Orange County Foreclosure

[swhite005hb]

Paid $463,000 for condo in 2005.
Condo is primary residence.
Mortgage is 80/20, with 20 being HELOC.
No refinancing and all HELOC was used towards purchase of house.
Loan/Deed is in my name only, not wifes.
No missed payments or hardships.
Condo current value is $325,000-$350,000.

We never had the opportunity to refinance because the market crashed shortly after we bought. This condo was an investment we were going to use to eventually get into a property we couldn't initially afford.

We are seriously looking into foreclosure because we have been living paycheck to paycheck and do not see a light at the end of the tunnel.

1. Based on my scenario, will both loans be forgiven due to CCP 580b?
2. If I foreclose, shoud I continue to pay property taxes?
3. What is your opinion on using a resources such as youwalkaway.com ? Would it be less expensive to find an attorney to review my documentation? What does that typically cost?

[slojj]

Hey, if it makes you feel any better I am in a similar situation.
I purchased a brand new residence (track home)for 338,000 in Aug. of 2005.(slo county) The loan was a 80/20. (80 with CW and the 20 HELOC with Wells) Both loans were fixed terms.
All of the loan was for purchase money only. No refinance.
The loan is in my name only and the title is in both my wife and I.
I don't have any outstanding hardships but we are living pay check to pay check. I already cashed out a Roth IRA to help pay bills.
I would estimate the current value of my house at about 225K. There has been two houses (same floor plan) down the street for 225K the past six months. I believe they are short sales or foreclosures.

Here are my plans:
1) attempt a short sale- I am using a real estate law firm who only collects money if the house is sold. I am currently turning in paper work for this process. I think I will get denied due to no late payments, no hardships and I have a fair amount of money in savings.
2) Loan modification on my terms only. I will offer Wells Fargo a payoff of 10% of my current balance. (approx. 5,700)
Request that CW either drops my interest rate to 4.25 or a principal reduction from 257k to 225k.
This prob. wont work either but I have nothing to lose.
3) Foreclose. Live mortgage free for six months, pay off a car and drop what turned out to be a bad investment. Start over.

[slojj]

To answer your questions:
Stop paying property taxes if you are planning on foreclosing.
Talk with a lawyer regarding your loan paperwork. Unsure how much this will cost but prob. $100.
I would guess that your loans are non recourse.
There is a lot of good info on this website. I learn a lot within the last week.

[swhite005hb]

I have learned a tremendous thanks to this website. I was told not to bother with the short sale or loan modification. By the time the assistance is available for those in our situation, it will be too late. I was told by a HUD debt counselor that the banks will not even consider your request unless you are already in foreclosure. It's too bad that we are trying to do the right thing, but not getting any help.
I am trying to get ahold of an attorney now to go over the loans before the foreclosure process.
Thanks for your input!

[swhite005hb]

I got ahold of a Real Estate Attorney and scheduled an appointment. He requested $250 for the consultation, does that seem reasonable?

He mentioned that purchase dates were important due to recent legislation. He wouldn't ellaborate because he wasn't on the $$$ clock. Does anyone know what he is referring to and would our purchase in 2005 be applicable?

[The Professor]

Snow White asks:

1. Based on my scenario, will both loans be forgiven due to CCP 580b?
Based upon your statement of the facts, your loans appear to fit the definition of "purchase money" and would be characterized as "non-recourse" under CCP Section 580b. However, as I always do, I suggest that you have an attorney skilled in real estate law and debt collection practice review your purchase and loan documentation to confirm their non-recourse nature.

2. If I foreclose, shoud I continue to pay property taxes?
I would suggest not paying them if you are planning to walk. However, you should pay the HOA dues because you are personally liable for them.

3. What is your opinion on using a resources such as a company ? Would it be less expensive to find an attorney to review my documentation? What does that typically cost?
I would suggest avoiding these services and follow my suggestion in the answer to your first question.

Take care

Daniel

[925girl]

Lots of predators out there. I think you can walk away w/out them. You might consider paying a real lawyer or CPA. I think those outfits are stuffed with out of work mortgage brokers scamming. Don't take my word it's just an opinion.