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SoundsoftheSuburbs

LoanSafe Member
Is it possible to have the lease include an agreement to purchase at x dollars at year 5 in the lease? Just spitballing a way to take over your father's liabilities and retain rights to the property as a tennant (while waiting for credit issues on the mortgage are resolved.) In this case, he would still be living with you because, well, you are taking care of an elderly parent. I don't know if this creates issues of law but it could create contractual rights. I have considered leasing with option to buy as a way to obligate the pretender lender to a pre-existing contract so they don't have claims to evict anyone in a potential future foreclosure.
The lease agreement that we signed includes an option to purchase for a specified dollar amount. Right now, we are working on getting all his taxes together for a bankruptcy case. Unbelievably, my father ended up with COVID days before his scheduled discharge and was admitted to the hospital today. Anyway, it seems like this is going to be a process that will go on for a lot longer than I had imagined. At 2 years past due, I assumed that we had a matter of months. But, with COVID and the bankruptcy, it sounds like this could go on for years? SPS calls periodically requesting to speak with someone about a deed-in-lieu. I'm not sure why anyone would do that in current times.
 

Survivor_IN

LoanSafe Member
I am so sorry your father is in the hospital with COVID. How awful to have this stress on top of it all. :(

Praying for you and your family.

You are right, litigation may last years. My best guess is that if something happens and your father passes, you have survivors rights to the property, which creates a new ball of wax. I have thought of this with my own family and the mortgage. The lack of resolution is in itself harassing where they could have played fairly and negotiated to cure the debt a long, long, time ago.

Others may chime in on this, but you might consider converting to a chapter 7 which, if house is underwater, discharges the past due uncollectable parts. Also, in Chapter 13, another thought is they might have to sue and prove they are in fact the party that is actually "the real party in interest," meaning you can force them to prove their entitlement to collect or foreclose. Many lenders do not have such proof.
 

SoundsoftheSuburbs

LoanSafe Member
I am so sorry your father is in the hospital with COVID. How awful to have this stress on top of it all. :(

Praying for you and your family.

You are right, litigation may last years. My best guess is that if something happens and your father passes, you have survivors rights to the property, which creates a new ball of wax. I have thought of this with my own family and the mortgage. The lack of resolution is in itself harassing where they could have played fairly and negotiated to cure the debt a long, long, time ago.

Others may chime in on this, but you might consider converting to a chapter 7 which, if house is underwater, discharges the past due uncollectable parts. Also, in Chapter 13, another thought is they might have to sue and prove they are in fact the party that is actually "the real party in interest," meaning you can force them to prove their entitlement to collect or foreclose. Many lenders do not have such proof.
My dad is an incredible fighter and was discharged from the ICU and hospital last week. He was transferred to a non-COVID hospital here in the area. I've still yet to see him. SPS continues its non-serious engagement. I've submitted another RMA. My dad's accountant is still in the process of filing income taxes in order to file the bankruptcy. The government sent him the stimulus money of $1,200 unsolicited, which is horrifying given his $110k plus income while not even working. Anyway...

The house will be turning upside down if they don't come up with a resolution quickly. The total balance is coming up on $651k, and in the current market (it's been a mixed bag here in Chicagoland), I think it is probably worth about that. They came up with a BPO $674k. I think that's aggressive. However, this home in better shape ($50-60k later) is probably worth around $800k+. They should be receiving some property tax refunds after I found some missing exemptions and my county did a COVID assessment reduction. The county says that they sent the escrow account a few thousand dollars. This really is the stupidest thing ever because they will lose far more money dragging this out or taking the house than just re-amortizing the loan. Ugh...
 

SoundsoftheSuburbs

LoanSafe Member
Did another RMA and was denied. "Unable to reduce the principal and interest payment." I've appealed the taxes and gotten them to their lowest in 5 years. The modified payment is great, as far as I'm concerned. The proposed interest rate was 2.75%, down from 4.75%. They did a drive-by BPO and increased it to $711k. Makes no sense considering the flatness of the market in this inner-ring high-price suburb. "$10k repair costs" LOL. I have to pay that for a new boiler soon alone. I don't know what to do. Appeal? How? They're policy is that they need to be able to 'reduce the principal and interest payment' in order to approve a mod. "Income was not used in this decision." Jeez.
 

SoundsoftheSuburbs

LoanSafe Member
Received a call from a lady at SPS who told me that I was given incorrect information about unapplied payments. She said that making payments, even a little, was helpful in demonstrating "good faith."
 

Survivor_IN

LoanSafe Member
I'm not sure about that one. I do know that debt collector's can restart SOL (Statute of Limitations) on the debt if/when you restart payments. In some States, this is 5 years, others longer. Of course, this may be irrelevant if the goal is to resume payments and retain the property. I would start or be banking the estimated payments (savings or other dedicated account ) and build a balance for down payment on future modification or potential refinance until you have something in writing.

I'm assuming you did take some action to be able to handle your father's account such as him giving verbal permission for them to discuss with you, even if it's only over the phone. (Or a legal letter/notice signed that you have permission.) It does appear he has sufficient income, which is weird they didn't jump on on offer to resume payments at x amount. A lot of times (as in past HAMP mods) they would put past due in a balloon payment due at the end of the term (or sale of property). The servicer may be fishing for a down payment in order to modify, according to your post of reducing P&I in order to have a smaller payment.

I hate writing my own legal letters, but without finding representation in a foreclosure, you may have to submit your own proposal on resuming payments.

I do hope your father is okay. COVID crisis is looming large right now.

