payments to be due for the bigger amount due to the reset. I was able to make a payment at the end of October to make up the difference between what we paid in September to make a full payment. I think they applied that one, but I'm still confused because there's still a notation of forebearance on my account. Plus they keep saying we owe over $8000. Meanwhile, I was told that if I'm current on 2nd (HSBC) that we won't be approved for a short, so I didn't make a payment that month, which actually makes us paying 59 days late.
That couple was declined on their mortgage because the bank wanted to be conservative. This was in the middle of November. Meanwhile, no one has seen the house since their offer came in because the house looked like it was sold. The house went active again and we felt screwed because we lost 2 months of marketing time and I wasn't planning on making a payment that month because the house was supposed to be closed and out of my life. Meanwhile, I'm trying to talk my husband into going bankrupt because there's no way in hell we can come up with the money for the payment and if I can't make the payment by the last business day of the month the house will go into foreclosure and I'm not going through that again.
That same couple came to us a week later and asked us if they could rent our house for 6 months and then they'd try the purchase again. Our mtg payment is $3300 and they only wanted to pay $1800 rent. We got them up to $2100 and we moved into base housing at $1398 per moonth. So, we weren't saving any money, but between their security deposit and the first months rent we were able to make a payment. For this reason, we went ahead with this lousy idea.
In January this couple decided to go ahead and do the purchase. They were all approved and we had the final approval from HSBC (we have continued to make our payment every month to them on the last business day during this whole ordeal) good for closing on 1/31/09. The sales price was $385k with $10k in closing costs for buyer. On 1/20 we were told buyer's couldn't buy house because they can't get PMI!!!!!!! We are in a declining market and unless you have a 20% down you can't get PMI!!! Damn, I wish I knew they never were in a position to purchase!!! We are in a 6 month lease and they called the other day saying they are moving out at the end of February. I have no security deposit because it was used for their earnest money deposit.
I called both mtg companies to find out how to do a deed in lieu. Litton says the house cannot go into foreclosure, but it appears to be the same as the loan modification. I asked if it could still be done if there was a 2nd mtg - they said yes. I think they're lying, but don't know that for sure. HSBC says the house must be vacant and they can do it being the 2nd. They said to send in the same documentation for 1st. I never did that because the house is not vacant and if the house is vacant it will go into foreclosure and then the 1st won't do it. So, basically I can't do a deed in lieu.
I put the house back on mkt the day the buyers got declined. The problem now is that the house that's identical to mine on my street that's for sale lowered their price $20k, so I had to do the same. It was on the market for $379k, then we dropped to $359k, now we're at $350 and still no one comes to see it. At this point after paying realtors, etc the 1st might become short too.
The past 2-3 weeks I've been going back and forth on letting the house foreclose, try to do a loan modification (still unemployed though and it would have to be an "aggressive" mod by both mtgs - like 4% over 40 years fixed), go bankrupt. We had to go bankrupt back in 1995 when husband bought first house on VA and property taxes/insurance in Florida skyrocketed that we could no longer afford house and we really don't want to revisit that. The military looks very badly on bankruptcies and they seem to always find out. Not to mention my husband is deployed right now and we, or he, can't do the counseling that is now required.
Tuesday night I opened a letter from the Unemployment Commission saying my benefits have ended. I don't understand that since I'm approved for emergency benefits through June. They said it's only good for your benefit year and that year ended. I don't have any hours worked last year, so I don't qualify for a new claim.
Friday night I opened a letter addressed to husband only from Capital Management Services that said they have been "engaged by HSBC to resolve your delinquent debt. The amount past due is $77257.51. Please submit your payment and make your check or mooney order payable to Capital Management Services..." What the hell? I've been making payments every month at the same time. I made a payment at the end of November, December, and January. They have cashed each check.
Does anyone know what happened here? How to fix it? I have spent since May 2006 fighting to keep this house and I'm just tired now. I don't know how much more fight I have left in me. My husband is due to retire from the military in the next year or so and is afraid if we go bankrupt that he won't be able to get a job or rent a place to live in. I'm not worried about that, we did go bankrupt in 1995 - we were in our 20's then. We just are sick of all the bad advice we receive and listen to that constantly gets us in these messes.
I told husband come hell or high water I WILL NEVER AGAIN BUY A HOUSE.
Thank you - I know this is long...
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