House just went into foreclosure w countrywide

[cruz5010]

Hello everyone, back in 2004 I purchase the house of my dreams in a nice neighborhood and price was right. In 2005 I refinance and took a Interest only loan and boost up my mortgage paymnt from $2700 to $3400 a month with an interest rate of 6.5. On top of that I took out a home equity loan for 35k at 14.7 interest rate. My financial situation decrease, went thru rough divorce and lost my ex husbands income, now i'm a single mom w 2 kids and w a high mortgage payment that I cant afford. I fell behind on the loan December of 2007 and I just received the foreclosure papers. The bad news on this is that the house is under my mothers name i'm on title also but its her credit. She has no idea whats going on. I dont want to lose my house. I have been trying to work out a short sale with the bank and putting the house undr my name but countrywide just informed that family members can not buy the short sale. I dont know what my next option is. Not sure if I want to do a loan modification because w the home equity loan I owe my house 487k and the house now is only worth like $410k. I dont even know where to start any ideas would help. I make around 72K a year and my credit is low 700's.

[schwefls]

Hi cruz5010:

Welcome to our fourm. 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.

[Dan Bailey]

Hang in there Cruz!!!

[Moe Bedard]

Hi cruz5010,


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

You might want to wait until October 1st when the new FHA guidelines come out and see if you can qualify for an FHA loan in your name at that time......but you might have to leave your mom on the loan too.

Here is the link to the info about it and also on FHA's website you can search for and FHA approved lender in your area............

FACT SHEET: FHA TO PROVIDE ADDITIONAL MORTGAGE ASSISTANCE TO STRUGGLING HOMEOWNERS

[cruz5010]

I dont think I want to refinance because the value is not there. any advice on a short sale? what other options do I have? If maybe I can get rid of my 2nd mortgage with HSBC, and maybe i can just keep the one w countrywide for $450k.

[faith]

Originally Posted by cruz5010

I dont think I want to refinance because the value is not there. any advice on a short sale? what other options do I have? If maybe I can get rid of my 2nd mortgage with HSBC, and maybe i can just keep the one w countrywide for $450k.

__________________________________________________ ______________

Good morning Cruz5010,
Peace be with you. I hate to tell you this but Countrywide Home Loans as they have already told you doesn't do Short Sale to family members and relatives, as the same if you work for a company where they prohibit hiring employees related to one another which is called nepotism. Unfortunately, the only option you have is your mom asking for Loan Modifications, or her doing Short Sale. I've tried that with CW and they denied that, actually I've tried everything with CW but all denied but they approved my Short Sale. Please see below if your mom and you have decided to do Short Sale.

Here's how Short Sale works:

1) Hire a real estate agent that knows how to do Short Sale, check bbb search to get a good real estate agent. Your agent will put in MLS listing and the flyer Short Sale "Pending Approval of the Lender). You can find out from your lender through their website their process of doing Short Sale. Your agent will prepare a Short Sale package once you get an offer from a buyer. Make certain the lender will consider accepting a short sale offer. It's a good idea for you to talk to your lender your desire to take this approach early in the process. Lenders do not have to approve short sales. They can choose to start foreclosure proceedings if mortgage payments are unpaid or late so you are best off knowing whether they are willing to consider this option before investing too much time in it.

2) List your home with a below market price to attract a buyer in a "short" amount of time. Find out from realtors.com or zillow.com how much the selling price in your area, for example if the selling price is $140k, you have to lower that amount down to $135k to attract a buyer. Without a buyer there is no short sale. Time is against you if your goal is to be relieved of the debt before foreclosure proceedings evict you or compel you to file for bankruptcy so be aggressive with the listing price. You need to give a Letter of Authorization giving permission to your lender to talk to your agent.

3) Once you get an offer your agent will submit the Short Sale package, including the buyer's offer to the lender. Along with the fully executed contract submit the following documents in this package. Include listing contract, days on market over 90 is good, closed comparables that support the price offered and a net worth statement from the sellers, HUD1 form, your agent knows what HUD1 is for. You need to write a hardship letter explain why you are unable to pay the loan and you want to work with the lender by doing short sale. enclosed pay stubs. You as a seller has to prove there is a hardship and unable to make payments due to loss of job, disability, etc. If you have other liquid assets equal to what you owe, your lender willprobably not to accept the short sale.

4) Once the lender receive your request with your buyer's offer, you will be assigned a Negotiator. That Negotiator willl order an appraisal or Broker's Price Opinion (BPO). This is usually conducted by a real estate agent and submitted to the lender. The purpose of the BPO is to determine the property's fair market value.

5)The lender has the final say on approving the sale, in Short Sale you are at the mercy of the lender. It takes 4 to 10 months to approve a Short Sale.