Also you are facing a potential probate court if your father passes that you might want to investigate further. At this time, the mortgage may be forced to negotiate and if your credit is good, you could possibly finance in your own name through survivors/inheritance rights.
Selling Your Parents’ Home After They Pass Away: Take it Step by Step (homelight.com)
 

dksnj

LoanSafe Member
I have a separate thread re: loan mod to extend maturity date. Loan matures February 2021 where there will be a balance of $17,535.85, but here is my situation:

1. Loan Balance Now= $18,170.29
2. Past Due if any= $0
3. Gross Monthly Income for Borrower and Co Borrower= $5045.08
4. Mortgage Payment without taxes and insurance (do not include taxes and insurance) = $751.15
5. Real Estate Taxes per month= $571.43 (included in mortgage payment)
6. Insurance and/or HOA per month=$169 (not included)
7. Home Value (check eppraisal.com and chase home value estimator)= $230,00.00 - $260,000.00
8. Mortgage Servicer and Investor (check if fannie or freddie or MERS below links) Fay Servicing/NewRez
9. Other monthly debt payment total for credit cards and collections = $74
10. Current interest rate = 8.75%
11. Fixed Rate or Adjustable Rate? = Fixed
12. Have you been modified before? if so, what date? = Yes, 2010
13. When did you get this loan, what year? = August 1999
14. If you own any other properties, include PITIA for each property and gross rental income for each= N/A
 

SoundsoftheSuburbs

LoanSafe Member
I'm not sure about that one. I do know that debt collector's can restart SOL (Statute of Limitations) on the debt if/when you restart payments. In some States, this is 5 years, others longer. Of course, this may be irrelevant if the goal is to resume payments and retain the property. I would start or be banking the estimated payments (savings or other dedicated account ) and build a balance for down payment on future modification or potential refinance until you have something in writing.

I'm assuming you did take some action to be able to handle your father's account such as him giving verbal permission for them to discuss with you, even if it's only over the phone. (Or a legal letter/notice signed that you have permission.) It does appear he has sufficient income, which is weird they didn't jump on on offer to resume payments at x amount. A lot of times (as in past HAMP mods) they would put past due in a balloon payment due at the end of the term (or sale of property). The servicer may be fishing for a down payment in order to modify, according to your post of reducing P&I in order to have a smaller payment.

I hate writing my own legal letters, but without finding representation in a foreclosure, you may have to submit your own proposal on resuming payments.

I do hope your father is okay. COVID crisis is looming large right now.

Also you are facing a potential probate court if your father passes that you might want to investigate further. At this time, the mortgage may be forced to negotiate and if your credit is good, you could possibly finance in your own name through survivors/inheritance rights.
Selling Your Parents’ Home After They Pass Away: Take it Step by Step (homelight.com)
Here we are again. Was denied again in December and they increased their drive-by BPO to $700k. Courts have reopened here. I feel very lost right now.
 

SoundsoftheSuburbs

LoanSafe Member
I was mailed three letters dated the same day—two days after my post. The first letter gave a list of all of their loss mitigation options. The second letter stated that we were approved for three months of COVID-19 forbearance. The third letter stated that there were no loss mitigation options available.
 

OneHugeMess

LoanSafe Member
I was mailed three letters dated the same day—two days after my post. The first letter gave a list of all of their loss mitigation options. The second letter stated that we were approved for three months of COVID-19 forbearance. The third letter stated that there were no loss mitigation options available.
Oh Christ.

Keep the loan in COVID 19 Foreborance for as long as possible. Unfortunately, your father is likely looking at Bankruptcy afterwards. There is a small, tiny, chance, that you'll automatically run into a "repayment" program or get an unsolicited loan mod offer after the 3-Month period ends.
 

SoundsoftheSuburbs

LoanSafe Member
Oh Christ.

Keep the loan in COVID 19 Foreborance for as long as possible. Unfortunately, your father is likely looking at Bankruptcy afterwards. There is a small, tiny, chance, that you'll automatically run into a "repayment" program or get an unsolicited loan mod offer after the 3-Month period ends.
We are getting all the taxes filed in preparation for bankruptcy. Is it possible to get some of the arrears forgiven in a bankruptcy?
 

Survivor_IN

LoanSafe Member
They must be covering legal basis with those three letters. ?

Just curious if your servicer cashed a property tax refund without your signature and/or applied escrow properly? Get copies of your recent notices on this property valuation reduction and amount of refund, who refund was sent too. It will definitely affect future escrow accounting so don't let them raise it in a potential modification. Scrutinize these dealings. Independently verify,

Also looks like they are paying a premium, possible bonus, on those drive-by evaluations conveniently increasing your market value.

Your tax-assessed value is typically the one used in bankruptcy as well as in modification reductions. It can be used to cram down in a chapter 13 repayment plan and servicer would lose ability to collect it.
 

SoundsoftheSuburbs

LoanSafe Member
I submitted an affidavit of occupancy related to a foreclosure moratorium executive order issued in my state. The day after, SPS opened a new request for mortgage assistance and asked us to fill out the same damn form that we have filled out many times before.

Are escrow debts dischargeable in bankruptcy? About a third or more of the arrears are taxes, insurance, and fees/penalties.
 

OneHugeMess

LoanSafe Member
I submitted an affidavit of occupancy related to a foreclosure moratorium executive order issued in my state. The day after, SPS opened a new request for mortgage assistance and asked us to fill out the same damn form that we have filled out many times before.
I hate to say it, but send it in again. In the notes of the account, I'm sure it now says "LIQUIDATION DELAYED"... maybe, just maybe, they'll consider you again for a modification.
 

SoundsoftheSuburbs

LoanSafe Member
I just caught them doing another drive-by BPO. I saw an assistance option on a letter that wasn't there previously called "payment deferral." Honestly, this sounds like what I'd been wanting but wasn't an option—making the past due payments due at the end of the loan as a balloon payment. I'm hoping that they'll offer us something reasonable this time around. Fingers crossed.
 
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