is it time to put our $$ under the mattress??

[Enough Already]

Hi Slammy & Chaeffet,
Yes, these recourse loans/states are very scary. I'm in FL, also a recourse state. We've ended up opening 2 new bank accounts and spreading out savings between the two. I am uncomfortable with what's going on with governement too, but the bank feels safer than a fire proof safe in my house (that's just me). Once we meet with an asset protection atty we'll know better what to do.

I've also decided to try not to stress over it for now. Worry was keeping me up at night. I'm now a point where I figure they will or they won't, and we'll have to cross that bridge when we come to it. I do feel fairly confident that they will be willing to settle the debt for anywhere from 10% - 50%. I'm hoping for the 10% option!

BK is a last resort, but it's also an option if necessary.

[ORNV3]

SlammyR -
I agree with you. I WISH my house was located in a non-recourse state! Like you said, it's pretty cut and dry if you are lucky enough to have a home in CA or AZ.

I'm in NV and have made the decision to walk away. The decision was NOT easy and I really have no other choice at this point. The thing is... now that I've made my decision I have to deal with the fear of a deficiency judgment! So far it looks like banks aren't going after them but I have a gut feeling that will change in the future.

For me, that means they will come after me for $150000+. I don't have that kind of money unfortunately (or maybe fortunately)! However, I do make a decent wage and I don't want them to garnish it! I need every penny I make just to survive.

The little bit of money that I do have left (just a few thousand bucks) I gave to my fiance and put into his account at a credit union.

I'm not looking forward to the next few years of waiting to be sued! I might end up filing for BK just to get some piece of mind. Lucky for me I have not assets to protect.

[Enough Already]

I totally agree with Slammy also. I so wish we had the same protective laws here in FL, and all over the country as CA and AZ.

I may be naive, but I honestly had NO idea that the home wasn't collateral enough to satisfy the 2nd mortgage as well as the 1st. No clue at all. I guess I just assumed the house would satisfy both debts in the event of a foreclosure.

Of course, I never expected to face foreclosure, so it really never crossed my mind. My MISTAKE!

[Rowbee101]

I can hardly believe what i'm reading. I have read through most of this and I guess we have nothing but trouble to look foward to. We fell behind after paying medical bills that needed to be paid in order to continue recieving treatment. I spoke to FF/HLS before this happened, but we were at our ends.... maxing out C.cards, and already having taken all our equity out in a refinance 2 years eariler. They (FF/HLS) said we needed to be 2 months behind to even look at our loan. With my Wife not Working (health issues) Two months later we were behind, and submitted for modification. That was November 08'. it is now Feb. 09 and although they state they are "Processing" a modification we are runnig out of time. Sale date is set for March 20th. We submitted a Hardship letter, did everything they have asked, but nothing...can't even get a phone call back. We call about 10 times a day to try and get a straight answer....we are able to Make our payments, and have paid off all our Medical and most of our C.cards with the help of relitives, and a Bonus at work, but Cannot bring the House Current because they wont accect a payment only the 24k we're behind in one lump payment, we try'd to explain this and can can come up with about 12k, but no luck with these folks....... any suggestions????? Should we take the 12k and pay all our remaining Debt and walk away???? We have a steady income again and no one wants to help us with a second chance...house or no house should we let a loved one be in pain or die, or pay the Mortgage?? I know the choice I made...wasnt even a choice.

[kymburley]

Originally Posted by Enough Already

I totally agree with Slammy also. I so wish we had the same protective laws here in FL, and all over the country as CA and AZ.

I may be naive, but I honestly had NO idea that the home wasn't collateral enough to satisfy the 2nd mortgage as well as the 1st. No clue at all. I guess I just assumed the house would satisfy both debts in the event of a foreclosure.

Of course, I never expected to face foreclosure, so it really never crossed my mind. My MISTAKE!

Neither did I. But I didn't "discover" until yesterday that we signed a prommissory note on the 2nd in case of default. Had no clue. Should've had a clue, but with a 6" stack of paper to sign my name & my husband's via power of attorney, an hour, and no representation I had no clue what I was signing.

Of course, at the time we were making around $150k/an. and the thought of foreclosure never entered my mind. How could it?

I talked to attorney today who said that if I think I'm going to file bankruptcy in Washington that I better not have any money in the bank because the trustee will seize it. The big fireproof box with fingerprint opening technology suddenly sounds much safer than the bank. Think I'm going to go to the crawlspace, dig a hole, and bury this box.

[ORNV3]

Kymburley,
When you talked to your attorney today and decided to "bury your money" did you think about the fact that the trustee will probably be aware of this. Or will they?

