Which to do 1st?

[ediev]

Nope attorney has not seen any 2nds filing before the 1st does. And pretty much feels the same (it's a "bluff") & is not anticipating they will act quickly. But those are famous last words, right?

I mentioned to her the idea that their motive could be they are interested in collecting the insurance that THEY may have purchased on the lien, but she also doubts that. For what it's worth she also noted that many insurance providers simply aren't even paying up on foreclosed liens. Don't know how accurate any of this is...all heresay.

I am hopeful my attorney's answer to summons will stop the foreclosure, at least temporarily so I have more time to save and prepare. But even without doing anything to delay the foreclosure, I have learned an avg foreclosure around here takes a minimum of 6 months. I'll prepare for that - but hope for a year to 1.5 years.

[albacore44]

what does your attorney say about the 2nd buying out the 1st ?? has he ever seen it happen in his experience ??

Realtytrac has you listed in Pre-forclosure. The next step would be to set an auction date when they intend to foreclose.

I think your attorney is right. if he files an answer to the summons in this market, it will sit for a long time, particularly since it's a 2nd, and their options are limited.

[ediev]

Has me baffled too Albacore. But why would they want to scare me? Perhaps they think I CAN pay them what is owed? Or is it like I surmising, they may actually benefit from a foreclosure? Who knows - no method to this madness.

From what I've learned from my mortgage attorney (and others) - the majority of people do NOTHING in regards to "fighting back" - just ignore the whole thing - and get default judgments. They simply sit back and let their house foreclose - those are the ones the banks are dealing with (overwhelmingly so) - which are cheaper and easier for them to do. When an owner "fights" - they kinda of push these cases aside, for now it appears, indefinately. My attorney has not actually finished with a f/c in almost 2 years. Meaning, she will answer the summoms with a simple request for more time, for example. And for the most part, the banks do not take the next step in the process - she is hearing nothing - her cases are ALL just sitting, waiting! I'm not counting on this - especially since my 2nd is acting so suspiciously, but i would not be surprised to find myself in the same situation.

I checked out that site BTW- very interesting stuff. I would like to see the other details there - but you have to become a paid member. Down the road I'll probably take them up on the "trial offer" when i know there might be more information for me to see. It does have my home listed as "pre-foreclosure -lis piendis". Meaning - a suit has been filed. It also has my home listed there at $126K? Very interesting indeed and only proves how very SOL the 2nd is. Maybe I should send them this listing? LOL

[albacore44]

i really think they must be bluffing. If you have not filed BK yet they can try to scare you by filing suit. i'm not sure how the laws are in Fl. .

I filed Ch-7 on 1/23. my house is underwater or slightly above. my 1st is $417K and 2nd (Heloc) $241K. My plan is to stop paying 2nd after discharge and try to settle, hopeing the sell to a JDB. I cant possibly believe HSBC (2nd) would buy my 1st (Citi), just so they could foreclose

[ediev]

whats interesting is the thinking here has been that the 2nd would have to buy out the 1st at the courthouse when it goes up for auction. So both loans would have to be insured, and the 2nd would have to co-ordinate with the 1st, so they know its insured for the 2nd to come out with anything.

i wonder if its just a bluff on the part of the 2nd ?? Did you get a date for the Auction ?? You should be able to go to Realtytrac.com, type in your address, and you can see your forclosure status

Albacore - I didn't think of that - you're absolutely right. The 1st would have to be paid at minimum $225,000 (the 2nd is 100K). Houses in my neighborhood have sold in foreclosure for LESS THAN 100K! Slight chance mine would go for a bit more -but let's say 125K. That means they would have to give the 1st the difference of 100K...which IF they have insurance on the 2nd they would still have to deal with the 100K overage? Is this correct?

I'm a bit confused how the whole sale takes place. Is there a minimum sale price? Does my first have the right to refuse an offer? Why would they refuse? Would the 1st negotate a sale price with the 2nd?

Also, I do see that my 2nd has many, many foreclosed properties listed on thier bank's website that they now own and are trying to sell (REO's). Could it be that this bank is attempting to turn losses into gains by foreclosing on properties, buying them for as little as possible in order to turn around & sell them for a profit themselves? Again, a long shot - I don't believe banks really want this hassle, for what would amount to be very little to gain...