Doing a short sale is hard enough, it's a long process, you have to be strong, persistant and patient and always emailing your agent and Negotiator. I feel your pain, you need the cooperation of the first lender,and the second mortgage holder needs to release that loan too.

Actually the success of the Short Sale is having a right attitude, the right seller's agent, the right Negotiator and the right buyer and his/her agent.
In Short Sale you as a seller don't pay your agent's commission, your lender will pay your agent their commission, and depending on the agreement before approving the Short Sale, your agent should negotiate to your lender that you don't have to pay the Seller's Closing Costs, and your buyer's agent will tell your buyer to make an extra offer to include their closing costs. Like in my case, my agent negotiate with my lender that I don't pay any closing costs and my buyer offer $8k extra to cover their closing costs, I was selling my house for $290k and they made an offer of $298k which is an extra $8k to pay for their closing costs.

If you are to pay the closing costs, here's the scenario I would like to give to you:
Let's say that your closing costs are 5% or $6750. After deducting the closing costs from the sales price of $135,000, you will have about $128,250 left. Now it becomes a tug of war between the two lenders.

Generally, the first negotiation is to offer the second lender a small amount, say $1,000. Now, that might not seem like much when compared to the second loan balance of $63,000 because you're asking the lender to lose $62,000. On the other hand, however, if the second lender refuses, it may ultimately get nothing.

Sometimes, that 2nd mortgage or we called junior lenders didn't want to work with the 1st lender. But this is where the first lender can give up a little more to make the deal work. In my experience, my loan was with the same lender but the 2nd mortgage has PMI without my knowledge. It took 3 months for the 1st and the 2nd to agree and disagree. First I offered to buy out the 2nd mortgage and I've offered $3,000 to get the 2nd mortgage out of the way, Countrywide Home Loans didn't want me to do that, they want to buy out the 2nd mortgage so they can claim the whole losses in 1099 because they knew they can not get anything from me besides, I am protected by CA Civil Code Section 580b, never refinanced and I had a Purchase Money Mortgage.

The 2nd mortgage finally gave up when Countrywide Home Loans offerred to buy them out for
$20k, so I was lucky because I kept saying no, I will not sign the promissory note, I threatened to file Bankruptcy and told them to foreclose the house. I told them they have to accept the offer as soon as possible before the selling prices goes down, and it went down big. We closed escrow on 07/09/08 for $298k, my next neighbor foreclosed their house and was sold on 07/14/08 for $229k and now the selling prices is down to $189k same size as mine.

Most lenders in first position are happy to receive at least 90%, which would mean on an $135,000 loan, the first lender might agree to take $121,500.

If the net is $128,250 (if you pay the closing cost), that would leave $6750 that the first lender could offer to the second lender. The second lender must agree to release the loan. If not, the short sale will be denied, and the first lender will most likely get the property back in foreclosure, eliminating the second loan.

You need to act fast if you want to do Short Sale, your agent needs to keep negotiating until a resolution is reached. Remember, both the first and second needs to work together so the short sale work. I have prayed a lot and asked all my friends and churches in our area to pray for me that God will give us favor and the right people to have our Short Sale approved and He did. Thanked God and again I thank loansite.org, I thank Moe, ***, Professor Shays and Andrew they have given me information, help andtricks on how to email my lender.

I pray that everything will workout for you too.

God loves you and God bless you.

Hope this helps....

Faith

[cruz5010]

The problem here is that I want to keep my house. I dont want to list it w an agent and give it to a stranger. I want my house.

[Moe Bedard]

Cruz,


After reading over your loans, you would not qualify for the FHA because you have a second on the property...............

The second mortgage with HSBC isn't just going to go away..........you can see if they can modify the rate by calling and asking what the options are from the investor on your loan...........

HSBC
Default Resolution Team
1-888-648-3124

and also call Countrywide to see what options they have as well............

1-800-669-6650

[faith]

Originally Posted by cruz5010

The problem here is that I want to keep my house. I dont want to list it w an agent and give it to a stranger. I want my house.

__________________________________________________ ______________
Cruz,
Good morning again.

I can feel your pain, believe you me. I was in the same situation as you are because my husband and I bought our dream house too. We have put all our equity, retirement money and our life savings to our house. We told our self no one can get this house from us, we love our house so much. But I lost my income when an uninsured driver hit me and became disbled for many months. We hold on and hold on thinking my husband still works and we have our equity from our old house and we have our 401k's, the money and savings, retirements we have will last for 2 years, we thought.