I gave my fiance all of my money a few months ago because I decided to stop paying my mortgage and was preparing for a deficiency judgement. At the time, filing bankruptcy hadn't even crossed my mind! Now I seriously looking into it.... but I'm worried about that money I gave him. I don't want to get it trouble with the trustee for trying to hide money or something like that. I could use the money to buy a car and it would qualify as an exempt asset. I can't keep the cash because it is not exempt. However, I would rather have the money in his account for an emergency or for our wedding than buy a care. That said, I would rather buy a car than loose it all.

What do you think?

[kymburley]

I don't know how the trustee would know. I pull all my money out of my checking account every payday anyway, nothing unusual there with my behavior. Since I don't have enough money to pay all my bills in the first place and my mortgage continues to get paid I don't see it as being an issue.

But in all reality, IF we declare bankruptcy it'll be in Florida and I can drop my fireproof box at my mom's place.

I'm saving my money now, though, because I'm not sure I can make the payment on 3/1, which would put me 60 days late on 1st and in Washington they can foreclose on you as soon as you're 31 days late, according to Attorney #1. I will need all my money to pay exorbitant security deposits, etc in FL.

[SlammyR]

putting your "cash" somewhere else is perfectly legal, but i believe once you file for bk, any moving of money will be seen as fraud, especially large sums will be obvious. i believe kym has the right idea, personally. cash in a firebox can't be seen on any computer screen! and if you make periodic cash withdrawals, you can always say you like expensive lobster dinners. once you eat it, there is no accounting for cash. get it?

the more you use/depend on credit cards, your life spending habits are sitting on a statement for anyone to see. when you live on cash, no big brother has a paper trail of your business. this has become ever so apparent to me lately!

i've asked this Q before, and i don't have a definite answer on it, but i don't think a trustee can come after any other account/asset if it's not in your name. a bk is declared by an individual, not a whole family, so what is tied to your ss number is what is up for liquidation. please correct me anyone if i am wrong because i'm not sure about marital assets. but if you are not married yet, ornv3, i don't see how your fiancee's account can be touched.

[ORNV3]

I'm meeting with a BK attorney tomorrow. I'm not 100% sure I'm going to file... I just want to know for sure if I can. I'm also going to talk to her about planning for it and all that. I'll post my findings. I'm leaning towards it because this whole thing is consuming me! I don't know if I can wait years to see about a deficiency judgment.

[spring23235]

Umm so,if you have really decided not to make anymore mortgage payments.Should one close his/her bank account linked to the lenders?Or talk to your bank and stop lender's payments?Is it poosible for the lenders to take out money from your different account?
or Open a new account in a different bank? Deposit you pay checks there?
...I 'm close being broke cant even hire an attorney...BTW how much do they charge?
Please advice...
Thanks

[SlammyR]

spring, i would definitely cancel any auto-withdrawals from the lender, tell them you want to send a check each month instead. certianly do that before you stop making payments! they cannot make withdrawals from any other account unless you give them permission. i personally wouldn't bank with the same lender as my mortgage. seems to me it would make it real easy for them to see what's in there....

[Enough Already]

Spring23235,

If you've decided to stop making the mortgage payments I would definitely call you bank and cancel the auto payments to the lender. I also did decide to open a new account just to be safe.

As far as an attorney goes, call around. Many of them will talk to you for free, and give you advice. You may decide to work with one after talking to a few. They are not as expensive as you might think. Do you have a recourse loan? If you do the attorney may be able to help/advise you on how avoid a deficiency judgement, and/or protect assests. If so, it would be worth the expense.

Good luck to you. Please keep us posted.

[spring23235]

It's a 30 yr fixed loan- 6.375% for first loan(Aurora), 8.25% for the second(Countrywide)
I'm paying both Principal plus interest and the total loan amount is 210 K(i.e 168+42)
Yes,I'm aslo paying Escrow every month.
Calling the landers and stop the auto payments is a good idea?I tried to do online myself but it says I'd have to call them first or rather just stop by at my bank and tell explain the situation?
shall I keep paying my second mortgage because thats all I can afford now?

[KT in CA]

I'm in CA. We have some protection if a non-judicial foreclosure is done because they can't come after us for the deficiency. But our loans are recourse due to refinancing, so our second for $55k may come after us. We are waiting to see on that because our first and second are with the same lender. Also due to refinancing we aren't protected under the MFDRA so we will have to claim insolvency to get some tax protection. We will most likely still have to pay CA taxes.

So while I'm thankful to live in CA due to the one-action rule, and my first can't come after me for the deficiency, I still have other things to deal with. Not everyone in CA is able to walk away scott-free. Those of you who can should consider yourselves VERY lucky.