The bank could also very well be bluffing. They probably grew tired of me ignoring them -and maybe just want me to negotiate? Who knows, only time will tell. In all reality, I'll probably never know.

There is not a sale date yet. I'm at the very first steps of foreclosure, basically where they've notified me that they have filed a suit with the courthouse. FL is judicial - so they have to go through the courts and it could be dragged out for quite some time should I choose to answer their summons and follow-up throughout the process, tying them up with requests for various things and etc....which is what I plan to do.

Thanks for the link btw - I'm off to go check it out!

[albacore44]

whats interesting is the thinking here has been that the 2nd would have to buy out the 1st at the courthouse when it goes up for auction. So both loans would have to be insured, and the 2nd would have to co-ordinate with the 1st, so they know its insured for the 2nd to come out with anything.

i wonder if its just a bluff on the part of the 2nd ?? Did you get a date for the Auction ?? You should be able to go to Realtytrac.com, type in your address, and you can see your forclosure status

[ediev]

Good point Kar (and I am planning on BK to avoid anything like this)...however I do not have PMI - I was referring to the Bank buying their own insurance - which I guess they do when they think a loan is risky? It's really the first I've heard of this practice and do intend to look into it further.

[kar]

Forgive me if Im not using the proper terminology. Let's see if I can paint the picture for you.

I was working with my FIRST on a loan mod - stopped paying the 2nd to see what the 1st would do for me. If it was affordable - I was going to turn to the 2nd to see what they would do...blah blah blah...all this came to a hault when....

7 months after I stopped paying the 2nd, final stages of gettin my loan mod with the 1st - the 2nd files a "NOD" - properly serving me with a summons, deliverd in a nice little package by a very nice sheriff. I have not visited the county website to look at my papers - didn't think to - they're right in front of me. Would visiting the site, aide in keeping track of my case and what is or is not happening? That would be a good thing.

I too thought the 2nd wouldn't bother attempting to foreclose - heard this a million times - they stand to gain nothing - will actually lose more $$$$....

BUT...as a very intelligent person pointed out to me in another thread on this site, that I kinda hijacked....(and I do believe this to be the reasoning) is that a bank can buy insurance on your loan. If you default on an insured loan, they can collect the insurance money, but only after the house forecloses. Because they left my HELOC open for a very long time (with money in it) - well past the point when home values started to decline...and because I simply can't think of any other reason they would actually go through with the foreclosure - I'm betting they are looking to collect insurance $$. I could be stretching here - but I really don't care about their reasons at this point - I don't want the house - should have never been fighting for it. I'm glad they forced me to wake up and smell the coffee...hmmm so sweet and savory it is! Only concern is if this is true, how it will affect the speed of my f/c.

Please keep this in mind. If your HELOC or first mortgage have mortgage insurance (PMI) on them and the lender put's in a claim after the foreclosure, the insurance company can come after you for the amount paid to the lender. If you get both your mortgages discharged in your chapter 7 BK you won't have to worry about any one of them including the insurance company trying to collect because your debts will be discharged.

[ediev]

"I should note, my 2nd has already served us."

What do you mean by served? I don't know anything about FL foreclosure but the official timeline shouldn't start until they file the Notice of Default with your county recorder... you will be served with a copy of this legal document. You should even be able to see a copy of it online though your country recorder's office.

But if you are underwater that much your second shouldn't have any teeth at all. If your home is worth less than you owe on the first then the 2nd wouldn't have any reason at all to pay for starting a forclosure... they are going to get NOTHING. They are pretty much an unsecured debt at this point. So I'd just be really interested in hearing what exactly the 2nd has served you. There are all kinds of other stuff like a "Notice Of Intent To Accelerate" and what not that they can send that doesn't really mean anything.

Or after re-reading some stuff did you get a NOD last year... then start up your trial payments and now considering not paying on those?

Forgive me if Im not using the proper terminology. Let's see if I can paint the picture for you.

I was working with my FIRST on a loan mod - stopped paying the 2nd to see what the 1st would do for me. If it was affordable - I was going to turn to the 2nd to see what they would do...blah blah blah...all this came to a hault when....

