I have read many of the posts regarding CalHFA and their unwillingness to work with you until you are several months behind. I have seen some posts of folks who are attempting to work with CalHFA or who are "walking away" because they cannot seem to penetrate CalHFA's methodology. What I have not seen is anyone who actually has worked things out with CalHFA whether through a modification, forbearance/repayment plane or a short sale. I will soon fall into the category of folks who CalHFA would rather foreclose on than work with, here is my story:
So what is a guy to do? I want to keep my home even though it is upside down by $200,000; I know morality shouldn't have a place in these business transactions but for me it does. I want to pay all my outstanding debt to CalHFA over a 24 month period instead of an accelerated 10 month period because that is economically unfeasible and will significantly increase the likelihood that I will be put into an untenable situation during the summer when my income dips.
- My wife and I purchase a home with CalHFAs help, $400,000, with 7.5% down at the top of the market in 2007.
- In the ensuing years we find out that my wife will require significant medical procedures that amount just under $30,000 and the house will depreciate to 50% of its original value by 2009.
- In additional to the medical costs that we start accumulating in 2009, we have over $10,000 in revolving debt.
- In August 2009, the combination of the medical bills and revolving debt becomes too much and we fall behind.
- In September 2009, we advise CalHFA we need help (we had actually done this in August also, however we are advised that until we are further behind they cannot do anything).
- In late October 2009, we contact CalHFA and request a loan modification.
- In November 2009, we submit our first modification request. It is lost by CalHFA (they have yet to find it - yea! our financial information is now being sold to the highest bidders from Kerplatistan).
- In December 2009, second modification request is completed with a supporting letter from Clearpoint (HUD approved); we are sent a denial at the end of the month. CalHFA states that they do not have any access to federal funds like other banks do, due to their unique financial status (bond funded?) and are not taking part in any federally funded aid mechanisms. They also let us know that our medical expenses are not considered necessary and as such will not be considered as part of the modification thereby resulting in the denial.
- During the period from August to December we are consistently paying down our debts - our jobs are still secure and we want to do the right thing.
- At the end of January, they file the notice of default. This is sent to us via regular mail and certified mail.
- In January 2010, we start working with their asset management group i.e. lawyers/risk managers. They propose we complete a Borrower Financial Information sheet so they can better help us assess options. We complete it and send it back in early February - by this point we have cleared all of our revolving debt and have cleared most of our medical debt. In hindsight this is a mistake, as they continue to use to tell us what we can do financially with looking at the practicality of what they are asking.
- In February 2010, they tell us that they want twice our monthly mortgage amount monthly leaving us with roughly 1,250 to live on until they loan become current which will be roughly 8-9 months due to the attorneys/late fees they have assessed. The problem with this is that we both travel quite far to get to work and I am driving a 94 Accord which is on its last legs.
- In March 2010, we respond that we cannot see how that will be feasible as our income decreases during the summer and we will need a car as soon once our Accord dies. We submit a proposal to CalHFA to immediately begin paying our mortgage at 120% through the end of summer then up to 150% thereafter until everything is current. In March 2010, the Director of CalHFA announces that they will receive $700 hundred million dollars from the feds to help people stay in their homes.
- In April 2010, we are advised that we must now pay over $11,000 immediately along with 170% of the mortgage each month if we don't want to have the house go to Trustee Sale at the end of the month and auction 20 days later. They have been keeping tabs on our bank accounts and know we have cleared all of our debts and are holding car money.
I have two weeks. They have not talked to me about short sale, though I will call them tomorrow to find out if that is an option. They simply will not budge; they want their pound of flesh. Should I contact their director, their board, my legislators? Any advice would be appreciated.