We will continue to stash our cash in our firesafe box. I leave enough money in to pay the bills. After the foreclosure is completed we will start paying down our larger credit cards. But we won't leave extra cash in our credit union account.

[kymburley]

Originally Posted by SlammyR

a bk is declared by an individual, not a whole family, so what is tied to your ss number is what is up for liquidation. please correct me anyone if i am wrong because i'm not sure about marital assets. but if you are not married yet, ornv3, i don't see how your fiancee's account can be touched.

I think this depends on your state. Washington is a community property state and the way I understand it is if I go bankrupt without my husband nothing will be solved, because my creditors will go after the marital community.

I'm meeting with a bankruptcy attorney next week to learn more precisely how this works.

[trappedincali]

My second is with Countrywide whom I believe is owned by Bank of America. I bank with BofA, but do not do automatic payments. I pay online from my BofA account manually. I wonder if they could attack my account on behalf of Countrywide.

-Lee

[spring23235]

so, I went to the back they said they can NOT stop my payments forever. and everytime I'll have to pay them $30 to stop a payment.
I asked how about closing the damn acount already? They said still it won't help and old account is going pop up ,and they can always withdraw by overdrafting it. I hate Bank Of America grrrrr bunch of slakers!! Finally I called Auroa and asked them to stop the autopay and they agreed. lets see what happens next...
next call I'm going to make to Countrywide wonder if they are going to agree? Yes,Countrywide is with BOA.

[Enough Already]

Trapped,
My attorney advised not to keep any bank accounts open that are with the same bank I've got the mortgage through. They can and often will take funds right out of your account without permission.

Spring,
I wouldn't bother trying to get the mortgage company to agree not to take the money from your account. If your bank won't help you either I'd close the account there and open a new one, at a new bank - one that has no affliation with the bank that holds your mortgage.

I opened new accounts all the way around - just to be on the safe side. Good luck!

[ORNV3]

I had auto payments for both of my mortgages. I just went down to the bank, withdrew all my money and put some in a new account at a different bank. I gave the rest to my fiance.

[Enough Already]

That's the thing to do. There's no way I would trust the mortgage company not to take funds.

[cactus77727]

And, with the increasing chatter about nationalization, the banks will soon all be government run. No thanks.

[Enough Already]

one should definitely talk to an attorney before making any moves.

by Jonathan Alper, asset protection and bankruptcy attorney, Orlando, Florida

One of my clients who has recently moved to Florida from Delaware suggested he could best protect his cash from creditors by depositing the money in his Delaware bank account. He claimed that a Delaware statute prohibited a creditor from garnishing any money in a Delaware financial institution. I know nothing about Delaware law, but this seemed too good to be true so I decided to check it out on my own time. I found a Delaware statute that states that no creditor can garnish money deposited in a financial institution in the state.(10 Del.C. § 3502.) I found case law as recent as 2007 that stated, “Under Delaware law, bank deposits are exempt, and any attachment directed at a bank is prohibited.” The cases explained that the legislature’s intent behind the statute was not to protect debtors from their creditors, but instead, to protect Delaware’s financial institutions from interruption of their normal business operations from creditor garnishments. I found no language in the statutes or cases that limited this protection to residents of Delaware, and if true, then a resident of any state could shield their money in a Delaware bank.


This seems too easy; maybe there is something I don’t understand about Delaware laws. If any reader of this blog post is a Delaware attorney, or otherwise is educated about this aspect of Delaware law, I would appreciate confirmation or an explanation. To me. this is an example of how state specific asset protection law can be. Each state has its own rules. If Delaware law does protect all bank accounts from garnishment a Florida resident should still speak with a Delaware attorney to make sure that their money is secure from creditors in a Delaware bank.

[spring23235]

umm so I've closed my bank account and I'm going to stop making payments from next month..
Any Idea how long I can live there without paying the mortgage.
ahh life........
BTW I ive in Richmond,VA

[Enough Already]

Where to put our savings....We'll be meeting in an asset protection attorney next week to find out what our best options are. We dont have many assets, but we want to protect what we have. He should be able to tell where to put our savings to keep them safe.

I'm curious to find out more about any protection offered by putting your money in a Delaware state bank account. I'll be sure to post an update after we meet with the attorney.

Spring,

You should definitely contact an attorney or google the foreclosure process and laws in your state. You'll want to get your ducks in a row as much as possible before your payment is late. Good luck!

[cactus77727]

And tonights friday theif in the night FDIC bank shut down is:

2/20/2009
The Associated Press: Small Oregon bank becomes 14th bank to fail in `09

Another one bites the dust...