Saxon Mtg. not willing to negotiate

[robin3350]

Hi - First time to ever post to a forum but we are in that state of depression that sets in right after denial is no longer an option.

Our home is in Placerville, California (Sierra Nevada foothills). It is a modest 3 bdrm. 1.5 bath 1950's ranch house sitting on an awesome piece of property with a phenomenal view. We paid $325K for it in 2004. Almost overnight the appraised value jumped to $485K........ details of loan and our situation follows:

We have an interest only loan through Saxon Mtg at 8.6% for $436,000 which adjusts in February 2009 (6 pt. margin). The reason for the high interest rate is we didn't have perfect credit, husband is self-employed and used stated income. Our previous loan on the house was also with Saxon. After two years it adjusted to a payment that was 50% higher than the original payment. We made the mistake of pulling out equity for home improvements and ran our loan up from $312,000 to the $435,000 thinking the golden age of real estate in California would last forever.

Shortly after closing on the new loan, I got sick and eventually have been retired due to disability. Fortunately, I had paid for disability insurance through my employer and receive $3100 a month until I turn 66. I am currently 56. Since my medical insurance converted to COBRA we have had to pay $989 a month plus around $600 in co-pays for my monthly medications. Additionally, the income is taxable. So the $3100 turns into about $1000 usable quickly. We started using my 401k to make some of the payment each month until the $27K I had was gone. During this time, my husband was working 7 days a week at his HVAC business trying to keep us afloat. As a result, he injured his neck and after many procedures, etc. the leading spine specialist with UC Davis Spine Center has determined the only thing that will get him back to whole is a complete cervical disc replacement using a new artificial disc. Downtime will be about 4 months.

Now back to Saxon .... in February of this year, they notified us that they had paid our taxes since we had failed to do so, an impound account for taxes had been established and our loan payment was going up about $800 a month ... (from $3100 to $3900) to cover the tax advance as well as the future tax bills. We explained our situation and asked if they could please hold off on that and help us through this tough time. They said they could spread the repayment out over 12 months thus lowering the payment to $3700. We couldn't come up with this much each month since we'd used up our savings, my 401K, and all of our credit card lines and quit making payments in March.

Following this, I spoke several times with representatives from Saxton's collection department who explained we had to be 3 months behind on our mortgage before any adjustments could be made other than add the arrears plus charges to the monthly payments until we "caught up". It felt like I was talking to a brick wall when explaining why this wouldn't work. As many have reported, once the 3 month time period is up, Saxon files a notice of foreclosure. Ours was filed June 11, however, we didn't receive the notification for about 2 weeks.

Forgive me for rambling but I'm trying to make sure I tell it all. Sometime around the first part of June, I called the Hope Now people using the link on the Saxon payment website. The gentleman was very nice and said given the fact that we had made our payments on time for 3 years and wanted to keep our home, that the circumstances causing the delinquency were temporary and could be documented that he would submit a recommendation to Saxton suggesting they negotiate with us. He indicated we would hear from Saxton within 14 days. During that 14 days is when we received the Notice of Foreclosure (I'm sure it was coincidental - but still ironic). We never received the promised call and when I tried to call the Hope Now number again, I was told to leave a message and our rep would call back. This never happened either.

Today, I finally called Saxon again. The person I spoke with was condescending and said we'd have to send in a financial package. I lied and told him we'd sent one in 4 weeks ago and hadn't heard back. He indicated it had probably been lost. He took the time to take the financial statement information and concluded that we were about $800 a month short of being able to make the current payment and that therefore Saxon would not be interested in negotiating with us. I asked why the Hope Now solution hadn't been followed up on. He explained that their office was at Saxton Mtg.. and that the intake persons info was probably reviewed and "someone" decided there was nothing that could be done. He told me not to worry about having to move right away since a sale date hadn't been entered yet. He suggested I could call their attorneys (Quality Loan Services) to find what the sale date schedule was. When I explained our property would currently be worth about $225K, he replied that it was easy to see why the banks were having so much trouble (????)