7 months after I stopped paying the 2nd, final stages of gettin my loan mod with the 1st - the 2nd files a "NOD" - properly serving me with a summons, deliverd in a nice little package by a very nice sheriff. I have not visited the county website to look at my papers - didn't think to - they're right in front of me. Would visiting the site, aide in keeping track of my case and what is or is not happening? That would be a good thing.

I too thought the 2nd wouldn't bother attempting to foreclose - heard this a million times - they stand to gain nothing - will actually lose more $$$$....

BUT...as a very intelligent person pointed out to me in another thread on this site, that I kinda hijacked....(and I do believe this to be the reasoning) is that a bank can buy insurance on your loan. If you default on an insured loan, they can collect the insurance money, but only after the house forecloses. Because they left my HELOC open for a very long time (with money in it) - well past the point when home values started to decline...and because I simply can't think of any other reason they would actually go through with the foreclosure - I'm betting they are looking to collect insurance $$. I could be stretching here - but I really don't care about their reasons at this point - I don't want the house - should have never been fighting for it. I'm glad they forced me to wake up and smell the coffee...hmmm so sweet and savory it is! Only concern is if this is true, how it will affect the speed of my f/c.

[DebtStinks]

"I should note, my 2nd has already served us."

What do you mean by served? I don't know anything about FL foreclosure but the official timeline shouldn't start until they file the Notice of Default with your county recorder... you will be served with a copy of this legal document. You should even be able to see a copy of it online though your country recorder's office.

But if you are underwater that much your second shouldn't have any teeth at all. If your home is worth less than you owe on the first then the 2nd wouldn't have any reason at all to pay for starting a forclosure... they are going to get NOTHING. They are pretty much an unsecured debt at this point. So I'd just be really interested in hearing what exactly the 2nd has served you. There are all kinds of other stuff like a "Notice Of Intent To Accelerate" and what not that they can send that doesn't really mean anything.

Or after re-reading some stuff did you get a NOD last year... then start up your trial payments and now considering not paying on those?

[ediev]

I think we're really getting to the overall issue now....which is "what is the best & safest route to position myself to SAVE $$ and KEEP IT?!"

No one can guarantee me anything. My mtg attorney has emphasized this to me numerous times - and I like her for that. I need "worst case scenario" here and will work with that. Prepare for the worst - hope for the best - only thing I can do.

But to try to be brief - my mtg attorney did do a look-thru of my papers - says there's ALWAYS things that can be used to stall - we're not actually trying to win the case here (hope no one thinks less of me for that). She's hired to properly answer the summons' from here on out with applicable and legal requests, which will lengthen the foreclosure timeline as opposed to sitting back and letting them get a foreclosure. If we did nothing, I believe in Florida the fastest it can happen is 180 days after being served.

DebtStinks - this brings me to the point that I'm already passed NOD. I'm at the "Ive been served" stage. I think I need to take a step back and try to verify what the minimum foreclosure timelines for FL are with/without doing anything to slow it down. I will see if the worst case scenario will afford me enough time to do what needs doing - then get to it.

I am a do-it-yourselfer for the most part. This just so happens to be one of those things I want a professional handling while I sit back & nag them to death to make sure they are handling it well. This includes the foreclosure and the bankruptcy.

Hakuna - you're a "chica" - a girl? Shoulda known...

[DebtStinks]

DebtStinks - my attorney is not working on a loan mod. This is no longer in my plan which initially I WAS attempting to do myself - but came to the same rationale as you (thankfully-phew!)

I hired her because I was served by my 2nd. She's handling the responses to the summons and hopefully will be able to afford me the time to come up with enough savings to move. She feels if I file BK first - her ability to prolong the foreclosure legally (with things like requests for more time, requests for paperwork and whatever else they do)...will be limited b/c by me not reaffirming my mortgage is telling the powers that be - "I don't want my house - take it - do the foreclosure". I hope this clarifies things?

You are on the right track for sure. It's going to be a balance between extending the foreclosure to build savings, making sure you don't build assets beyond what you can exempt in bankruptcy, and your income levels in relation to your ability to qualify for chapter 7. All 3 of these things working together will determine the best timing for your BK.

