Not sure what to do next. ASC and KYHC seem to be dead ends

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LoanSafe Member
Mar 20, 2014
Hi, I'm new to this forum. I am also very confused about what the best course of action would be to take under my circumstances.

In August of 2013, we fell behind in our mortgage by about 6 weeks. This happened because I'm a teacher and I get my summer pay in advance. Our household of four expanded to seven ( one widowed parent, two 18 year-old children looking for work/ home from college) by the time August rolled around and I was basically out of cash. My husband was gainfully employed, as well. I took on an extra class and started training to teach an online class to help us get caught up. The training for the online class took a couple of months. When I finally received a class to teach, it was just one for the whole of 2013, as it would turn out. Apparently, online universities employ a wide array of adjunct faculty and there is no guarantee of when or how often you will receive assignments. So, by October, we still weren't caught up, but still about 6 weeks in arrears. We tried to work through ASC to get a modification or repayment plan to get caught up as well. We had also tried refinancing and hit the wall because we were upside down, not too deep, but upside-down, nonetheless. We asked for a rate reduction from ASC b/c we are paying 7.25%. Hubs had bad credit after his divorce in 2005, so that was the best rate we could get w/ no balloon pmt in '06. ASC wouldn't budge.

October 10 my husband lost his six-figure job. He was laid off. We were unable to pay our mortgage. I have kept all other bills current on my teacher's salary and teaching the occasional online class.

We went first through ASC. They offered to reduce out house payment by $1000, from $4400 to $3300. Our loss of income was more than $7000. My salary and supplemental income couldn't even come close to making a $3300 payment. Plus, having lost our health insurance when he was laid off, we are going through ACA and are paying $982/month for coverage for two adults. My school district only pays single coverage or full family and the full family wouldn't have been more than the ACA premiums.

After hitting the wall with ASC on that front, we found out about Keep Your Home California through our U.S. Rep.'s office. We called. We were screened and due to my husband's unemployment, we were told we would qualify for the unemployment-related program. Well, once things went to the next level, it went downhill fast. I used to receive child support for my children. My son went to live with his dad in January of this year, so that money was reduced from $800 to $200. Our caseworker thought it was suspicious that there were numerous transfers into that particular checking account. We have our joint account ( my husband and mine) and we have a separate account linked with my ex husband that I referred to as the kids' account because that's what the money was used for. He pays his child support by transferring money into that account. The case worker wanted two months' of bank statements for my ex husband's account because of these child support transfers. Then, she made the comment that if there are more transfers showing on those statements, that she would have to end this process. The implication was that we were hiding money, I guess? But I have no control over where my husband gets his money or what accounts he chooses to transfer money from. He has a joint account with his wife. These are all basic checking accounts. They are not offshore Bahamian money laundering accounts or something! Plus, we are talking a monthly transfer of $200 since January! That's a total of $600! In 2013, it was more until my son moved out, but even then, it was only $800/month. It felt like she thought we were lying, and making that threat about the existence of more transferas in accounts over when we have NO control? All of this communication was in emails or voicemails, so it was very difficult to get her to understand the reality of this situation without two-way discussion.

But that's not all. Then, the case worker noticed that we had actually fallen behind in our payments in August, not in October. She wanted to know what hardship befell us in August. We explained to her what I just explained here. She closed the file and said she couldn't help us since that didn't qualify as a hardship ( the August situation), but she did say she would submit it for review. So... the unemployment from October through March is irrelevant??? All of that was for nothing?

Was she correct? Does the fact that we were six weeks in arrears already between August and October disqualify us from the Unemployment program through Keep Your Home California? If it does, what do we do now? My husband just took a job yesterday at $13000/year less than he was making before. We could try going back to ASC, but is that even worth the effort?

Should we just let them foreclose? What consequences will there be if we do that, tax wise? Our credit is already in the toilet, so I can't imagine it will get any worse. I expect my credit card companies to start reducing my spending limits any time, now.

What will the foreclosure process look like?