My co workers and friends told us to sell the house while we still have equity on it, but we did not listen, we were proudful and at the same time we were crying inside. We were thinking the economy will pick up, home prices will go up and I will find another job again. But the reality is it didn't, I could'nt find a job and during my disability, my husband retired. Sure we probably have about 4 months of savings left, but I know that money too will be gone and I ddid't want to lose my house and lose all our 4 months savings left. We have to be realistic and accept the fact, that our life is very important than losing a house, our life is more important than being fearful and worried to death. With all the stress of losing my house to foreclosure and the feeling the shame when the Sheriff knock on our doorsteps taking over the house, we decided to let go.

We put our house in the market, 6 months came by, and 6 buyers back out citing long process with CW and the listing expired. We have listed it again, thanked God to loansafe.org, and to ***, Moe, Professor Shays and Andrew for all the tips, insights and informations how to deal with CW, Actually, I was the same adamant person kept bugging Moe, *** and Professor Shays and Andrew, I want to keep the house even though we have moved out of the house. But Andrew told me that I have to accept the fact that I cannot afford the house with our retirement income. So that woke me up. CW finally approved the Short Sale which took them 4 months to approve it and another 1 month and 10 days to close the escrow.

I am telling you my story to hope that it will help you. If not, then you have a lot of things to deal with. First and foremost, you need to tell your mom what's going on since her name is in the loan and her credit will be affected if this house foreclose. You need to say I am sorry mom, I didn't know that this thing will happen, you have to deal with the heart issues first, especially family, that's more important.

Second, I could see that your situation falls on the extenuating circumstances because of your divorce. Write a financial hardship letter to CW and tell then because of your divorce it really affected everything. There's a example of Hardship letter to your left which is colored blue in the Homeowner Tool Box which will give you an idea how to write a financial hardship letter. Do it fast, attached your pay stubs, copy your divorce decree, bank statements and fax it, email it and mail it via certified letter to CW.

I am very sorry for what you are going through right now. I hope and pray that God will give you favor from CW, investor and negotiator. May the Peace of God that surpasses all understanding will guard your heart and mind through Christ our Lord.

God bless you always and your family too.

Sincerely,
Faith

[cruz5010]

***: as per the HUD guidelines it states below 2nd mortgage will be extinguish...

Features of FHA-insured loans under the new program include:

• 30-year, fixed rate mortgage;
• Maximum 90 percent loan-to-value ratio;
• No prepayment penalties;
• $550,440 maximum mortgage amount;
• Extinguishment of any subordinate liens; and
• New home appraisals from FHA-approved appraisers

[Moe Bedard]

It is not meant the way you might be thinking..................

This is what the actual bill states............

Existing Subordinate Liens. Before participating in this program, all subordinate liens must be extinguished. This will have to be done through negotiation with the first lien holder.


The bill calls for the seconds to be taken care of first, before getting the new loan.........
also one other glitch that you might run into is if your mom owns another property that she lives in.............if this is the case, then this property would be considered an investment property and not a principle residence for her............

[cruz5010]

no my mom does not own anothe property..

[Moe Bedard]

That is good then............call Countrywide at the number above and see what options the investor on your loan has..........

[GilbertB]

Hi Cruz,

You have a couple of different options. The most important thing is to let your mother know whats going on. Then once you get through this to have a credit attorney work on removing the mortgage lates/short sale/foreclosure. The idea way would be to modify both your 1st and 2nd loans. If you could get a 5.5% on the first and 6.5%. I don't know what your loan amount are but that could help tremindously. The other option is to see about discharging the 2nd through BK. Ofcourse your mother would have to file and you would need to consult a BK attorney in that regard. Good Luck and please keep us posted on your progress.

[Jaime Cuamatzi]

Hello Cruz,
I agree, first and foremost you need to include your mother in this situation. This is her credit. Your situation is nothing to be ashamed of, but attacking it head on together with your mother is your first start to a resolution. And you do have options to resolve this situation. FYI - Modifications are not credit driven. All the best to you and your family.

[cruz5010]

Good morning, I wrote the story about my house being in foreclosure house under my mothers name and my mom not aware of situation. After trying to do a short sale on the house and putting under my name I found out short sales can not be done under family members. With that option not avail my next option was the loan modification which is not good for me because i'm 8 months behind and my original loan amount was $480 and the house is now worth around $410 cause of the market. I've been receiving alot of junk in the mail everyone trying to help. Yesterday though I received a letter from an attorney offering to buy my property and allowing me to stay there renting it for a year or 2 and then rebuying it back from them. I thought this is great this is exactly what i need. My question is can I trust this attorney? And if this is something legal what questions should i be asking and what steps should i be taking? Thank you all.......

[Dan Bailey]

This is 99.999% chance a scam. I've gotten about 50 of those. We are on public record of being in default, and scam agancies buy/ find these records and send out all kinds of redicules offers. You would end up signing over your house paying them rent and them not paying the mortgage.

