Need Proactive Foreclosure Advice/Options

Griffy

LoanSafe Member
Jan 23, 2012
42
0
6
TX
I’m happy to report that with LoanSafe’s help and REST Reports, I successfully got a HAMP in Oct 2012.
In March of 2013, I went bankrupt in Texas. My 2nd mortgage wasn’t quite underwater, so the debt was released but I still have a lien against the property. I think the value of the property was $181K then.

Fast forward to now and the property is worth anywhere between $292 - $315 - $355 (2018 tax – Zillow – Realtor comps).

MY PROBLEM … how to prevent Foreclosure: my 2nd just called (Specialized Loan Services) saying that they weren’t ‘trying to collect a debt’, but wanted to know if I realized I had a lien (I did) and “what were my plans for the house?” They said, “If a different looking envelope arrives in the mail, it would be a Foreclosure Letter”.
SLS said that their records show:
  • I owe $175K on the 1st (Chase doesn’t report my payments, SLS doesn’t know it’s now at $147K)
  • Home value at $315K
  • SLS didn’t say, but I owe them $58K before penalties and interest
My HAMP with Chase
  • Income was at $3,125 in 2012
  • Years 1-5 PTI payments (2% for 40 years) were $1,003 according to the paper work, but they deferred escrow a bit and made the actual payment $965)
  • Now my PTI payment (3.625%) has leveled out to $1,222.
WHAT ARE MY OPTIONS if I want to stay in the house?
  • I’m not keen on refinancing the 1st (my credit score is about 702)
  • Looks like HUD 2mp is still an option since I have a HAMP, but what do I do to pause SLS with the government closed down now? If I can get a 2mp, what would my payments be (can’t find much documentation on how to calculate this)?
  • What’re my odds with a Debt Validation Letter in Texas that signatures could be bogus and provable?
  • I ‘may-may-may’ be able to get a 3rd mortgage to pay off the 2nd. There was 1 in a gazillion banks (Wyndahm Capital Mortgage in NC) that I called trying to get equity out of the house, that said if I can get my credit score above 700 (it was 675 until I just paid down a bit of debt). I'm guessing that they want to refinance the 1st, which I don't want to do.
  • How do I best negotiate with SLS? (IBC was the original servicer who sold to GMAC, who sold to SLS, who just sold to someone else but it is still serviced by SLS). So my loan was bought for penny’s on the dollar and SLS would roughly have to pay $25K in foreclosure costs and get whatever price sold on the courthouse steps I guess. So there’s surely room to negotiate but I’d really rather not do a recent appraisal if possible.
Thanks Heaps!
PS - I saw another thread on over 60 ... I turn 60 next week if that makes any difference.
 

OneHugeMess

LoanSafe Member
May 30, 2016
476
32
28
PS - I saw another thread on over 60 ... I turn 60 next week if that makes any difference.
All that means is two things. Certain states & counties have additional discounts for seniors on property taxes, and things like municipal water and garbage bills.

The other benefit is - at the age of 62, you can qualify for a Reverse Mortgage and not make payment at all. It'll just use the equity of your home to subsidize the payment for you.

  • Looks like HUD 2mp is still an option since I have a HAMP, but what do I do to pause SLS with the government closed down now? If I can get a 2mp, what would my payments be (can’t find much documentation on how to calculate this)
I'm fairly sure 2MP ended 12/31/2016, apart of HAMP. I could be wrong about that though.

  • What’re my odds with a Debt Validation Letter in Texas that signatures could be bogus and provable?
You should send a DVL anyway if a law firm contacts you, but it'll likely not provide the relief you're looking for.

How do I best negotiate with SLS? (IBC was the original servicer who sold to GMAC, who sold to SLS, who just sold to someone else but it is still serviced by SLS). So my loan was bought for penny’s on the dollar and SLS would roughly have to pay $25K in foreclosure costs and get whatever price sold on the courthouse steps I guess. So there’s surely room to negotiate but I’d really rather not do a recent appraisal if possible.
SLS doesn't buy non-preforming loans. It's actually a weird-subsidiary of IBM Computers, and they just act as a servicing agent for investors in home loan pools and small regional banks. Very likely, the original investor in your note still owns it, and contracted SLS to service it.


