Best ways to extend the foreclosure?

[ryan]

If you are in Rhode Island (?) then you will never come close to getting 2 years in your house. They have Judicial and Non-judicial FC. Average time is 60 days. You really should review your mortgage docs to see if theres a Power Of Sale clause, if so the FC time will be short.

[Sweetpea3829]

We're anticipating at least 5 months, based on what the attorney told us. Longer if we appeal, attempt to modify, etc. etc.

When we lost the first multifamily (which is how we got into this whole mess to begin with, I have another thread in regards to that situation), we stopped paying altogether in I think it was June, maybe July...they didn't foreclose until the following February.

Moreover, some friends of ours have been in their home for over a year and haven't paid their mortgage (he lost his job).

I know it can be done...like I said, right now we're hoping to force Citi to modify. But if not...then the longer we can stay (and not pay), the better off we are.

[SMinGA]

One theory:

If you complete a modification w/ Citi it will bring your loan current, add missed interest, etc. to your principal balance. You'll still be upside down, even more so actually. Resume payments, per the mod agreement.

Assuming your rental income covers the modified mortgage, then start to look for a single family home to purchase. Keep the current multi-family as an income producer for as long as you can. If at some point in the future, you lose renters and cannot re-rent and end up behind (income < mortgage, upkeep) then let it go.

[HHM]

Ok...thanks for this information. This is really good to know. It seems as though we might be able to pull off a buy and bail on the presumption that it's a multifamily and we have tenants in the property (and therefore income to support the mortgage). That said, clearly, we wouldn't have been paying monthly payments on the mortgage in the months leading up to the foreclosure and attempt at buying the new property. So, my final question (and again, I thank you immensely for your help with this), if we can provide the rental agreements for the property we are walking away from, in the process of applying for a new loan, would the potential new lender still ask for payment histories from Citi? Or do they not care as long as we're providing those rental agreements proving we have income to back up the mortgage.

You will definitely need to show payment history, there is no way around that. Again, you WON'T be able to default on the mortgage and get another mortgage after you default.

[Sweetpea3829]

SM, that's one theory that we were thinking of as well...using the mod to buy more time so to speak. But that would only be if the mod was not to our liking. For example...right now we pay 2,100 a month. Rents for 2nd and 3rd are 1425. When we first explored the mod, we learned that it would drop our payment to approx 1400/month. This is good...now the rents are covering our expenses (mostly). And if we move out, we'll have an additional $800/month in incoming rent (though that will likely be offset by our own living expenses, i.e. rent or mortgage payment).

Ideally, I would really love to see Citi reduce our principal. Considering that real estate in our area has tanked as harshly as it has...approx. 40% and still falling (and heaven help us if the economy takes this second dip they keep talking about). In anycase...that's the goal...modify the loan appropriately and we'll gladly stay and pay this house off...it will be a source of income in our retirement years. Give us some kind of rinky dink mod and we'll accept, stay current long enough to buy another home and get out.

[denisec]

All foreclosures by law have to follow your state process. Check with your state and find out the time line. If you have received your Notice of Default, you will generally have 120 days from then before a Notice of Sale, then another 30 days notice before the sale, then you could still stick it out longer, although myself I wouldn't want to push it beyond that. You can't just get foreclosed on without the necessary process, no matter whether you've not paid for 1 or 24 months.

[denisec]

The average time of a foreclosure right now is 18 months.

[Sweetpea3829]

We're still hanging in there. We got the NOD last month (October) but otherwise have not been contacted by Citi. Got a phone call from a PMI company in regards to our defaulted loan...which is interesting because we haven't had PMI in over five years.

Two weeks ago we received notification that the loan servicing is being transferred from Citi to IBM LBS. Not really sure what all of that means but I'm assuming I'll be hearing from them soon. August 1st was our first missed payment so we're going on our fourth month.

In the meantime, we lost a tenant, went a month and a half without one and replaced her. That loss of income was an ouch. But we're on solid ground now.

I did confirm that we will NOT be able to get a new mortgage loan if this house forecloses. Not for at least three years. However...I was able to confirm that the default on this discharged mortgage loan will not affect our credit and will not hinder us from getting a new mortgage loan...as long as closing is done prior to the foreclosure. After speaking with countless people...real estate agents, mortgage brokers, a few different attorneys, etc...my real estate agent finally connected me with a friend of his...a mortgage loan officer for CCO Mortgage (which, incidentally, happens to be owned by RBS Citizen's Financial Group...my former employer). I explained everything to him and he said he couldn't see why it would be a problem. He said essentially, we're more or less living as renters and a rental history would not be asked for. He ran a pre-approval...which was denied only because the foreclosure tied to the 2007 bankruptcy was apparently not closed until Dec. of 2007. So it's not been long enough just yet. But otherwise, everything else looked good.

So we're still waiting...saving and waiting. We really want to try and get another year out of this...but we don't want to miss the boat on low rates, low prices, etc. And we definitely don't want to be in the middle of closing and have this house foreclose and cause us to lose the new house.

Still hanging in here. :-)

[denisec]

Sounds like you could write a book on this at this point! I wish you the best of luck! Looks like we're all learning a lot these days. I wonder if given the fact that there are going to so many foreclosed homeowners, whether the bank will come up with some contingencies to allow folks back into the market sooner? They are going to have tons of homes on the market, without qualified buyers. I guess we'll see.