We received Notice of Default on Mortgage. I have questions...

[kl030505]

I know my attorney should be able to answer these, but it's 5am and I can't sleep, so I'm asking anyone who is here. This is a long post with lots of background info, so I'm going to bold the questions that are dispersed throughout.

We received the notice of default and intent to forclose. We have 30 days to either pay the past due balance (which is september and October's paymet) or they will accelerate the loan. Does this mean that the forclosure process has begun?

We plan on surrendering the house during the chapter 7, but I still don't really understand how it works, how it looks on your credit etc. We will file in less than 30 days time. (probably 2-3 weeks from now). My understanding is that once we file, the automatic stay will be put in place the bank will need to file the relief of stay (I wonder how long that takes)? Once they get the relief of stay, they can then finish out the forclosure process. However, I also understand that if you surrender the house during the bk it isn't considered a forclosure technically... it's only one negative, but even if I surrender the house with the bk, won't they continue with the forclosure process? I'm so confused. If we file before our 30 day time period is up, which is 11/17/07, does that mean that we filed before the forclosure process starts?

How exactly do we physically transfer ownership of the house? I need to stay until Dec 31st minimum. If I can have until Feb or March that might be good as I am finding slim pickings for available places to rent and I suspect Jan will suck too.

The only thing that makes me nervous about the entire ch 7 process is surrendering the house. We need to do it and I'm grateful we can, I just really don't understand how it works and everything I read confuses me more.

If my understanding is correct, here's the time frame...

Missed September and October payments (45 days late on September), they send Notice of Default and intent to forclose.

30 days later, they will accelerate the loan. Now what?

When does the soldiers and sailors thing come into play? In MA they have to give you 30 days to respond if you are in the armed services on active duty and that is why you haven't made payments. We are not, but they still have to give you the 30 days. I wonder if the notice of default we just got counts as the beginning of the 30 day period or if it is not until after forclosure has begun that the soldiers and sailors thing kicks in?

By the time they want to accelerate the loan, we will have filed for bankcruptcy with an intent to surrender the home. They will then have to file the relief of stay... let's say that buys me until the end of Nov for them to begin forclosure proceedings.

So, now, they have to publish for 4 weeks, that gives me until the end of december... although if the soldiers and sailors thing has not already come into effect, then it buys me until the end of December and then in Jan they will have to publish for 4 weeks which gets me to the end of January. Do we need to be out by the time they have published for 4 weeks?

Do we have to be out by the time we are discharged? So, if we file Nov 15th, then we'd have to be out by Jan 14th (which is the end of the 60 day period)?

Thanks to all for any insight you might have and for your patience with all my questions.

--Kate

[wrldshlt]

Don't worry so much

I am not sure why you would consider surrendering your home.

I can only speak to what I know and, hopefully, there is an attorney reading that will interject (I am certainly not an attorney, just someone losing my business and everything pledged to guarantee it).

What I can tell you is to contact your bank and offer them some form of smaller payment to prove your good will.

Banks really do not want to foreclose on properties and will do just about anything to avoid a foreclosure, so good will payments or interest only, or some sort of forebearance where they give you some more time will probably be something which they would strongly consider. Unless there is a lot of equity in your home (and if that is the case therein also lies a potential solution, in terms of a refi or sale)..


I have been told by my attorney that, once you file any form of bankruptcy - either outright or reorganization- the stay puts all
judgements, actions, garnishments, etc. (and foreclosures) on hold..

In a bankruptcy (at least in the state of Wisconsin where I am-and it doesn't make logical sense that it would be structured differently elsewhere, because it defeats the entire idea of bankruptcy) a person is given a "legal right" to work through our court system to figure things out.

You will need the time to go through all of your assets, your income, etc. and come up with a plan to bounce back..

In adopting some sort of plan, everyone is required to back off and let it take its course.. so, I don't understand, at all, why any bankruptcy would allow a bank to take your house while it is going on.

I believe you have time to do the things you need to.


Do you have any income, at all, where you can set up a meeting with the bank to make some sort of arrangement?


I am up every night worrying myself, and my situation is real bad, but what I am finding out is that most everything, i.e.
letters, judgements, etc. are worded and sound at first a lot worse than what they end up being.

The job of a lawyer in helping a bank draw up a foreclosure notice is to create fear, so that submission is next.

Don't be afraid, be empirical.

I believe that this great country of ours needs to change.

Hard times have befallen on many of us and the greedy who own so much of America don't give a damn about our citizens.

It is only a matter of time before all of us citizens change things.


