B of A Foreclosure Settlement Experience

[Rover]

I thought it might be helpful to others if I shared my experience with a B of A foreclosure law suit in Florida.

Very recently B of A filed a law suit for foreclosure on my home for a second mortgage. The first mortgage is not in default. My home is worth over $500,000 and the first and second mortgages total $240,000.

I'm looking at several alternatives for preventing the foreclosure.

Earlier this week, I called the B of A mitigation department to see if they were interested in negotiating a way to end the foreclosure proceedings.

B of A told me that they could end the foreclosure suit in either of the following two ways:

1) If I paid the arrearage plus attorneys fees in a lump sum (about $17,000).

2) If I qualified for a forbearance. Under this approach, I would have to pay 4 regular payments and the remainder of the $17,000 over 6 months.

I found it interesting that even though B of A has filed a foreclosure law suit, B of A is still interested in settling without requiring me to pay the whole second mortgage. Some web sites I have read led me to believe that after a foreclosure suit was filed, mortgagors would no longer settle for the arrearage.

Have any of you had similar experiences with B of A or any mortgagor? Do any of you know or think that I could get a better deal from B of A than the two alternatives that they indicated are possible. Is B of A hiding a better deal from me that they would accept if I tried negotiating?

[SinkingFast]

Our house was in Foreclosure with Countrywide. All set to auction on the Court House steps on Tues after Memorial Day. May 30th.

Tues, the week before, we had an offer from a couple come in. I called CW, got the name of our Foreclosure Tech, and our Realtor frantically called the FT to find out what we needed to do to dodge the Foreclosure and sell to the couple that had made the offer.

The FT at CW told our Realtor a list of docs she needed to have on file before she could approve an extension. If CW got the docs, they would give us 30 days beyond the original scheduled Foreclosure to get the property Sold and Closed.

One thing we needed was a Letter of Loan Approval for the Buyers. Wouldn't you know that the Buyer's Underwriter who'd approved their Loan left the office Tues evening and would not return until after the Holiday. The Buyer's Realtor could not get the Bank to write a Letter of Loan Approval. So she took the couple to another Bank and got ANOTHER Loan Approval. This one had a couple of contingencies. Appraisal and pass inspections. Both to do with the house and not the Buyers. Our Realtor worried that CW wouldn't accept it.

Then both Realtors and the Title Company were having fax trouble with CW. They'd fax docs and CW would say they didn't receive them. The same docs were faxed 3 and 4 times or more. At the close of business on Friday before Memorial Day, CW was still saying they hadn't received everything they needed. We thought the Foreclosure Auction was going forward.

We were moving on Tues, the 30th, so I didn't even think about the house. I thought it was gone. Auctioned off to the highest bidder. Which would probably be Countrywide. About noon, our Realtor calls. The FT from CW called the Court House that morning and cancelled the auction. We had our 30 extra days.

THEN CW had to figure our pay-off. It took 6 business days to get that. Wednesday last week, CW's number came in. We were $2150 shy of having a deal with the buyers. Money we didn't have. So I called the buyer's Realtor and told her where we were. She was all in a huff because we couldn't get the deal closed. I "suggested" she drop 1% off her commission and we'd have a deal. She said she'd get back to me.

The Buyer's Realtor told the buyers what was going on. The Buyer's came up $1500 in price. Their Realtor dropped $500 off her commission. And we're paying $150.

We sold our house! No Foreclosure!!

No Deal, but no Foreclosure either.

I think Mortgage Lenders are willing to day anything that's semi reasonable to keep a Foreclosure off of THEIR books. It has nothing to do with us as borrowers. It's how they look to potential investors.

[Rover]

My objective is to keep my house, and I believe that I will be able to find a way to do that. Selling would be my last option.

[poorme]

Do some reading on the forebearance agreement. Sounds like their offer is pretty steep - but if you can make the payments it can be a good deal. My experience and subsequent learning: The mort company only wants to get your money, and they want to clear the arrearage as quickly as they can, 6-7 month forebearance loans are the norm. They get you to pay 3-4 months mortgage payment, then you pay back the arrearage over the number of months PLUS your regular payment. At the end, your payment reverts to the normal payment amt.

Here's the truth - the bank CAN extend the forebearance to whatever length of time they want - or ou can negotiate. 12-15 months is possible, it only takes their agreement. They want to make sure you 'qualify' for the forebearance by making sure you can make the payment they want - that's all that is.

Another option open to you is what's called a loan modification. Under a loan modification they will simply move the arrearage to the end of the loan, and you just resume your normal payment. TYPICALLY, THE BANKS WON'T TELL YOU ABOUT THIS OPTION. YOU HAVE TO ASK FOR IT - SO RESEARCH FIRST.
Good Luck.

[Rover]

poorme,

Thanks, very helpful.

[SinkingFast]

Stay on top of the Loss Mitigation Dept, tho Rover.

We applied for Forebearance. A short term, no payment Forebearance. Sent a Hardship letter, did the income to expenses thing and such. We had a Buyer who was contingent. We were asking for time to allow our Buyer to sell his house so he could close on our deal.

Talking to CW's Work Out Dept (that's what they call it), Reps have told me on 3 seperate occassions that we were "approved for a DIL" on May 5th. We never applied for a DIL. BUT, by May 5th, we were already in the process of being Foreclosed upon.

Midleman is a Debt Negotiator. Maybe he'll chime in here and give you some tips. Or you could try PM'ing him to see what he suggests.

[Rover]

SinkingFast,

What is a "DIL"?

[poorme]

DIL = Deed in Lieu.

Essentially, you sign over your deed to the bank and give the house back to them in lieu of everything else (foreclosure, etc). They save money, you lose house. No sale opportunity...you just give it back but avoid a foreclosure.

[SinkingFast]

DIL = Deed in Lieu.

Essentially, you sign over your deed to the bank and give the house back to them in lieu of everything else (foreclosure, etc). They save money, you lose house. No sale opportunity...you just give it back but avoid a foreclosure.

Yep. And evidently from my chats with Countrywide, the borrower's DIL offer has to be approved and accepted by CW. Attnys told us if we did a DIL, the Lender would send papers for us to sign. So if we were approved for a DIL, CW certainly never sent any papers.

The only written correspondence we've gotten from them in the last couple of months were the letters from the Law Firm CW hired to be the Trustee of the Foreclosure Sale.