Here is what I'm concerned about.

First off - the servicer's foreclosure fees are not anywhere near $25-30k. They actually send these cases out to specialty, attorney mills, and they give them a budget of about $2k to process the entire case.

You are in a situation where you defaulted, years ago, and IBC ordered a BPO of your home and realized at *that time* that the loan was worthless. They notated that in your account file and decided to stand off.

Since time heals all ales, apparently, markets have recovered and you are now in a situation where you have almost 50% equity in the property. That's wonderful, except, in this case, it also puts your home at risk.

You see -- depending on the state statutes on foreclosure, the servicer MAY actually decide to foreclose and recover their money for the investor in your loan. A LOT of servicers are tracking areas with high appreciation or recoveries and taking another look at old accounts that have sat in default for a while.

---------

My advice to you is -- find out what the state statute of limitations is on foreclosure in the state of Texas, and find out if you have passed that date. If you have --- Great, they can't foreclose and just have a superglued lien on the home.

You'll have to pay off this lien in the event of a refi, or sale, of the home, but beyond that -- you can ignore it for a while.

If there is not a SOL, or you have not passed it --- I'd look into getting a Cash Out Refinance and simply paying off your first and second mortgage. This is probably the best way to go about handling it, as I know, SLS will not negotiate an above-water lien.
 

OneHugeMess

LoanSafe Member
May 30, 2016
476
32
28
  • I ‘may-may-may’ be able to get a 3rd mortgage to pay off the 2nd. There was 1 in a gazillion banks (Wyndahm Capital Mortgage in NC) that I called trying to get equity out of the house, that said if I can get my credit score above 700 (it was 675 until I just paid down a bit of debt). I'm guessing that they want to refinance the 1st, which I don't want to do.

No lender is going to issue a 3rd Mortgage beyond a pool/sauna loan, and several will be skeptical about offering a 2nd even with a pay off of your current second mortgage.

If your Refinance - you'll very likely have to combine the 1st & 2nd into a new loan. And with your equity you can go anywhere for a loan -- don't let a Loan Officer tell you otherwise.
 

Griffy

LoanSafe Member
Jan 23, 2012
42
0
6
TX
OneHugeMess: "I'm fairly sure 2MP ended 12/31/2016, apart of HAMP. I could be wrong about that though."

Thanks OneHugeMess - sadly for me, you're correct! Scarier, my Legal Shield lawyer was the one that recommended the 2MP.

Doesn't sound like I have any/much negotiating room. I guess at this point I'd be happy to knock off accumulated any interest and penalties over the past 6 years, which will be sizable. ANY SUGGESTIONS? Has anyone heard of Acgnow.com doing the negotiating for you?

Thanks
 

OneHugeMess

LoanSafe Member
May 30, 2016
476
32
28
Are you completely sure it's still accumulating late fees, and interest charges? Usually what happened, is after six months or so, the servicer or bank would place the account into a charged-off status... and the interest would stop accumulating from there. If it's the same for your case, it would be a lot more reasonable of a figure.

I would not hire an outside third party, for any assistance. Most of the companies will make promises, and either run off with your upfront money or completely under deliver.

Fact Remains -- if the SOL has run off, then you really can just keep put for a while, let things be. If they have not, you probably should just refinance the house.

Another Possibility is asking SLS for a Loan Modification or Repayment Plan. I almost feel like you'd be better off with a refi though.
 

Griffy

LoanSafe Member
Jan 23, 2012
42
0
6
TX
Feeling sad.

Yes, it’s still accumulating interest - I got the payoff today. On the $58k, I owe an additional $42k in interest. And the SOL has not run out.

Since my SLS interest rate is at 9% and change, a refi would make more sense ... but not sure I can afford it and my debt. Selling may be my only option, as I can see another option.

Thanks for your wisdom and support!
 

OneHugeMess

LoanSafe Member
May 30, 2016
476
32
28
Call SLS and tell them, you are interested in a Loan Modification. Have them mail you a Loan Mod packet, or see if their are any offers on your account.