Since this call, the Irish in me has awakened. Would it work to stall the foreclosure, if I file for a Chapter 13 bankruptcy? Is it true that the mortgage company has to cancel the foreclosure and accept a repayment plan for the arrears and reinstate the mortgage to a current status?

If this is true, would it then be possible to either make no payment or one and then default again? When the next notice of default was entered, could my husband then file Chapter 13 and once again delay the foreclosure. At the end of this period and shortly before the filing of the Notice of Default once again, could we then file a Chapter 7 and delay the foreclosure another 6 months?

Sorry, but I feel no remorse for making it as hard as possible for Saxon to complete its foreclosure.

One last grumble......am I missing something, but are all the gov't loan bail-out programs helping all the businesses etc and not helping the individual home owner's at all? Is there anything in the channel to actually help out the home owners?

Thanks for "listening".

Robin3350

[schwefls]

Hi Robin welcome to our forum:

I wanted to stop in say hello and assure you, you are not alone. Shortly someone will be reaching out to you with some sound advice/suggestions. In the interim please hang in there and know that we are here for you.

[Moe Bedard]

Hi robin3350,

Welcome to the forum and thank you for joining.............


If this is true, would it then be possible to either make no payment or one and then default again? When the next notice of default was entered, could my husband then file Chapter 13 and once again delay the foreclosure. At the end of this period and shortly before the filing of the Notice of Default once again, could we then file a Chapter 7 and delay the foreclosure another 6 months?

Once an NOD is filed.........you would need to pay the entire default amount and fees that are due...........so one payment will not keep a foreclosure from moving forward..........you will have to consult with a BK attorney to find the answer to what you are proposing here as they would be in a position to tell you exactly what to do for this path...........



One last grumble......am I missing something, but are all the gov't loan bail-out programs helping all the businesses etc and not helping the individual home owner's at all? Is there anything in the channel to actually help out the home owners?

The bail outs are not homeowner friendly...........they make the criteria too far out of reach of the homeowners in these situations..........there is an expansion waiting for the President's signature................he said he won't veto it.........

here is the thread on that............see if it might help you...........

Final Housing Bill Passes House, Bush to Sign into Law

[robin3350]

Hi, Wow... thanks for the speedy response. Is there any hope for getting something worked out with Saxon? The paperwork we've received shows that Deutsch Bank now owns our loan. Should we have been told somewhere along the line that the loan had been sold? Is there any point in talking directly with Deutsch and if so, does anyone know a contact number for them? Sorry to have sounded so negative in the first post.

[Moe Bedard]

Your post wasn't that negative...........

In answer to your question..........Deutsch Bank is the investor on your loan and Saxon is the servicer...........and as the investory Deutsch Bank does not deal directly with the public..........that is what they hire Saxon to do.......so they won't even speak to a customer directly it is all done through Saxon.........

What I would suggest is to have the meeting with the BK attorney so you have your options laid out in front of you and then you can make an informed decision about what the next best step is for you.........

[robin3350]

Hi ***. Since last post we have retained a bankruptcy attorney who has informed us that if we convert the home to a rental property that the bankruptcy court can order Saxon to adjust the loan amount to the current market value on the home (from $435K down to around $270K) and set a reasonable interest rate fixed for a period of 3 years. At the end of the three years, we would need to refinance or sell. We would only owe the new loan amount. He explained the the BK laws are different for investment property than they are for residential and that more can be ordered by the BK court for an investment property. We live in California and since SB 1137 only covers owner-occupied situations we are in a bit of confusion. We don't know whether to wait for Saxon to contact us to negotiate modification or move out of the house and turn it into a rental property. When I called the substitution Trustee (trustor?) (Quality Loans) this week they told me that the Trustee Sale was on hold because of SB 1137. He had no idea how long it would be on hold or what would happen next. Any ideas? The NOD was filed 6/11. Thanks, Robin3350