Hang in there and read.. I am not an overtly religious person, but I read some important quotes in the Bible-- "l don't worry about tomorrow, let tomorrow worry tomorrow" is an important one. Worrying will never help you, at all.

You will get through whatever you are facing and feel free on the other side.

In the meantime, I believe with something called Equity of Redemption in real estate laws (differs a bit from state to state), you will find that you have more time in that house than you think.

My lawyer told me that, once my personal bankruptcy is filed, I will have about 18 months not making any house payments to figure it all out.

Get some sleep.

Jeff

[BassBoy]

I know my attorney should be able to answer these, but it's 5am and I can't sleep, so I'm asking anyone who is here. This is a long post with lots of background info, so I'm going to bold the questions that are dispersed throughout.

We received the notice of default and intent to forclose. We have 30 days to either pay the past due balance (which is september and October's paymet) or they will accelerate the loan. Does this mean that the forclosure process has begun?

Not necessarily. What this means is that the bank wants the amount owed, due immediately. Then, if you fail to pay what is owed, you will be 90 days late (you're are late for Sept and Oct....60 days), and then the foreclosure process will begin.

We plan on surrendering the house during the chapter 7, but I still don't really understand how it works, how it looks on your credit etc. We will file in less than 30 days time. (probably 2-3 weeks from now). My understanding is that once we file, the automatic stay will be put in place the bank will need to file the relief of stay (I wonder how long that takes)? Once they get the relief of stay, they can then finish out the forclosure process. However, I also understand that if you surrender the house during the bk it isn't considered a forclosure technically... it's only one negative, but even if I surrender the house with the bk, won't they continue with the forclosure process? I'm so confused. If we file before our 30 day time period is up, which is 11/17/07, does that mean that we filed before the forclosure process starts?

You're understanding of the how the stay works is correct. The bank can not continue forward with the foreclosure process.

Once the lender is granted a relief of stay, which is usually granted, that can take about 2 months. Once the stay is lifted, the bank can continue with the foreclosure process.

If the debtor files for BK at any time during the foreclosure process, even up to the date of Sheriff Sale, the BK will stop the foreclosure in it's tracks.

Surrenduring a home in a BK is considered one negative. I do not believe is shows up as a foreclosure as well as Included in BK.

How exactly do we physically transfer ownership of the house? I need to stay until Dec 31st minimum. If I can have until Feb or March that might be good as I am finding slim pickings for available places to rent and I suspect Jan will suck too.

If you're filing withing the next few weeks, you shouldn't have any worries with staying until sometime early next year. Foreclosures have taken from 12 to 18 in a judicial foreclosure state, but be warned that in some states, the process has been sped up, like in Ohio where I live, and it's now 6 to 8 months.

The only thing that makes me nervous about the entire ch 7 process is surrendering the house. We need to do it and I'm grateful we can, I just really don't understand how it works and everything I read confuses me more.

If my understanding is correct, here's the time frame...

Missed September and October payments (45 days late on September), they send Notice of Default and intent to forclose.

30 days later, they will accelerate the loan. Now what?

When does the soldiers and sailors thing come into play? In MA they have to give you 30 days to respond if you are in the armed services on active duty and that is why you haven't made payments. We are not, but they still have to give you the 30 days. I wonder if the notice of default we just got counts as the beginning of the 30 day period or if it is not until after forclosure has begun that the soldiers and sailors thing kicks in?

By the time they want to accelerate the loan, we will have filed for bankcruptcy with an intent to surrender the home. They will then have to file the relief of stay... let's say that buys me until the end of Nov for them to begin forclosure proceedings.

So, now, they have to publish for 4 weeks, that gives me until the end of december... although if the soldiers and sailors thing has not already come into effect, then it buys me until the end of December and then in Jan they will have to publish for 4 weeks which gets me to the end of January. Do we need to be out by the time they have published for 4 weeks?

Do we have to be out by the time we are discharged? So, if we file Nov 15th, then we'd have to be out by Jan 14th (which is the end of the 60 day period)?

Thanks to all for any insight you might have and for your patience with all my questions.

--Kate

The last part of your post is somewhat similar quesitons......
You have time in your home and you will not be "thrown" out until the after the Sheriff's Sale (the Sheriff's Sale is quite some time after your discharge) and the deed (or title) to the home needs to be re-titled to the buyer from the auction. Technically, the home is still yours, but you're not paying for it.

Take a few minutes to catch your breath and let's take each issue/question one at a time.

