Buy and Bail in California

TomEason

LoanSafe Guide
Jun 18, 2009
12,390
85
48
SF Bay Area CA
Hi driftwood

Thanks for your post.

I concur with your forecast for real estate prices; to wit
while homes have gone up a lot in my area things are leveling out and well in my humble opinion, things are becoming stagnant. I predict tiny gains from here forward and a part of me thinks we may even see another modest downturn.
 
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gintn

LoanSafe Member
Jun 18, 2012
46
1
8
driftwood, i went through the same last year. I bought a new house and short sale the previous home. It took around 6 months to finalize the short sale process. 1st was GT and 2nd was BoA. Credit score was dropped from 765 to 650 and now it is 700.

It will be a year next month that reported short sale on my credit report. thinking about refinancing the house but not sure it's possible.
 

vantuckian

LoanSafe Member
Mar 22, 2012
97
2
8
On another note I never bothered to spend my energy in writing GT a letter about their violation of FDCPA. Mostly because I don't have enough time for important things let alone sending them a threatening letter that would confirm they did get a hold of someone who knows me. They haven't called back my relative since and there is really no other activity from them that is impacting me so just rolling along. I am going on 8 mo's of not paying them. For a couple of months I was getting monthly hits to my credit report for payment past due, 60 days then 90 then 120, etc. But the notifications I get from the monitoring service has stopped the last 2 months.
If you haven't already, I suggest you put a credit alert on your credit file with one of the bureaus (I use Experian for this in case you needed a starting point). This will allow you to view your credit report (not score) with both "hard" and "soft" pulls on your report. GT ones sometimes show up on both, or only on the "soft" list. You can kind of gauge their level of activity from this. I can say that they tend to do a pull before they attempt a phone contact ;)
 

driftwood

LoanSafe Member
Sep 17, 2012
315
38
28
gintn and vantuckian thank you both for the information, much appreciated. I like the idea of a credit alert, I need to do that right away.


On a related note, the 2nd has been charged off. The note on Experian says it has been referred to collection. I am using Google voice as my home number so I never pick up the calls but there has been a constant stream of missed calls with no messages. I usually google the number but havent found anything could be something else but feels like its a collector trying to 'catch' me at home.
 

vantuckian

LoanSafe Member
Mar 22, 2012
97
2
8
On a related note, the 2nd has been charged off. The note on Experian says it has been referred to collection. I am using Google voice as my home number so I never pick up the calls but there has been a constant stream of missed calls with no messages. I usually google the number but havent found anything could be something else but feels like its a collector trying to 'catch' me at home.
My GT calls lines up with your experience so far. They called for a while w/o leaving msgs for me as well. Then no calls for a few months. Now they are calling 1-2 times a month, simply stating this message is for <name> and to call back so-and-so (only name, no company name) at some number, which is different than the number they call from. IIRC, the (short) period where they stopped calling roughly begins at charge-off.
 

driftwood

LoanSafe Member
Sep 17, 2012
315
38
28
It's been fairly quiet, so not much new to add except that I got this really nice new statement from GT at the beginning of January that my 2nd was 100% due and payable immediately. They were so nice to include an addressed envelop for mailing back the check. Too bad it will go straight to the recycle bin.

I also received my annual adjustment notice on the 1st mortgage. My bail property has a 1st and 2nd. The 1st is an I/O ARM based on 12 mo LIBOR rates and its terrific news. The LIBOR is down yet again this year so my I/O payment dropped again....sweet. Too bad its just a matter of time before this ticking time bomb reverses.

The biggest thing I have suddenly started to notice is what I believe to be a reversal in the real estate market. Quite a few homes in our area are up for sale and they are staying on the market longer than they would have just last year. I know a few of the local agents who are trying to tell me the market is "normalizing". Their definition being a home that was selling quick in less than 30 days with 10-15 bids is now taking more like 60-90 days... this is supposed to be normal. What do I know but seems to me that means things are slowing down and obviously also means prices wont be driven up as much as last year.

More importantly I watch for trends via zillow. I have a certain search created for my local area and check it regularly to see what's being listed, sold and most importantly foreclosed. Helps me understand pricing and what I think the value on my bail house is. Today I logged in to see more than 50 new notices!! And nearly all of them were some stage of foreclosure!! I just have to wonder if banks are starting to clear out that shadow inventory now. You know all the homes they were dragging their feet on? Who knows I am only looking in my general surroundings but I have never seen this many notices on one day since I started keeping track of this over a year ago. This is huge.