Ideally, you could send in a packet showing financials with limited/no savings, and just enough money to cover your expsenses and not a whole lot more.

They’d likely offer you a rate reduction, recapitalize it over 30 or 40 years, and maybe even forgive some of the interest.

You could also ignore it — for the time being, and refinance if needed down the road. Although- I would not fully recommend that option as it’s a little risky.
 

Griffy

LoanSafe Member
Jan 23, 2012
42
0
6
TX
Hi oneHugeMess,

I’m definitely not ignoring it :) I’ve talked to SLS already about a possible mod ... they asked me to get a payoff statement from my 1st which I’ve requested. They also want to send a BPO to my house to do a visual on the interior of the house. Basically they want to figure out how much equity is in the house before they commit to anything. They did indicate that the mod would at have to be what I was paying before - $520.

I also thought of another option. My current roommate has been here exactly a year. Did some research and she’s paying waaay under what rentals are going for in this area. Plan on talking to her tomorrow to see if we can find a workable compromise or I should look for a new roommate. We like each other and she’s fair.

Started my taxes and my side gig brought in over $1k in January too. So I may just be able to afford a refi after all.

Thank heaps again for all of your pearls of wisdom!
 

OneHugeMess

LoanSafe Member
May 30, 2016
476
32
28
The most important thing they are looking at is Savings. If you have lots of $$$$ in a savings or checking account, they'll give you a crappy loan mod. Keep that in mind.

Are they asking for a scanned copy of the Payoff Letter, or just a number? I would definitely look into raising the rent of your roommate as well.
 

OneHugeMess

LoanSafe Member
May 30, 2016
476
32
28
I meant to ask.... how is this account reflected on your credit report? Does it say anything about the account status like "Charge Off" or "120+ Past Due". Is it even reporting anymore?

Use CreditKarma.com or FreeCreditScore.com (DO NOT give them your CC Info) and see what is reporting.
 

OneHugeMess

LoanSafe Member
May 30, 2016
476
32
28
Also - before I forget. Go into Zillow, Claim your Home and DESTROY it temporarily. If you ever list it on the market, the realtor's report posted on the NMLS will correct everything, but for the time being, destroy the Zillow value by a good 30 - 35% or so. They literally used the exact figure from Zillow to appraise your home.

I think the biggest thing you can do - destroy your Zillow & Realtor.com estimates by changing the facts of your home. Think Construction Year, Square Footage, Attached Garage, Indoor Plumbing, Central Air. Eliminate and change all of it, until you knock off a good $130k or so. It sounds really silly, but a lot of Loan Servicers rely on Zillow & Similar Sites to check the value of a home. They also hire independent contractors & realtors who try to issue a Broker Price Opinion but... a lot of footwork is done by agents in India who use online tools like Street View & Zillow to evaluate homes in these 2nd Lien Trusts.
 
  • Like
Reactions: just_me

just_me

LoanSafe Member
Sep 14, 2015
515
38
28
Hi oneHugeMess,

I’m definitely not ignoring it :) I’ve talked to SLS already about a possible mod ... they asked me to get a payoff statement from my 1st which I’ve requested. They also want to send a BPO to my house to do a visual on the interior of the house. Basically they want to figure out how much equity is in the house before they commit to anything. They did indicate that the mod would at have to be what I was paying before - $520.

I also thought of another option. My current roommate has been here exactly a year. Did some research and she’s paying waaay under what rentals are going for in this area. Plan on talking to her tomorrow to see if we can find a workable compromise or I should look for a new roommate. We like each other and she’s fair.

Started my taxes and my side gig brought in over $1k in January too. So I may just be able to afford a refi after all.

Thank heaps again for all of your pearls of wisdom!
Re: Mod apps
Be careful about increasing your income with rental and temporary work. They will calculate your payment off that. If you have occasional cash jobs and room mate style rent, either of those two things could END for a period of time, and you will be expected to maintain the increased calculation. In other words, DON'T INFLATE your income. (or add cash income) It just inflates their calculations.