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Deadline looming, please read...sorry a little long...

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    Deadline looming, please read...sorry a little long...

    I posted this in Foreclosures, but no one has responded. I'm sorry it is so long, but I'm really not sure whether to borrow some money to make a payment before the Jan 19th "deadline" or not. Any suggestions/advice are appreciated!
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    For background, we're filing Ch7. The house is worth roughly 180-185K (per zillow), and our first with Wells Fargo is roughly 150K, the second (GMAC) is roughly 180k, and the third (Greentree) is roughly 45k. We're okay with walking away from the house, but we're also interested in the possibility of keeping it with a modification and maybe working a deal out with the 2nd and 3rd (attorney said we may be able to pay them off for 10%, but it's a crap shoot right now).

    We have not paid our mortgage since I lost my job due to illness in October. So, we did not make the Nov 1, Dec 1, or Jan 1 payments. Our attorney advised us to apply for a loan modification and make a payment on the 1st mortgage (Wells Fargo) by Feb 1. (We get paid on the 1st, so that's the soonest we could make the payment without borrowing money.)

    I spoke with Wells Fargo, and they are sending me a packet to fill out and fax back to them. They said it could take three months to a year to get a reply on the modification.

    Here's the problem: the representative said that if Wells Fargo does not receive a payment by January 19th, then the house could go into foreclosure any day after that. She said a payment before that day would generate another "30 days until foreclosure" letter/time clock. She said that I can only mail in the payment. They will not take a payment over the phone, nor can I pay online.

    Here's my question: (assuming they don't foreclose in the 12 days between the 19th and the 31st) Do I go ahead and make the payment on the 1st of February and every month thereafter (hoping for a modification to come through in the next 3-12 months) and take the chance that they will still go ahead with the foreclosure process even though I've made payments? The representative indicated that once the 19th of January has passed, all bets are off, and they can/will foreclose--even if I make regular payment--until a modification is in the system. OR, should I borrow the payment amount to make it by the 19th to keep it out of foreclosure?
    --------------------------------------------
    As you simplify your life, the laws of the universe will be simpler; solitude will not be solitude, poverty will not be poverty, nor weakness weakness. ~Henry David Thoreau

    #2
    Sounds like a collection tactic to me. A default is a default.

    If the house is that upside, there is no point in keeping it. It will cost you too much money in the long run to make this plan work...if you really itemize out all the things that need to happen to make the house a viable thing to keep, and how much it costs, the odds of the stars aligning are particularly slim. Save your money, walk away, and buy again in 3 years.

    Things that have to happen
    1. Wells Fargo actually modifies (without more info, hard to say how likely), but probably 1 in 10 because of the junior mortgage and just how much the house is upside down
    2. File Bankruptcy and receive a dishcarge.
    3. 3rd mortgage settles (cost $4,500)
    4. 2nd mortgage settles, this one is a tremendous crap shoot as there appears to be some equity to cover the 2nd mortgage (cost $18,000-$35,000)

    In your heart of hearts, what are the odds of ALL those things happening (could you even come up with the money)? Not likely.

    Instead, walk way, rent something for 3 years, save up 5-10% down payment (10-20K) and buy again. Home prices in CA are not going anywhere. It is the least costly option and the one with the highest degree of certainty.

    Comment


      #3
      THANK YOU for responding HHM! I really needed a sounding board on this. Our intention going into the attorney's office is/was to walk away, but he mentioned that we could try modifying and, even if we were denied, it would buy us extra time in the house. In order to do that, though, we have to make some kind of payments (I'm assuming) to show that we are serious about trying to make it work. On the other hand, I am 100% in agreement with you that the stars are not going to align in such a way as to make this actually happen. So, would making a payment (kinda like rent, I suppose) and doing the paperwork for the mod be worth the extra time in the house? And, if it would, does it REALLY have to be before the 19th. I'm thinking they can wait until I get paid on the 1st of Feb...
      --------------------------------------------
      As you simplify your life, the laws of the universe will be simpler; solitude will not be solitude, poverty will not be poverty, nor weakness weakness. ~Henry David Thoreau

      Comment


        #4
        Can't really answer as to what WF will do if they do or do not get a payment. I don't really know the CA foreclosure process. If it were me, I probably wouldn't send the payment and save the money. I am not confident that sending the payment would actually stall the foreclosure.

        Comment


          #5
          Hi Wantmypeace!

          Was your first mortgage always with Wells Fargo? Or did you manage to get them after Wachovia was your original lender?

          I hope all of this works out for you ~ home is where your family and memories are happy, healthy and together - not the sticks and bricks that shelter you.
          ~~ Filed Over Median Income Chapter 7: 12/17/2010 ~~ 341 Held: 1/12/2011 ~~ Discharged: 03/16/2011 ~~
          Not an attorney - just an opinionated woman.

          Comment


            #6
            ValleYum, that is SOOO true!

            Our original mortgage was through Mid-Valley Financial (I don't even think they exist anymore), but they sold it to Wells Fargo, and it's been with them for many, many years. I don't know if it's a good thing or a bad thing to have Wells Fargo, but I'm really glad I don't have Chase. I've heard HORROR stories about them!
            --------------------------------------------
            As you simplify your life, the laws of the universe will be simpler; solitude will not be solitude, poverty will not be poverty, nor weakness weakness. ~Henry David Thoreau

            Comment

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