At crossroads and going to play chicken with banks – long letter attached – any feedback/recommendations???

[rbolski_in_NV]

Is this too aggressive? Or just about right? Any other recommendations? Am I offering enough to settle? Do I have a chance - or does hell have to freeze over first? At this point they are asking 50% - 85% on 2^nd and 3^rd. My goal – avoid deficiency judgment. My case is business sense, but also adding some emotions and trying to pull on heartstrings. I only get one chance at this. Letter will be sent Friday morning (10/30/09).


Thanks!!!!!!!

================================================== ========

TO: National City Mortgage
National City Bank
Bank of America

RE: Time Sensitive: Short sale approval – and – full settlement requirement

DATE: October 29, 2009

I am writing in regards to my mortgage account I have open with the bank -- the pending short sale and my request to obtain a full settlement. I thank you in advance for the time and consideration. This request is time sensitive and I appreciate the expedited review.


WHERE WE STAND: At this point I have received approval to proceed with the short sale by the 2^nd (National City Bank) and 3^rd (Bank of America). I expect to receive approval by the 1^st (National City Mortgage) soon. The issue at hand is that each bank desires to retain their right to deficiency/collections. I can appreciate the banks desire to get full payment. I am flat broke and would find it very difficult to meet this request, and to be brutally honest, there is no benefit for me to do so. I have tried to work with each bank countless times, but to very limited success. I have a communication log that I have built over the past 10-months and it is 18-inches thick. Each party as a vested interest in this outcome and has money to lose. I am not going to simply move forward with the short sale and wait for the ax to come down on the deficiency judgments. I have a young family to put first. Each of you banks has contributed to the housing crisis that we are in – just as I have. The responsibility lies on each of our shoulders. I have not been bailed out yet like the banking industry. Each of you has received tens of billions of tax payer money. I need to settle my accounts today. I need to move on with life and want to go into 2010 with a fresh start. I will do that with or without your help. In basic terms - I am insolvent. That is the simple matter of the fact. I am not too proud to say that I need help. I take my share of the responsibility and the painful lessons have been learned. While we are victims in this situation, we also accept our responsibility as we understand that we have a role in this as well. Everything written above is what the business side of my mind is telling me. But the fact is that there is a family and a face to this problem and we are hurting. My 2-yr old son has been shortchanged the past 10-months and my wife and my relationship has been damaged. The financial toll pervades our family from top to bottom. We have been hit especially hard. I am asking for some compassion. I understand it is selfish on my part and I understand that I am asking for a lot. I regret that I am in this position and apologize to you.


WHY WE ARE AT THIS POINT: A quick recap of my hardship: My young family is financially, emotionally and physically ruined from this housing crisis. As we avoid foreclosure and seek a short sale we will be walking away from the house we physically designed and built. We also put a substantial amount of our own money into it. With 20/20 hindsight, we built at the very worst time in recent history (receiving our Certificate of Occupancy in December 2005). We designed the house, we acted as the general contractor, and we built a fantastic home with our own hands. It is the house that we brought our son home to (now 2-years 3-months). It is the house we planned on living in for another 10-years. However, the economy crashed and my job in the telecom industry put us in a tailspin. Our income is now less than 50% of 2007. I was unemployed from April 2009 – August 2009. I am now working in a new industry, learning a new trade and trying to stabilize. I cannot say that I see these financial difficulties getting better any time soon. I am trying to build a future for my family and I have to do everything in my power to do get this done.


We have three mortgages for a unique reason. As we neared completion of the initial construction and received our Certificate of Occupancy, interest rates were rising. We locked in our first with the house 66% complete and planned on using our 2^nd to finish construction. Our 2^nd at the time was through National City Bank. There were some accounting issues, which left our broker eating some money, so we opted to go to Bank of America for a 3^rd. As that 3^rd swallowed our construction expenses, we went back to National City and used that account as our 2^nd. That is why we unfortunately have three mortgages.


I can appreciate the difficult situation we have placed you in. We regret that we are in this position and do not find it to be right. We are financially ruined. We have no choice but to leave this house and we have come to grips with that. We are trying to do what is right to the best of our ability and our current situation.