And I think it supports something I have been kicking around. A lot of people took out ARMs or I/O loans 2006, 2007 even into 2008 (those that didnt get out) as the market peaked. Hell I did as well. My loan agent even encouraged me to do it saying oh jump on this teaser ARM and refi in 3-4 years! You will save a ton. For reference a 30 yr rate was over 5% and in some case closer to 6% in 2007 so it seemed to make sense. I was set to do a fixed 30 yr had I not been encouraged to go ARM. For the record I qualified for either, it was just a matter of saving interest. No one really ever thought the bottom would fall out and my home would be worth 50% of the purchase price about 2-3 years into buying it.

But back to my theory... all those ARMs are coming to bear.... now. Depending if the I/O was 5 or.... in some cases 10 years, full amortization payments are about to kick in on these homes and they are STILL in a position of negative equity. I feel like there is a second wave of massive foreclosures coming, strategic foreclosures and walk-aways. After all these years the price has come back some but not enough and rates will start to tick up plus add in a shorter time to amortize the balance and.... boom! Then again what do I know.
 

TomEason

LoanSafe Guide
Jun 18, 2009
12,390
85
48
SF Bay Area CA
Hi driftwood

Thanks for your interesting post.

FWIW, I agree with your assessment and forecast. I've noticed the same trends in my market.

Like you, I believe there are many many more FCs in the pipeline.
 

driftwood

LoanSafe Member
Sep 17, 2012
315
38
28
Thanks Tom makes me feel better I am not just imaging things. I figure these low I/Os with Fed induced minimal interest rates (for the moment) have kept a good number of people in their house longer they would have. This includes me! Had rates not fallen so low and reduced my monthly I/O payment so dramatically I probably would have acting and bailed on this home 2-3 years ago! I feel like I am probably not the only one in this situation which means it will shake out soon. By then maybe we will have HARP 5? :)
 

driftwood

LoanSafe Member
Sep 17, 2012
315
38
28
Well it seems I need to get a bit more firm with GT, they have started calling relatives again even though they acknowledged my C&D letter. I know they have my C&D letter because they sent a response in writing that it was received. Anyone know of a good template posted here that I could leverage than writing from scratch? I am not looking for an initial C&D letter more of a follow up reminder... thanks in advance.
 

driftwood

LoanSafe Member
Sep 17, 2012
315
38
28
A GT rep finally got a hold of my personal cell phone number, no idea how they find this stuff but anyway. First thing he asked was for me to verify my social and address. Of course I said no, you called me why would I do that? He hesitated then said, "so you don't want to address this matter?" I said what matter, no idea what you are talking about. And again he tried to get me to verify to which I said sorry there is no reason for me to verify anything with you, whoever you are. I made it even more interesting by also telling him I do not give my consent to record our conversation and in California that is my right. He basically ended the call at that point and I have heard nothing since. Afterwards part of me would have liked to hear what he was going to say, though my guess it was just a more senior collections person.

On another note, I have noticed quite a few folks recently on these forums reporting that GT has filed suit and they prefer this course of action. So I am preparing myself in case they do. My 2nd is a purchase money loan in CA which means they have to FC before they can sue. Since the 1st is still significantly underwater I dont see that happening anytime soon. However in doing my research I happened to check MERS website and something stood out to me this time. Both loans were initiated during escrow to purchase the property but they have different note dates. Seemed strange to me because I would expect they both would be dated at the close of escrow. The 2nd is dated 6 days prior to the 1st and I believe the 1st is correct being dated at the close of escrow.

Knowing how GT likes to sue and bend the rules in their favor I wonder if they might use that date difference to suggest it was not a purchase money loan. Then again I can prove I didn't even own the home at the time.

Any thoughts out there?
 

TomEason

LoanSafe Guide
Jun 18, 2009
12,390
85
48
SF Bay Area CA
A GT rep finally got a hold of my personal cell phone number, no idea how they find this stuff but anyway. First thing he asked was for me to verify my social and address. Of course I said no, you called me why would I do that? He hesitated then said, "so you don't want to address this matter?" I said what matter, no idea what you are talking about. And again he tried to get me to verify to which I said sorry there is no reason for me to verify anything with you, whoever you are. I made it even more interesting by also telling him I do not give my consent to record our conversation and in California that is my right. He basically ended the call at that point and I have heard nothing since. Afterwards part of me would have liked to hear what he was going to say, though my guess it was just a more senior collections person.

On another note, I have noticed quite a few folks recently on these forums reporting that GT has filed suit and they prefer this course of action. So I am preparing myself in case they do. My 2nd is a purchase money loan in CA which means they have to FC before they can sue. Since the 1st is still significantly underwater I dont see that happening anytime soon. However in doing my research I happened to check MERS website and something stood out to me this time. Both loans were initiated during escrow to purchase the property but they have different note dates. Seemed strange to me because I would expect they both would be dated at the close of escrow. The 2nd is dated 6 days prior to the 1st and I believe the 1st is correct being dated at the close of escrow.

