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Oh - sorry! I was thinking line of equity! I do have an escrow account. I never think about it and don't know much of anything except that I don't have to do anything with it.
I just did the short sale instead of foreclosure thing. From my experience, and those that I queried, the lenders don't care anymore. They are not going to go out of their way to work out any deals with you, especially when you're current with your payments. They have way too many people missing payments right now to field them all as individual cases, so they've set up production line procedures that are rarely deviated from.
For example, you will have to miss at least three months of payments before they'll even think of assigning an analyst to your case. And even so, that person will be reading from a script, as to what they can and can't do for you. There's very little discretion left up to the Homeowner's Assistance departments of these corporations.
And more than likely, your loan was bundled and sold via Fannie or Freddie. In which case, your lender is simply on the hook to maintain your loan (collect your payments, threaten you if you don't, etc.,) and has no authority to make binding deals with you, without outside authorization.
Having said that, here's my advice. Walk from the property if you have to. If you're delinquent, and your state is a non-recourse state (Google for a list of non-judicial, non-recourse states,) the lender will pay all real estate fees. Assuming it was your primary residence, and there's no secondary lien or mortgage on the property, barring other stipulations (which you will have to research,) you will walk away scott-free. I did.
I just did the short sale instead of foreclosure thing. From my experience, and those that I queried, the lenders don't care anymore. They are not going to go out of their way to work out any deals with you, especially when you're current with your payments. They have way too many people missing payments right now to field them all as individual cases, so they've set up production line procedures that are rarely deviated from.
For example, you will have to miss at least three months of payments before they'll even think of assigning an analyst to your case. And even so, that person will be reading from a script, as to what they can and can't do for you. There's very little discretion left up to the Homeowner's Assistance departments of these corporations.
And more than likely, your loan was bundled and sold via Fannie or Freddie. In which case, your lender is simply on the hook to maintain your loan (collect your payments, threaten you if you don't, etc.,) and has no authority to make binding deals with you, without outside authorization.
Having said that, here's my advice. Walk from the property if you have to. If you're delinquent, and your state is a non-recourse state (Google for a list of non-judicial, non-recourse states,) the lender will pay all real estate fees. Assuming it was your primary residence, and there's no secondary lien or mortgage on the property, barring other stipulations (which you will have to research,) you will walk away scott-free. I did.
Very unclear. You say you just did a short sale instead of foreclosure thing. OK, I can understand that.
Yet you also you would just "walk away" from the property.
NOT THE SAME THING, not even close.
I am sure we've all seen the stories of some hapless goof mailing the house keys to the lender or whatever, but with out knowing the circumstances or LAWS that apply to the OP doing so so could have devastating consequences.
I maintain that this the most prudent thing to do is to contact the lender. Let them know you are unemployed and rapidly facing the point where you can no longer remain current on your mortgage. They have to power to work something out.
It is not a lost cause. It should NOT matter to you, the borrower, who really 'owns' your mortgage. It is NOT SMART to even thing about "walking away" with out knowing the legal implications of doing so.
The OP has excellent credit, that probably DID NOT happen by being irresponsible. I am confident that better solutions can be reached.
My loan is through BB&T, one of the more difficult lenders to get a mortgage with when I did. I am hoping that because of their intelligent lending, they're not in the same boat as many other lenders right now and maybe will work with me. I have heard many stories of people walking away "scott-free" as tempting as it is, it would be embarrassing to me and my family. Honestly, I think the big issue I have is having to pay that realty fee. I orginially wanted to rent the place out, but didn't b/c of the high mortgage. If I can somehow get relief on the mortgage I can rent it out and wait for the housing market (and my own finances) to turn around.
You're not listening. If you do a short sale, you're not on the hook for the real estate agent fees--period.
"Walk away" was used in the figurative sense. The rest of what I said was crystal clear: in order to get the lender's attention, you're probably going to have to miss some payments. After which, they'll be more likely to grant you a short sale.
I had an 829 FICO before I bailed on my house; your situation is not unusual.
Last edited by Venusian_Artist; 05-22-2009 at 01:13 AM..
You're not listening. If you do a short sale, you're not on the hook for the real estate agent fees--period.
"Walk away" was used in the figurative sense. The rest of what I said was crystal clear: in order to get the lender's attention, you're probably going to have to miss some payments. After which, they'll be more likely to grant you a short sale.
I had an 829 FICO before I bailed on my house; your situation is not unusual.
I understand where V_A is coming front, but knowing that ONCE YOU MISS A PAYMENT there is a whole other set of LEGAL REMEDIES open to the lender I cannot stress enough how reluctant I would be to suggest that anyone do this "to get their attention".
Call. Send certified mail. Send a courier. Get a private investigator to trail the CEO. Get their attention in ANY OTHER WAY than allowing them to start foreclosure...