MY OFFER: Here is the offer in full. Keep in mind that I am seeking full settlements. All 3 of you banks must agree or the alternative is listed below. As I said, we are financially exhausted. We are basically insolvent. However, family members have agreed to loan us money in order to achieve the full settlements and avoid the devastating affects of bankruptcy. They have seen the pain this has already caused our family and have graciously extended this offer. We need this financial crisis to end and you can allow this to happen. Very important is that this is also the right business decision for each of you.


In exchange for your agreement the following three items (in writing), your financial stake is listed below:
1.Release lien and allow short sale
2.Forgo deficiency judgment. Give up your right to pursue the deficiency and show the balance as $0
3.Report to the Credit Bureau "legally satisfied for less than the full debt - $0 balance"

• National City Mortgage:
  • You get what is listed in the HUD.
  • My personal calculations show that to be about $299,250 or 73% of the outstanding balance.
• National City Bank:
  • You get: $9,500 (or 28.8% of outstanding balance)
    • $3,000 from short sale via National City Mortgage
    • $5,000 cash (loan from family member)
    • $1,500 from government incentives
• Bank of America:
  • You get: $11,100 (or 20.0% of outstanding balance)
    • $3,000 from short sale via National City Mortgage
    • $5,000 cash (loan from family member)
    • $1,600 promissory note (payable in 5-years at 0% interest)
    • $1,500 from government incentives

ALTERNATIVE: If we can’t all come to agreement on this reasonable solution, I will be forced to towards declaring Ch. 7 bankruptcy. My wife is furious that I am considering this, but this is a viable alternative and I will keep it on the table. If it is the best solution for my family and ends this nightmare, I will do it. I already have a bankruptcy attorney and he has been in contact with your offices (xxx xxx with xxx & xxx > 775-xxx-xxx). If I go with this option, the consequences to each party are listed below.

• Ourselves:
  • We add a bankruptcy to either a short sale or foreclosure – depending upon when we file. It dings us more, but who really cares at this point. If we file Nov. 15^th, then the house will go through foreclosure and extends process out 6-months+. If we proceed with the short sale and then declare bankruptcy, perhaps we save ourselves a little bit of the impact on the credit. Either way, our credit is damaged. We will be able to rebuild it. Credit tomorrow won’t mean the same thing it does today. I find this option to be most irresponsible and outside my value system, but it allows us to move on with our lives and not have to look over our shoulders.
• National City Mortgage:
  • We will likely lose our short sale customer and you will have to proceed with the foreclosure. This would likely be stalled by 6 months with the bankruptcy. The carrying costs will quickly add up and the Reno market will continue to decline forcing the purchase price at auction to be much lower than the proceeds you are looking to get.
  • My estimates show that you would be lucky to recover $240,000 or 59% of the outstanding balance. Our Chapter 7 wipes out any deficiency.
• National City Bank:
  • Chapter 7 wipes out any deficiency. There are no estimates as the fact is you would get $0 or 0% of the outstanding balance.
• Bank of America:
  • Chapter 7 wipes out any deficiency. There are no estimates as the fact is you would get $0 or 0% of the outstanding balance.

I understand that my letter is bold in nature. But I think it is important that you know that you don’t hold all the cards. You can pull the short sale approval, but then you force my hand and the final outcome. If you don’t meet the settlement requested then I can chose to declare bankruptcy today or after the short sale. I have a hard time paying the cash to obtain the short sale if I am declaring bankruptcy on the back end. I would be much better suited filing on the front end. If I do that, we all lose in a big way.


CHAPTER 7 BANKRUPTCY IS A VIABLE ALTERNATIVE: I have attached our means test to show that I qualify. The biggest hurdle in bankruptcy is whether to file a Ch.7 or 13. We are insolvent and the decision becomes much easier. We qualify for Ch.7. This is great news for us. I want to avoid this route and I know you want as much of your money back as I can provide. I need for each of you to work with me to do this.