[Moe Bedard]

OCC Consumer Tips for Avoiding Foreclosure Rescue Scams

Foreclosures are increasing nationwide, and so are scams that promise to “rescue” homeowners from foreclosure. What these scams do is take your money, ruin your credit record, and wipe out any equity you have in your home.


Foreclosure con artists take advantage of people who have fallen behind on their mortgages and face foreclosure. Con artists know that people in these situations are vulnerable and likely to be desperate. Potential victims are easy to find: mortgage lenders publish notices before foreclosing on homes. After reading such notices, con artists approach their targets in person, by mail, over the telephone, or by e-mail. They advertise their services on Web sites or publications. They often refer to themselves with titles that sound official, such as “foreclosure consultant” or “mortgage consultant,” and market themselves as a “foreclosure service” or “foreclosure rescue agency.”


Your mortgage lender – or any legitimate financial counselor – can help you find real options to avoid foreclosure. If someone offers to negotiate with your lender and offers to arrange to stop or delay foreclosure for a fee, carefully check his or her credentials, reputation, and experience. To protect yourself, follow the recommendations contained in this Consumer Advisory.


WATCH OUT FOR FORECLOSURE RESCUE SCAMS

Lease-Back or Repurchase Scams –
Be very suspicious if someone offers to pay your mortgage and rent your home back to you. This scheme often involves signing the deed to your home over to the con artist. The con artist may promise to sell your home back to you, but this may be very difficult, if not impossible, under the terms of the contract.
Signing over the deed gives the con artist the power to evict you, raise your rent, sell the house, or steal the equity you have in your home. You will still be responsible for your mortgage, so if the con artist stops paying it, your lender would have the right to foreclose on your home, and the foreclosure and any other problems would go on your credit record.

Refinance Fraud –
Look out for people posing as mortgage brokers or lenders and offering to refinance your loan so you can afford the payments. Con artists may trick you into signing over the ownership of your home by saying that you are signing documents for a new loan.
Signing over the deed to your home exposes you to the dangers described above. Even if you are a victim of fraud, you could still lose your home.

Bankruptcy Schemes –
Several scams attempt to abuse the bankruptcy laws. For example, a con artist may ask you to give a partial interest in your home to one or more persons. Each holder of a partial interest can then file bankruptcy, one after another. The bankruptcy court will issue a “stay” order each time to stop foreclosure temporarily. However, the stay does not excuse you from making payments or from repaying the full amount of your loan. In another kind of scam, a con artist may offer to obtain refinancing or negotiate a payment plan with your lender. If you may make payments to the con artist, he or she may keep the money rather than pay the lender on your behalf. The con artist may even file a bankruptcy case in your name, without your knowledge, as a part of the scam.
Bankruptcy laws provide important protections to consumers. Scams can only temporarily delay foreclosure, and they may keep you from using bankruptcy laws legitimately to address your financial problems. Signing over ownership of your home, or even partial ownership, can result in serious financial harm.

[cruz5010]

wow thanks for the advice I was ready to go with it. I'm desparate dont want my mom to find out. Time is running out.

[cruz5010]

wait one more thing this letter came in an attorney's letter head. You think this attorney would take a risk of losing his license?

[Moe Bedard]

They can put anything on letterhead...................they know people in these situation are desperate...............so they prey on you.

do what you will............

but, what you really need to do is to come clean with your mom about what you have been going through, her credit is already shot as a result of the late payments, because if you get sucked in by one of these scams...............you are going to put her in a much worse position and do much more damage to her credit, then any short sale, deed in lieu, or foreclosure will.............

[faith]

Originally Posted by cruz5010

wait one more thing this letter came in an attorney's letter head. You think this attorney would take a risk of losing his license?

Cruz5010,
The saying, "If it sounds too good to be true, it probably is." A scam artist can easily type or make a letterhead. That is so easy to do, especially if you know how to do it.

You can check that attorney's name on bbb, type bbb search in your browser, click on bbb search, then type the name of the lawyer or his company, it will give you report of satisfactory or rating of A, AA, AAA. You will know if he is legit or not, even his practice of business. If there's complaint, if he is not a member everything you want to know. Just want to let you know CW has their own investors, Fannie Mae is one of them. They do not use any investors outside of their company.

Be careful there's a lot of can I help you and I can you help you solve your problem, but in reality THEY ARE THE PROBLEM and will give you headaches too. Please follow what *** and everybody else is saying, you have to let your mom know before it's too late.

Taka care of yourself and God bless.


Faith

[cruz5010]

Does anyone here have the Hardship letter? For some reason i dont see it here on the site anymore.

[Moe Bedard]

Examples of a Hardship Letter