Hello everyone,
First and foremost, thank you very much for allowing us to post here, and taking the time to read this and understand our situation.
On the brink of making one the most critical and difficult choices so far in our lifetimes, we’re hoping for some information or answers to some very serious questions and concerns we have. To those in Illinois, we are calling on you for your knowledge and experience!
Situation: We are underwater on our townhouse, like so many, and are seriously not considering paying May's mortgage payment.
We can afford to pay, but to us it just doesn't make good financial sense to do so. In trying to keep it business minded and not personal, sometimes the personal creeps back in there and it's a flip-flop of do it, don't do it.
Background:
As first time homebuyers, bought a townhouse in Cook County, Illinois in late 2005.
Paid $217k lender Countrywide. 6.625% int. $172 month PMI, principal & interest $1376.67 + $413.15 escrow.
$1789.82 total monthly payment + $215 HOA a month. @ $3200.00 yr property taxes incl.
Year or two later it was transferred to BoA.
Late last year receive letter Green Tree was 'servicing' the loan now.
Googled Green Tree immediately, never heard of them. The reviews didn't look good.
Property is worth around $110-120k. Average selling price right now around $125-135k.
Mortgage balance is $196,500. PMI will continue for at least another 7 years before coming off naturally.
Dilemma:
Stay or go? At this point I'm very sure we are going to leave, but not after saving as much as we can during the whole process.
We can’t see putting any further money towards investing in something we will probably never see a return on. Unless someone can honestly say they see the housing market rebounding significantly in the next 5 – 8 years, it’s like throwing money out the window each month.
When we originally bought the plan was to move in 6 or 7 years for a preferred school district, and if not at least refi without the pmi at a lower rate. Well, we all know that didn’t happen so here we are. Our plans were not to stay here until the day we died and hoped to own a single family house one day.. Ahh, the American Dream.
Sorry, getting a bit off track there, just the frustration coming out...
We did have a free consultation with an attorney on the matter a few weeks ago, and things seemed hopeful.
I was a bit concerned however that he was talking about bankruptcy so quickly.
We have two auto loans, one a week old, and another a little over a year old.
Our total credit card debt is about $15k.
We have no other debts, no assets, no savings, no retirement funds. Nothing.
We understand that bk will stop the foreclosure process, albeit temporarily we don’t understand the reason why do it during the foreclosure process. We planned on continuing to pay our car loans and pay off our credit card debt with the extra money.
According to the attorney most people will retain one / him after they have received the summons. We are 13 days from being late for the first time ever.
Oh, and when asked who our lender was, upon hearing our reply of Green Tree he replied, “They are total !@#$’s.” So this ought to be interesting to say the least.
Concerns:
The utmost concern to us of this whole thing is the issue of a deficiency judgment being entered and having to deal with that after the fact of the foreclosure.
The attorney couldn’t say if they would or not, and we know he doesn’t know, but we want to protect our options if that does occur.
Also, he said it would be likely the PMI company would come after us as well.
There was talk of maybe being able to stay in the townhouse while trying to work something out with Green Tree, but in the end we don’t want to stay here anyway, we’ll rent elsewhere.
So,
-If we claim bk during the foreclosure process in Illinois, will that leave us vulnerable to the PMI company and a deficiency judgment from Green Tree later on down the road without the option to file bk since we used it already? This is our greatest concern.
I’d rather have less time to stay here rent free without using bk now. Plus wouldn’t we lose the newer vehicle we just bought?
-Other than to buy further time, what other benefit would there be for filing bk during the foreclosure process? Especially since we want to pay all of our other debts.
-If the PMI company or Green Tree wants to seek their losses from us, when is most likely the time they will do so, and how long do they have by law to do it?
-Will bk actually take care of either a deficiency judgment from Green Tree or collections from the PMI company?
-If there is a deficiency judgment, are funds in a ROTH IRA protected from creditors?
Don’t have one, but just wondering. Guessing no since it is post-tax dollars.
I know we have other questions and concerns, but these are the most stressing right now.
Any help, answers, or tid-bits would so greatly be appreciated.
We look forward to hearing replies and others’ stories.
Thank you again everyone, and best of luck to all.
fedupinillinois
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