Not in foreclosure yet, but looming in future..

[sharilee]

This is a very long post, but I hope someone will read it! I know this is a fourm about avoiding foreclosure if possible, but we may need to let the bank foreclose on our house, and we need advice so badly. We live in NC and own a home in another county that we had to move out of a couple of years ago due to a job relocation. The house is a fixer-upper and has needed repairs for a long time, but we could never afford them, so we just lived with it. We also have negative equity due to a very poor decision on my part to get a no-equity 2nd mortg. from ditech to consolidate my huge student loan balance and credit cards. When my husband accepted a job with much greater earning potential but requiring us to move, we thought we would not be able to get what we owed out of the house if we put it on the market since it needed a new roof and windows and we had no negotiating room on the price. So we thought we would leave the house empty for a short time, keep up with the mortgages, and start working on getting the roof and windows replaced. We leased a house in our new location, and we moved. Needless to say, my husband's great new job did not end up to be the great deal we had hoped--we were able to keep up with all of the house pymts, but there was not enough to start repairing it. We didn't want it to sit empty forever, so we got renters into it, but due to area economics and the lower-income of the area, we were not able to rent it out for our full mortgage payments, so we have been paying the 2nd mortg, insurance, taxes, and repairs every month. But we figured it was better than losing the house, and we kept believing better times were around the corner. Then my husband lost the "great" job that we had relocated for,and took one making less money, and we have been barely hanging on ever since. Now we really could not afford to keep up with the old house. We have even more negative equity since the market is slow. The house is needing more minor repairs and general maintenance due to its age, and we can't keep up. We've run up every credit card we have just trying to live. Our renters have been behind on their rent due to their own financial problems; they've tried to get a mortgage to buy the house themselves but were unable, but they were hesitant to buy it anyway, knowing the work that the house needs. Now they are moving out in about 3 weeks for a cheaper house. We don't know what to do. We desperately need out from under this house. We are 2 mo. behind with ditech and I have received a default letter with June 2nd as the cutoff date for paying up and getting current. Even if I do that, we have no extra money with which to keep up the 1st mort. until we get new tenants into it; but that just puts us right back into the cycle of repairs and payments that we can't afford. We are trying to decide between bankruptcy (prob. Ch 13 due to our "above-avg" income) and just foreclosing on the house. I have read all about short-sales, but don't know if it would be any better for us than foreclosure due to our neg. equity from the 2nd mort--I believe the 1st mort. could get paid off (it's with Citifinancial) and they have told me in general terms that they are willing to do short sales. It's ditech I'm worried about--we have a balance of $40,000 with them and I wonder if they would come after us for that and garnish our wages. I know that's a possibility with foreclosure also, because ditech probably wouldn't get paid. If we're going to get sued either way, I wonder if we should just foreclose. Does anyone have any idea about ditech's aggressiveness? I haven't called them yet because my head is spinning with all of these different options. I'm very uncomfortable with Ch 13 due to the length of time that we would be in it (5 yrs). If we foreclosed, and we no longer had any money going toward that old house, we could feasibly pay off our credit cards within a couple of years, and put money in savings, and it would give us some positive credit activity against the foreclosure. I just don't know if it's worth the risk of ditech coming after us. If you've read this whole post, bless you for your patience and please offer any opinions or advice you have!

[schwefls]

Welcome to our forum Sharilee:

You have come to the right place, I have read post and wanted to let you know, you are not alone we are here for your. Shortly someone will be reaching out to you to get some details regarding your mortgage/financials. In the meantime please hang in there.

Good morning Sharilee. The teacher in me suggests that a good starting place is a brief summary of the laws of the State of Georgia relating to lender foreclosure remedies. That information, obtained from the foreclosure laws site Moe uses is provided below. It reflects the "not so good news" we see in a number of Southern states, allowing lenders to obtain default judgments in instances of both judicial and non-judicial foreclosure processes. That effectively means the lender can chase you to recover their loan loss after foreclosure and disposition of the property. Will they? From a practical standpoint it is difficult to say. It depends upon a variety of factors that center on their ability to collect once they have a judgment.

Others will respond relating to potential loan modifications that may help you meet the monthly obligations.

Take care,

Daniel




Georgia Foreclosure Law Summary


Quick Facts

- Judicial Foreclosure Available: Yes

- Non-Judicial Foreclosure Available: Yes

- Primary Security Instruments: Deed of Trust, Mortgage

- Timeline: Typically 90 days

- Right of Redemption: Yes

- Deficiency Judgments Allowed: Yes
In Georgia, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure

The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, the property will be auctioned off to the highest bidder.

Non-Judicial Foreclosure

The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of
sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee.
Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines

If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:
A foreclosure notice must be mailed by certified mail, return receipt requested to the borrower no later than 15 days prior to the date of the foreclosure sale. The time period begins the day the letter is postmarked. The notice must be mailed to the address given to the lender by written notice from the borrower. No waiver or release of the rights to notice is valid if it was signed at the same time as the original documents.

The notice must be published in a newspaper of general circulation in the county where the sale will be held once a week for four (4) weeks proceeding the date of the foreclosure sale.