Everything will be just fine and you'll soon learn that you're getting yourself all worried over nothing. I would advise this though. I wouldn't hurt to start making a few inquiries about other living arrangements to get an idea of what you're up against. A lot of our members, myself included, have had a different experience and all of us will be able to advise you and help you through this.

[kl030505]

Bassboy, thanks for your help!

I live in a non-judicial state... from what I read yesterday, that means the process for foreclosure is quick.

My sister has agreed to co-sign a lease for an apartment or townhome if need be, and by the time Jan 1st rolls around, I should have enough to be able to offer a double deposit in order to show good faith to the landlord. We plan on leasing through a private owner as I suspect they might be more understanding. I've called around a little and most will say that as long as you have either a co-signer or are willing to put more down as a deposit they are ok with bad credit history. I'm not terribly worried about someone being willing to rent to us, more so that the options available kind of suck in the winter. I just really don't quite understand the full picture of how surrendering the house works and until I know the big picture I can't calm down completely.

Jeff, as for why we are surrendering our home, it's really quite simple. We can't afford it. When we purchased the home we were stretching things because my husband had expected a decent raise shortly after we closed (his employer even sent verification to the mortgage company of such), and I had just had our daughter and had been on unpaid maternity leave for 4 months. I was about to return to work, but at the time, I was an adjunct lecturer at a university, which means that it was not guaranteed or steady income. We did an 80/20 loan, so although the 80% mortgage was at a reasonable rate, the 20% mortgage was insane 11% or something like that. Plans were for me to get full time work and be able to refinance in a year. Well, a month after we purchased our home, my husband was laid off. he went into work one day and his employer pulled him in his office and sent him home. He worked in sales for a small business. The employer had not received some major payouts from clients and had no cash. He laid off half his workforce that day. It took my husband a full year to find another job, and it took me a year to find a decent full time job. I temped and taught in the evenings, but we were certainly living in the red. We have been doing that for 2 years and simply can't get caught up. If I surrender the house, which has negative equity (we bought at the top of the market, it's now plumeting, it needs repairs we can't afford to fix, etc), then I also am able to surrender the back taxes we owe and I can cut our monthly housing payment by as much as $500/month depending and we will move to a different state where other costs of living are much cheaper and my commmute to work will be shorter so less $$ in gas costs, etc. I've projected the possible outcomes of surrendering the house and not surrendering the house estimating a rent payment that is a middle of the road payment as far as I can tell, and by surrendering the house, we can begin to save quite a bit of money shortly after we move. If we do not surrender the house, we will continue to be behind in everything for another 10 months and that is even with our unsecured debt being discharged. The house is a money pit, we should never have purchased it. We will dump it, regroup and in 5-7 years or so when we have enough for a 20% downpayment on a house we love we will be able to move and still have a rainy day fund, something we didn't have before. Believe it or not, by dumping the house and renting for those 5 years we actually come out ahead in terms of $$ saved vs. equity we would have had in the house.

Anyway, now that you know my life story, thanks everyone for your assistance!

[kl030505]

P.S. Bassboy, I've been meaning to ask, is that Bass as in Bass fishing or Bass and in musiscian?

Just curious, if you are in Ohio and are a Bass fisherman it's highly likely you knew my father IRL...

[BassBoy]

Bassboy, thanks for your help!

I live in a non-judicial state... from what I read yesterday, that means the process for foreclosure is quick.

My sister has agreed to co-sign a lease for an apartment or townhome if need be, and by the time Jan 1st rolls around, I should have enough to be able to offer a double deposit in order to show good faith to the landlord. We plan on leasing through a private owner as I suspect they might be more understanding. I've called around a little and most will say that as long as you have either a co-signer or are willing to put more down as a deposit they are ok with bad credit history. I'm not terribly worried about someone being willing to rent to us, more so that the options available kind of suck in the winter. I just really don't quite understand the full picture of how surrendering the house works and until I know the big picture I can't calm down completely.

It appears you are ahead of the game. Good for you. I would assume you may be okay until after the start of the new year.

Surrenduring the house is not all that difficult really, but there can be much involved, so feel free to ask questions about any particular step in the process, and we will do our best.

P.S. Bassboy, I've been meaning to ask, is that Bass as in Bass fishing or Bass and in musiscian?

Just curious, if you are in Ohio and are a Bass fisherman it's highly likely you knew my father IRL...

The Bass is because I am a musician. My passion is drums (playing for over 22 ears), and I started playing the Bass Guitar a little over 3 years ago, so hence the username, BassBoy. How I came up with that username for this forum was from a friend of mine who is a drummer as well and plays in a band that I always go see and when I started playing the Bass guitar, he nicknamed me BassBoy.