Knowing how GT likes to sue and bend the rules in their favor I wonder if they might use that date difference to suggest it was not a purchase money loan. Then again I can prove I didn't even own the home at the time.

Any thoughts out there?
Thanks for your post. I recommend you not be at all concerned.
 

driftwood

LoanSafe Member
Sep 17, 2012
315
38
28
Thanks Tom. Side note I was wondering if everything was ok with you, I hadn't seen you replying on the forums for a while.

On another note, picked up my mail yesterday and I got the monthly GT statement from their asset receivables department. Last payment was 3/13 for reference so its been charged off and all activity stopped months ago. But this new statement suddenly had interest added to the tune of about $1200! On a balance of about $46K that is pretty significant for 1 month! I actually find it comical because if they start adding fees/interest/ etc. they are pushing the home FURTHER underwater!
 

TomEason

LoanSafe Guide
Jun 18, 2009
12,390
85
48
SF Bay Area CA
Thanks Tom. Side note I was wondering if everything was ok with you, I hadn't seen you replying on the forums for a while.

On another note, picked up my mail yesterday and I got the monthly GT statement from their asset receivables department. Last payment was 3/13 for reference so its been charged off and all activity stopped months ago. But this new statement suddenly had interest added to the tune of about $1200! On a balance of about $46K that is pretty significant for 1 month! I actually find it comical because if they start adding fees/interest/ etc. they are pushing the home FURTHER underwater!

Hi driftwood

Thanks for asking. I'm fine - have been involved in several projects, so have spent less time on Loansafe.
 

driftwood

LoanSafe Member
Sep 17, 2012
315
38
28
Haven't updated this in a while but had a new development. This week I received a letter from GT servicing that BofA is forgiving the 2nd as a result of the DOJ settlement. I hadnt paid it for nearly 2 years but considering this was GT servicing and BofA investor I nearly fell out of my chair with this development. The 2nd was on my bail home which has a current 1st still 15% underwater and a great tenant occupying the home. Now I need to reconsider if I want to bail on the home. It was a nice surprise then again I had already resolved myself never to pay that 2nd anyway. Happy holidays all.
 

driftwood

LoanSafe Member
Sep 17, 2012
315
38
28
Because it's been a while since any updates, a brief recap of my situation, bought Calif home in 2007 with interest only 30 year and it's been underwater ever since. Purchase a new home in 2013, moved and rented out the 2007 home. Continued to pay IO first while renting, however, IO period has ended. Skipped the last 2 months' payments and last years' property taxes. The home is still underwater and likely would not net enough in a sale to cover mortgage and seller expenses. My goal is to short sell the home but not looking likely. The mortgage is with Chase and talked to them last week about my wish to short sell the home and cut everyone's losses. They won't consider short sell option without an application and financial information. Pretty sure if I share my current picture they won't approve the short sale. So I am contemplating sending the application without bank statements, tax returns, etc. Also contemplating putting the home on the market and just seeing what kind of offer I get, maybe if it's close to breaking even for Chase they might consider. The loan is considered a jumbo so it's owned by Chase directly, my logic is they have a greater risk of loss since its owned directly.
 

driftwood

LoanSafe Member
Sep 17, 2012
315
38
28
Anyone have suggestions on how to get Chase to consider/approve a short sale without submitting a financial package? I am in California, its a first mortgage so there is really nothing they can do other than FC or SS. Its non-recourse so they cannot try to collect the deficiency. Maybe its worth it just to give them everything they want and see what happens? Thoughts or suggestions?
 

driftwood

LoanSafe Member
Sep 17, 2012
315
38
28
Well my saga has finally come to an end. Stretching out the home until the my first interest only period expired seems to have made a huge difference. I am glad I stayed current and rented out the home for several years even though I probably would have made more $$ just stop paying everything. I waited until the interest only period ended so I was making some income on the rental for a while. The IO period ended this year so stopped paying everything and got several months behind before putting the home on the market. To my surprise it sold quickly and for enough to pay all closing costs and remaining 1st mortgage balance. Escrow closed yesterday and I will be receiving a little money out of the sale with no cap gains since it still sold for less than what I paid + improvements. Now I can watch my credit heal and I am done with that losing investment.

Fortunately the home I bought 4 years ago is up over 30% from what we paid for it (that's a conservative number) so it more than covers the net losses I took on the property I just unloaded.

Thanks for all the advice I received on this site, I never could have done this without finding some of the great information and advice of the people on this forum.
 

vondes

LoanSafe Member
May 28, 2017
6
0
1
32
Thanks TomEason appreciate the clarification. I kind of thought they were independent, but I was trying to be clever! LOL I was going to try and make the arguement that if the SOJL cannot enforce the collection of the debt through the court system than technically there is no legal obligation? I know its a stretch, but I so want to sock it to GT!