>>> Excel Graph showing Means Test and Qualification <<<


In closing, these numbers are difficult to swallow on either side. Looking at the numbers from a pure business standpoint, a short sale with settlement makes sense. It allows me to keep a little dignity and hopefully allow my family to recover in the next 5-years, it protects my neighbor’s equity and keeps them a little happier, and it provides each bank with a portion of the money owed. The alternative is a foreclosure and bankruptcy. In that case, there are no winners. Everyone gets hurt. You get less or no money. I hope you see that a short sale and full settlement is the best for all parties involved.

Let’s get this done. Please. I am finally at a place within each bank that decisions can be made. I have swallowed my pride and put my ego to the side. I am asking for your help. We would be appreciative of the compassion you show us. In addition, it really is the best business decision for all. I am asking you to remove that deficiency noose from our neck and allow me to build a brighter future for my family.

Have until x_Date_x to approve.

Thank you for your time, assistance and consideration,

[ama125]

I think this a very eloquently crafted letter. You state it all very well. Will they be inclined to agree...who knows! But I think you make your points with clear and concise detail with just the right emotional element. I wish you all the best! Good luck!

[grullagirl]

Very well done! I wish you the best of luck and know you truly have taken the high road regarding the situation. The course the banks take will certainly show their "true colors".

[windnwaves]

Excellent letter. I wish you all the best.

[HopingtoFind]

You have a very well written letter. But more importantly then what is in the letter is who is actually reading it. Make sure that it gets to the right person... send it to CEO/Executive department of each bank.
Keep in mind that 2nd generally settle for 5% to 10%.... our 2nd settled for 10% and 3rd should be lucky if they get anything.

Also, not sure why you're offering more to the 3rd... they are in weaker position then 2nd, so should probably get less... Best of luck.

[THANKS2U]

Personally, I would file chapter 7 BK

Do not file until you absolutely have to

In other words I would try to get a 2 % fixed 40 year loan with a principal reductiion.

Could you stay in your home at that 2 % Fixed 40 year at about 225,000.

If so GO FOR THAT Scenario as well !!

Drag this out as LONG AS POSSIBLE

Live there for FREE and pay NO MORTGAGE - Save your money in your parents or a friends account or better yet, a safety deposit box, etc...

Once you start the BK process Drag that out for at least a year and keep on Negotiating with the first to go to a 2 % Fixed with Principal reduction

Ask for the principal to be forgiven and if they will not then add the principal reduction as a balloon...

Bottom line take care of yourself as best you can legally..

With the negotiation process and the BK process being dragged out for as LONG AS POSSIBLE - like delay the court date a few times, consult attorney of course, you literally could stay in your home for 2 to 3 years WITH NO MORTGAGE PAYMENTS BEING MADE -

It is all a mind set at this point and your credit will bounce back in about 2 years--- And even if it takes the full 10 years SO WHAT !

At this point for you, it is all a mind game... A game you can win in the long run

[SillyWorld]

What I like is that its all the Truth...Something Many in our Country no longer have....

[rbolski_in_NV]

Originally Posted by HopingtoFind

You have a very well written letter. But more importantly then what is in the letter is who is actually reading it. Make sure that it gets to the right person... send it to CEO/Executive department of each bank.
Keep in mind that 2nd generally settle for 5% to 10%.... our 2nd settled for 10% and 3rd should be lucky if they get anything.

Also, not sure why you're offering more to the 3rd... they are in weaker position then 2nd, so should probably get less... Best of luck.

Thanks for feedback. I agree with you - the letter means nothing unless it gets to the right hands. I am battling to get the right contact at BofA. I have the ear of the 1st and 2nd, but BofA continues to be elusive. I am in contact with a lady in the Executive Dept that is helping get that person. I will chase down more contacts

I have already offered the 5% - 10%, but all that is getting me today is the release of the lien. Not the full settlement. I figure since BofA is being more difficult, I have to sweeten the pot for them just a tad bit more to match their ego. But I don't know that is needed.

[rbolski_in_NV]

Originally Posted by THANKS2U

Personally, I would file chapter 7 BK

Do not file until you absolutely have to

In other words I would try to get a 2 % fixed 40 year loan with a principal reductiion.

Could you stay in your home at that 2 % Fixed 40 year at about 225,000.