The sale must be made by public auction on the first Tuesday of the month between 10:00 am and 4:00 p.m. at the courthouse.
Lenders may seek a deficiency judgment in Georgia.

[sharilee]

Thanks so much to those who have read my post and replied so far. To ProfessorShays--we actually live in NC, not GA, but I read the NC foreclosure laws and they allow def. judgements also. We just don't know which way to go. I want to do the best thing for our family's finances and future. We will be fine financially if we can just get rid of the house. I think I will call a real estate agent in our old area and just talk over the situation and see if they think a short sale would be feasible. Does anyone know--if you are pursuing a short sale, will the lenders put the foreclosure on hold? I don't know if Ditech would be willing to work with us in this way since they are the 2nd mortg and the ones we are in default with, and if we do a short sale they will probably not get paid, so they don't have a really compelling reason to put the proceedings on hold.

[tanja53]

Originally Posted by sharilee

Thanks so much to those who have read my post and replied so far. To ProfessorShays--we actually live in NC, not GA, but I read the NC foreclosure laws and they allow def. judgements also. We just don't know which way to go. I want to do the best thing for our family's finances and future. We will be fine financially if we can just get rid of the house. I think I will call a real estate agent in our old area and just talk over the situation and see if they think a short sale would be feasible. Does anyone know--if you are pursuing a short sale, will the lenders put the foreclosure on hold? I don't know if Ditech would be willing to work with us in this way since they are the 2nd mortg and the ones we are in default with, and if we do a short sale they will probably not get paid, so they don't have a really compelling reason to put the proceedings on hold.

Hi Sharilee

I am so glad that you took my advice and looked up loansafe's forum.
You will get a lot of good advice and also meet other great home owners who all have problems.
I really hope it works out for you and your family.
Don't blame yourself to much.
We have all done things in our lives that we now are wondering about.
It is now in the past.
We all live and learn and get more and more knowledge and expeirence.

Have a great weekend.
Margo

[sharilee]

Tanja53--Thank you for directing me here! It is such a friendly non-judgemental site and I felt comfortable immediately. I greatly appreciate your advice to come here and all the work you and everyone else do here to help homeowners out.

[tanja53]

Originally Posted by sharilee

Tanja53--Thank you for directing me here! It is such a friendly non-judgemental site and I felt comfortable immediately. I greatly appreciate your advice to come here and all the work you and everyone else do here to help homeowners out.

The best medicine when you have problems.
It is to talk to others in the same boat.
They will understand and listen and give knowledge and their personal advice.
No body else understand as much as them.

So this forum helps me when I am feeling desperate and down.

Take care only glad to spread the word about this forum.
Margo in CA.

I'm bumping this so one of the people on the forum who have information on Ditech will chime in about your questions relating to short sales, etc. Sorry for my confusion on the State. The appropriate law would be the state where the property is located, not the state where you currently live.

One final note. Again the teacher in me. Break your posting down into smaller paragraphs. People are use to handling what they read in bite size chunks (aka paragraphs).

Daniel

[sharilee]

State: NC
My husband and I relocated when he got a great job opportunity. We were unable to sell our home, so we left it empty on the market. He was making enough money to cover the mortgages (1st w/Citimortgage $77k, 2nd w/ditech $40k) and the payment on the house we rented in our new city, 2 hours away. As time went on, the great opportunity started to fizzle, but we were very happy where we were, and so we put renters in our house so we could help out the budget, and still stay here.
In the meantime, the great job we had moved for went under, and my husband had no job. The renters in our old house were under a year-long lease, so my husband found a new job and we carried on. The renters stayed in the house until July of this year. They had tried several times to get a mortgage to buy the house but were not able. They moved out very quickly, still owing us money. We were panicked because we could not make the mortgage payment, so we got other renters in there quickly. Big mistake. We are now having to evict them. It will take at least 4-6 weeks to get them out, and we have to make the mortgage payments ourselves to keep from getting foreclosed on (we are about 45 days behind on 1st, and 30 days behind on 2nd). I've already received a default letter from Citi, but scheduled a payment with them to hold them off.
We don't know what to do. We do not want to put more tenants in there, but we can't afford for the house to sit empty on the market for an untold amount of time. We feel like we have to move back in it ourselves or foreclose on it. Finding a job in our old area is proving to be a problem in this economy for my husband. He has a very stable job here. I am a nurse and can get a job anywhere. If we do move back, we are terrified as to what condition the house will be in, but we could possibly save ourselves a foreclosure. If we let the house go and stay where we are, the house would probably auction for the amount of the 1st mortgage, but would definitely leave ditech out in the cold for their money. I've already investigated chapter 7 and we make too much money. The lawyer that I spoke to actually said even chapter 13 would be very hard for us to stick to because our payments would be really high.
We have no assets except an 8 year old minivan, a motorcycle and a small pop-up camper. We have no savings anymore.
Is ditech aggressive when it comes to pursuing judgements? We are afraid of a judgement or wage garnishment following us around for the rest of our lives.