Look, the guy's going to do what he's going to do. But since he came on the forum asking for advice, I'm giving it, as someone who's actually gone through it--and recently.
Sure, it doesn't hurt to contact the lender and ask for preferential treatment. They have no incentive to give it to you when you're current on your payments, but you can ask. I spent four months going back and forth with mine, before stopping payments. I had a loan with Chase that was bundled and sold to Fannie Mae. My situation was so annoying, that I was interviewed by the Wall Street Journal for an article on how people are dealing with lenders.
The conventional advice that lenders will accommodate you because they don't want the expense of foreclosure is not necessarily correct in this day and age. With so many people teetering on the edge of foreclosure, many lenders simply don't have the resources or inclination to give people special attention. And much of the help they've hired to deal with the load of foreclosures is largely under-educated, low skill, and ambivalent to your problems.
A worst case scenario for this guy, if he can't sell his house at the current price, and he doesn't find another decent paying job is: 1. He rips through the money he's set aside for the real estate agent trying to keep his head above water. 2. When that's exhausted months down the road, he starts missing payments anyway. 3. He then collects nine-plus months of missing payments (and bad credit taglines) on his record, while the whole short sale, deed in lieu, or foreclosure gets sorted out.
So if he can't get another job, and he can't sell the house at its current price, then the sooner he starts missing payments, the sooner the lender will deal with him, and he can put this behind him---and keep what's left of his money, in the process. It can take almost a year before all the paperwork is done, and then (and only then) can he start repairing his credit. He'll need the money he's saved to continue making other payments (credit card, car, etc.) Which will make it easier to rebuild his credit, as he can show he was current on other financial obligations.
But naturally, it's his decision, and it sounds like he's made it already, so it's all a moot point.
I agree with Venusian Artist on this one from a totally financial standpoint. Morally, you guys can make your own points known. But walking away from the mortgage may be the best option to the OP.
However, morally wrong it is, you have to take care of yourself first. If you are just bleeding money, and the banks aren't doing anything to help, than it's best to conserve money (by missing payments), you potentially can go up to 12 months before the home is officially foreclosed.
Plus the OP put ZERO money down. He's playing with house money to began with. He's has very little incentive to keep his home at the expense of draining his financial assets (what little there is left).
It's like Chrysler LLC. Cerberus Capital Management "purchased" Chrysler LLC for around 7 Billion. Knowing how the financial "works". Cerberus only put down less than 150 million of their money (that sounds like a lot) but it's not. Cerberus financed the rest of the deal. Chrylser LLC did not need any money from the government. Cerberus Capital is sitting on about 30 billion dollars of cash. But Cerberus wasn't willing to infuse it's own money into Chrysler. Cerberus just "walked away" from their own obligations.
How come no one in America refuses to go after Cerberus Capital Management? They are the ones that let Chrysler fail. They should have been forced to use their own capital to bail out Chrysler instead of taxpayers.
So before you guys start bashing people from walking away from mortgages, think about the big guys who have done that with their business transactions.
As a side note...I know I'm getting a off topic here. I'm not sure why the government allowed Cerberus was to keep GMAC financial (now called Ally Bank). That's the most profitable division of GM (now they are integrated with Chrysler Financial). The government should have made Cerberus forfeit GMAC Financial.
Rarely do I have a point, but today I would like to make one.
Many of these people who are walking away are trying to justify by saying that they are simply one of millions of people in the same situation. They go on to point out that their credit will have to recover very quickly or banks won't have anyone to lend money to since everyone else did a foreclosure too.
This is simply a joke. Right now the foreclosure rate in AZ is 5.6%. So the other 94.6% of homeowners are paying their mortgage, and no not everyone is walking away from their underwater home. And in the event that after this mess is over, even 10% of all homeowners walk away, those 10% will be stuck renting from the 90% that were responsible.
So unless he wants to rent for the next 7 years? No walking away may not be the best option for OP. If he is ok renting, than absolutely.
Rarely do I have a point, but today I would like to make one.
Many of these people who are walking away are trying to justify by saying that they are simply one of millions of people in the same situation. They go on to point out that their credit will have to recover very quickly or banks won't have anyone to lend money to since everyone else did a foreclosure too.
This is simply a joke. Right now the foreclosure rate in AZ is 5.6%. So the other 94.6% of homeowners are paying their mortgage, and no not everyone is walking away from their underwater home. And in the event that after this mess is over, even 10% of all homeowners walk away, those 10% will be stuck renting from the 90% that were responsible.
So unless he wants to rent for the next 7 years? No walking away may not be the best option for OP. If he is ok renting, than absolutely.
The harshness with lenders will deal with folks that have been foreclosed will certainly be influenced by ACTUAL numbers and not merely a general feeling that "lot of otherwise good people did the same"...
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Which is it?