If so GO FOR THAT Scenario as well !!

Drag this out as LONG AS POSSIBLE

Live there for FREE and pay NO MORTGAGE - Save your money in your parents or a friends account or better yet, a safety deposit box, etc...

Once you start the BK process Drag that out for at least a year and keep on Negotiating with the first to go to a 2 % Fixed with Principal reduction

Ask for the principal to be forgiven and if they will not then add the principal reduction as a balloon...

Bottom line take care of yourself as best you can legally..

With the negotiation process and the BK process being dragged out for as LONG AS POSSIBLE - like delay the court date a few times, consult attorney of course, you literally could stay in your home for 2 to 3 years WITH NO MORTGAGE PAYMENTS BEING MADE -

It is all a mind set at this point and your credit will bounce back in about 2 years--- And even if it takes the full 10 years SO WHAT !

At this point for you, it is all a mind game... A game you can win in the long run

I'm with you on dragging it out and trying to position myself on the back end. I am blessed to have a strong/supporting family and already have a house under contract via them to live in. If we decide we eventually want to purchase it we can, or they will just keep it and rent it. We have our next step planned out.

I tired the modification with the 1st. After my 4th attempt they finally approved it, but it only lowered payments about $250 per month and it was a tiered increase back to the current APR over the course of 5-years. Too many people are going to take this route and just delay the foreclosure by 3 - 5 years. I know we have to leave and am trying to do it as best as possible today.

I just want this to end and move on with life. But, I think you are right about bk. As much as I hate it, I might just need to leverage it and drag things out more. Perhaps file and withdraw. If dismissed with prejudice all it means is that I can't file for 6-months. Not the end of the world. Perhaps it will put the banks in gear to negotiate and get this done. If not, then file for real in 6-months.

I am trying to do the right thing, but the banks make it difficult.

[HopingtoFind]

Originally Posted by rbolski_in_NV

Thanks for feedback. I agree with you - the letter means nothing unless it gets to the right hands. I am battling to get the right contact at BofA. I have the ear of the 1st and 2nd, but BofA continues to be elusive. I am in contact with a lady in the Executive Dept that is helping get that person. I will chase down more contacts

I have already offered the 5% - 10%, but all that is getting me today is the release of the lien. Not the full settlement. I figure since BofA is being more difficult, I have to sweeten the pot for them just a tad bit more to match their ego. But I don't know that is needed.

rbolski_in_NV..... there is a thread on this forum on BofA Short sale that has high level contact information. Search for it, you should find what you need.... at least for BofA.

[THANKS2U]

Originally Posted by rbolski_in_NV

I'm with you on dragging it out and trying to position myself on the back end. I am blessed to have a strong/supporting family and already have a house under contract via them to live in. If we decide we eventually want to purchase it we can, or they will just keep it and rent it. We have our next step planned out.

I tired the modification with the 1st. After my 4th attempt they finally approved it, but it only lowered payments about $250 per month and it was a tiered increase back to the current APR over the course of 5-years. Too many people are going to take this route and just delay the foreclosure by 3 - 5 years. I know we have to leave and am trying to do it as best as possible today.

I just want this to end and move on with life. But, I think you are right about bk. As much as I hate it, I might just need to leverage it and drag things out more. Perhaps file and withdraw. If dismissed with prejudice all it means is that I can't file for 6-months. Not the end of the world. Perhaps it will put the banks in gear to negotiate and get this done. If not, then file for real in 6-months.

I am trying to do the right thing, but the banks make it difficult.

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You have A house under contract to live in ? What does that mean ??

Are you saying the bank and you have a contract for you to RENT YOUR OWN HOME FROM THE BANK AFTER THEY FORCLOSE ? Explain please

You are trying to do the right thing ?

There is NO RIGHT OR WRONG in this market and in this backstabbing Mobster Banking Institution Economy.

There is only the mindset that the banks must help us all and if they do not help you, then drag your feet, mortgage free, for ALAP / As Long As Possible.

There is NO REASON not to get into the mindset of moving on with your life by saving YOUR MORTGAGE MONEY ... Moving on while you are Staying in your house mortgage free with the moving on process.

