Home Loans and Support

CALIFORNIA : Missing first payment in August, 2013. What to expect ?

Discussion in 'Deed in Lieu of Foreclosure - Do You Need Help to ' started by GetOut, Jul 20, 2013.

  1. GetOut

    GetOut LoanSafe Member

    First loan with CALHFA. Second loan with local City (municipal agency). All purchase money loans, thank The Lord.

    Missing first payment in August. Stopped our automatic payments to CALHFA. Do not plan to rent the home out as it would violate the terms of our junior loan with the city.

    My questions are :

    1. How does moving out of the home, prior to foreclosure auction, affect the status of the home as principal residence upon foreclosure ? Can it affect our taxes or the purchase money status of the loans ?

    2. How does insurance for a vacant home work ? Since we live in a tricky neighborhood and my car has been vandalized in the past, I want to be very, very cautious. If CALHFA comes around and discovers that our home is semi-vacant or the nosey neighbors tell them they haven't seen or heard us, are they likely to change locks ? So does it just make sense to completely move out and inform the homeowner's insurance company, requesting insurance on a vacant home ? Also, would it actually help to inform CALHFA & our city that we have moved out ? Is that likely to speed up this process ? We are really just worried about keeping the house safe until it is auctioned off, we have vandals as neighbors ! We just want this over and done with, ASAP. Is this move - getting vacant home policy and informing the lenders of the vacant home - advisable ?

    3. When do we turn off utilities, water and trash / recycle ?

    4. When are collections' activities likely to start in full force ? Are we obligated to give both lenders a forwarding address ? We just don't want collectors harassing us at our new residence.

    I read some old posts, and have set up a Google voice account and a PO box address four cities away, but is there anything else I need to do before we walk ?

    Please let me know. I am getting more and more nervous as August 1 moves closer and close. Thank you.
  2. WhyDidIBuy

    WhyDidIBuy LoanSafe Member

    I walked away from a CalHFA loan (with a second from a local city housing agency). 10 months from first missed payment til foreclosure sale. Couldn't have been easier--I wasn't harassed or anything and ended up with $1500 cash for keys to leave 3 weeks after the sale.

    If you are not trying to drag this out, answer the call from CalHFA and just tell them you will no longer make payments. They will call when the loan is 30 days past due. They will only call a few times after that to verify some info (and you can ask questions about how far along in the process you are) if you tell them you do not intend to make payments, and everything will move along a predictable timeline.

    Leaving will not affect anything from the tax/recourse status point. I stayed til the end, however, so I cannot answer you insurance questions. Some counties will demand payment of property taxes due it it being a CalHFA loan (as I am sure you have read), but my county did NOT.

    Nothing to worry about at all. CalHFA is not aggressive, and I think you will find that your Google voice and PO box were unnecessary. In fact, I only received useful info in the mail (certified) that informed me of the sales date, etc.

    Hope this helps. I left because my place was getting basically dangerous. Move to a nice neighborhood and enjoy life!
  3. GetOut

    GetOut LoanSafe Member

    Hi WhyDidIBuy,

    Thank you so much for responding to my questions. I am actually more worried about the junior loan with the City than CALHFA. Our junior is a silent loan that isn't due currently and which isn't being reported to the credit bureaus. Was your junior the same ? However, they dont stop you from making payments, and their loans are being services by an aggressive collections agency ! The only sane neighbor I had fled the area two years ago. They had a similar loan structure, and the wife told me that she had more trouble with the collectors from the city than from CALHFA. Could you please share your experience with regard to the junior lender ? Also, we have multiple loans with both agencies, did you have the same situation ?

    I wish we could stay, but it isn't a good idea, anymore, and we *have* to move. I hope someone can respond to my query on the insurance issue, and would love to hear from you about the junior lender worries. Thank you !
    Last edited: Jul 20, 2013
  4. WhyDidIBuy

    WhyDidIBuy LoanSafe Member

    I was more worried about the city loan as well, but they literally had given up on the development and knew they would not get paid. The loan agreement was that we would only pay their silent loan back if we sold for a profit; a loss would result in a portion being forgiven. Since all the town houses lost half their value, I think they just wrote the whole complex off...

    So, I guess it is good that you have the Google voice set up to deal with the city!
  5. GetOut

    GetOut LoanSafe Member

    I am unable to create a new thread, so am posting on this one. I have read of junior lenders suing on the underlying promissory note, when the senior has foreclosed and there is nothing left to be had by the junior. Does this also apply to sold out junior lenders who macd purchase money loans ? Can anyone advise, please ? Thank you.

    Also, WhyDidIBuy, you are incredibly lucky. My City's loan docs paint an entirely different picture. They say that the ENTIRE amount of the loan becomes due and payable as soon my senior loans with CALHFA get into default :(

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