Get a soild budget figured out... and then see out how much you can bank into savings each month without having to making any debt payments (loans, credit cards, mortgage, etc). Look into the exemptions and see what areas that you can spend some cash on to get caught up on things. Get the card fixed, get any pending medical stuff done that you haven't had the money to do, stuff like that. With this information you will be able to figure out at what point your savings will be maxed out under FL exemptions. Once you get to this point it doesn't make much sense to wait any longer since savings beyond this will just go to your bankruptcy estate.

For us it worked out well... I wanted to file BEFORE we received our NOD which starts the foreclosure timeline for us. Which in CA it takes about 4 months at best (3 months redemption period, then 3-4 week for a sale date). So once we receive the NOD we have a 4 month warning. Typically you wont' get a NOD until you are at least 3 months late. So we stopped paying on everything for 4 months and filed. We were just under the exemption limits. I was scared that BofA was going to hit us with that NOD in our 4th month of no payments. BUT... they didn't file to life the stay and we have now been discharged for over 4 months and still not a word from them. Once they do finally file the NOD we still have a min. of 4 more months.

So I think your best plan is to sit down and figure out how many months you need before you should file for bankruptcy. Then tell your mortgage attorney that your main goal is to keep the banks from hitting you with a NOD before you file for bankruptcy. While in bankruptcy they can't hit you a NOD unless they lift the stay which requires a petition with the court (takes time) and they might not even bother. So that would give you another 3 months or so before you even get the NOD which starts the foreclosure timeline (which I'm not familiar with in FL).

[HakunaMatata]

Hakuna - who are you? Where did you come from? You really have a gift at putting complicated thoughts and concepts into writing (if you don't work in the field - you really should think about it-or be a life coach or something - geeze). "Nancy Kerrigan moment" - he he.

I'm an insolvent chica from the Detroit 'burbs who doesn't have a freaking clue what I want to be when I grow up. Yeah. I still have Kerrigan moments!

Has the mortgage attorney conducted a forensic document review? Are there any indicators you have a strong reason to stall foreclosure? Have you monitored local foreclosure timelines (preferably with the same lender)? A standard foreclosure (without a mortgage attorney) may take 12-18 months. Unfortunately, no one can confirm your actual timeline. I'm sure the attorney has tactics to delay foreclosure; although, I'm not sure these are guaranteed. It would be unfortunate to invest in a scenario that may 1) unfold naturally or 2) cost without achieving intended consequence.

My greatest concern would be how you manage your savings. If you can live "rent-free" for more than a year, can you properly spend down or exempt this money? Will you feel obliged to decline business opportunities to avoid rising above the median? If so, will these actions have adverse business consequences that will carry into your future (impeding the opportunity for longstanding business relationships)?

You have a really good grasp on your planning; and, I think it's wonderful you don't feel forced to make an immediate decision. Many of us head into BK kicking and screaming (or in your case with a one-two punch) and exit quite content.

[ediev]

If you intend to file BK, I would do so BEFORE the foreclosure has finalized. I, personally, didn't regard separate foreclosure and separate BK as favorable. I opted for the single, big, all-encompassing hit...good 'ole BK. You can include your mortgage in BK and it will be reflected on your credit report as such (instead of a foreclosure followed by a BK). I didn't want to have to deal with the double whammy separated over time. I intend to rebuild my credit; and, I'd prefer to know where I stand rather than anticipate future building blocks. BK can be advantageous in terms of future mortgage lending as well. The duration for getting a mortgage following BK is less than that of a strict foreclosure.

In my experiences, I haven't found many professionals who aren't biased. Your mortgage attorney may have an altruistic agenda for you; however, I'd question her motivations. If she truly believes she can buy you time in the house (more than you would receive during the BK process), ask for reasonable evidence.

You don't owe the current BK attorney benefit of doubt. Of course, you can pose questions and he may respond favorably. Some of us are intimidated by knowledge or simply don't know how to properly gauge alleged "knowledge". Employ your instincts and don't forget...YOU are the interviewer and this person is being hired by YOU to best represent YOUR interests.