Definately move on in yoru mind, move forward, but do it YOUR WAY not the banks way.

Keep on negotiating and negotiating and stay in your house for ALAP, mortgae free and save your money.

Negotiating and Negotiating and saving your money, is the true way of moving on, without getting screwed over by the banks.

Always have back up plans of course, in case they manage to foreclose, but the chances of the bank actually foreclosing while you occupy the house and are negotiating on your own with bank and or have a free service company like NACA or any other HUD approved agency helping you to stop forclosures and also going through your BK, which automatically stops all foreclosure process, until the BK is discharged, are very slim...

Simply follow all your legal rights to stay in your home and prevent them from foreclosing until YOU DECIDE that you could care less that they forclose, as you have saved enough money to make it worth your while to move on when you want to move on and out of the home, in peace and stength, not in desperation and weakness, forced upon you by these Banking Monsters / Mobsters

Much success

[rbolski_in_NV]

Originally Posted by THANKS2U

----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
You have A house under contract to live in ? What does that mean ??

Are you saying the bank and you have a contract for you to RENT YOUR OWN HOME FROM THE BANK AFTER THEY FORCLOSE ? Explain please

You are trying to do the right thing ?

There is NO RIGHT OR WRONG in this market and in this backstabbing Mobster Banking Institution Economy.

There is only the mindset that the banks must help us all and if they do not help you, then drag your feet, mortgage free, for ALAP / As Long As Possible.

There is NO REASON not to get into the mindset of moving on with your life by saving YOUR MORTGAGE MONEY ... Moving on while you are Staying in your house mortgage free with the moving on process.

Definately move on in yoru mind, move forward, but do it YOUR WAY not the banks way.

Keep on negotiating and negotiating and stay in your house for ALAP, mortgae free and save your money.

Negotiating and Negotiating and saving your money, is the true way of moving on, without getting screwed over by the banks.

Always have back up plans of course, in case they manage to foreclose, but the chances of the bank actually foreclosing while you occupy the house and are negotiating on your own with bank and or have a free service company like NACA or any other HUD approved agency helping you to stop forclosures and also going through your BK, which automatically stops all foreclosure process, until the BK is discharged, are very slim...

Simply follow all your legal rights to stay in your home and prevent them from foreclosing until YOU DECIDE that you could care less that they forclose, as you have saved enough money to make it worth your while to move on when you want to move on and out of the home, in peace and stength, not in desperation and weakness, forced upon you by these Banking Monsters / Mobsters

Much success

Damn you! I go back and forth on this.

I keep trying to talk myself into dragging this out another year or two and like you said, put the money in a safe place. Quite honestly, I don't know that the amount of money is worth it. While our despair is not as "deep" as portrayed in the letter, this process has taken its toll and it gets old. I realized from day 1 that this was a business decision and have approached it that way. However, the better half of me, my wife, looks at our home a different way and this has a been a difficult process for her.

I should have clarified more on our next step. We have leveraged my parents to purchase a house in their name as an investment property. It is a short sale and should close in the next 90-days. It is a fantastic home and one that we would be happy to call home for a long time. We will rent from them with the option to buy. The loan being sought is transferable. If we go this route, we are set. If we decide to do something else, then they will just rent the place as it will have positive cash flow. This is not a done deal, but looks pretty good.

I go back and forth on what doing the right thing is. I am responsible for the situation my family is in and I will own up to that. Who I am and my value system says that I need to attempt to do what it right and make adequate amends. That said, I understand that no one is going to be patting me on my back in 3-years saying I did the right thing. No way no how am I going to saddle my family with a large debt. I don't have a problem of repaying the bank a portion of the money I owe them. But, I know that they are a leading reason that I am in the financial mess I am today as well.

I'd be happy to walk away from this mess break even and be able to continue life. We have saved the money each month that we did not make our mortgage payment (now 11-months) minus expenses covered while unemployed for a few months, and can use that to settle. Some cash would come from family to settle. I'd hate to declare bk, but it has to remain an option on the table.

Thanks for the feedback and challenging my direction.