As previously mentioned, emotion ebbed and flowed during my initial BK stages. I experienced morality issues, slight embarrassment (I was comforted by knowing I was making the best decision regarding my house), and notions of failure. I even had Nancy Kerrigan "why me" moments. Despite this, my logic and business-minded focus prevailed. As a result, I began sharing my situation and potential paths with others. I suppose I took the risk of external worry and judgment (I know I'm better at beating myself up than others!) in hopes of receiving guidance and feedback. I was initially shocked by the amount of successful, happy people who had BK backgrounds or those who fostered pro-BK stances. I now understand it.

To me, BK isn't exclusively about surrendering debt. It also involves surrendering stigmas and fears.

Hakuna - who are you? Where did you come from? You really have a gift at putting complicated thoughts and concepts into writing (if you don't work in the field - you really should think about it-or be a life coach or something - geeze). "Nancy Kerrigan moment" - he he.

So the double whammy & importance of BK first - i understand and am on that same boat (lawyers included). What was suggested is this:

1) Mortgage Attorney fights the foreclosure with her lawyer tactics (for who knows how long - minimum a year - max - infinity). She tells me mostly nothing happens for extremely long periods of time.
2) When the bank finally proceeds and gets a sale date - BK attorney files the "Intent to file BK".
3) Wait for banks to say "shit or get off the pot".
4) BK attorney files the BK officially...
5) Banks ask for relief of stay "MAYBE"...and proceed with f/c, regardless of their requests - discharged 2-3 months later.
6) Mortgage Attorney does her thing to draw out foreclosure so that it happens AFTER the discharge...which essentially could be "doing nothing" due to the typical amount of time scheduling a sale date alone in my neck of the woods is on average no sooner than 180 days out - total back log.
8) Discharge happens then Foreclosure happens.

It's like a 1-2 punch. Except I'm thinking the "2" should happen sooner than they think it should, specifically due to my self-employed status. Again - don't want to limit biz growth forever. Not to mention - I WANT TO SAVE MONEY WHILE WAITING FOR THE FORECLOSURE TO FINISH!

They both agree at least 12-18 months MINIMUM before I would have to file BK. Or, I could be sitting here for many years before anyone forces me to move ahead with the BK - this is not a good scenario for me either. Talk about being trapped and unable to progress in your life?

So the plan all along is definately to make sure the BK is discharged first - absolutley understand the importance of that.

I just want to do the BK w/o waiting for the banks to force me to do it. I want to do it when it works best for me and my financial situation - to ensure I qualify for BK 7. Just don't want to cut off my nose to spite my face, enabling them to speed up the foreclosure and not giving me enough time to save some $$$ for what lies ahead.

I don't have to rush out today to file BK - but I will continue evaluating and monitoring my personal financial situation while interviewing attorneys, and basically staying on top of what's happening in order determine when is the best time to pull the trigger and who I'm confident in to do the pulling. I'm not trying to stay in my home rent free forever. Just want to use the time the laws provide to position myself accordingly. A better tomorrow is after all one of the upsides to filing BK, right?

Hope this makes sense.

[ediev]

Well what's your mortgage attorney's game plan to make your $175k underwater investment something you should stick with? Lower your interest rates and extend the terms out to 40 years? Great now you have lower payments on a crappy investment that you MIGHT break even on after 40 years. Or is he saying that he can shoot for a principle reduction? Which first are VERY rare... and guess what even if you do get one there is usually a little * there that points to the fine print. If you ever sell the house for a profit you have the pay back the forgiven balance. Sweet now you have an investment that really isn't an investment since you'll never see a profit.

Really the only way to get money back out of that place to stay in it and stop making payments. Stay as long as you can and bank the mortgage payments into savings. Unless I'm missing something... what's your attorney's plan?

DebtStinks - my attorney is not working on a loan mod. This is no longer in my plan which initially I WAS attempting to do myself - but came to the same rationale as you (thankfully-phew!)

I hired her because I was served by my 2nd. She's handling the responses to the summons and hopefully will be able to afford me the time to come up with enough savings to move. She feels if I file BK first - her ability to prolong the foreclosure legally (with things like requests for more time, requests for paperwork and whatever else they do)...will be limited b/c by me not reaffirming my mortgage is telling the powers that be - "I don't want my house - take it - do the foreclosure". I hope this clarifies things?