Foreclosure Questions
Many homeowners have foreclosure questions and they need legitimate answers to help them make an educated decision on the best way to proceed through the process.
Below are some of my best blog posts on this subject and I hope they help you in your quest for answers.
If you have a question that is not answered below, please feel free to email me (Moe (at) LoanSafe.org ) or you can visit my free online forum at www.LoanSafe.org/forum and join 16,000 homeowners just like you who are fighting to get a loan modification or bailing on their underwater homes.
If your a homeowner and you’re in foreclosure, you will most likely want to know your rights. Unfortunately, you have very few rights outside of what is allowed by your state’s laws and these laws primarily deal with specific time frames a lender must follow during the foreclosure process.
Understanding your states laws and the time frames allowed under them, will give you the information you need to make an educated decision.
Many homeowners want to know the ramifications that a foreclosure will have on their credit and most importantly, their lives.
The facts are that a foreclosure is definitely not the end of the world and it isn’t really going to change your life that much in the long term. Yes, the short term effects will suck, but in the end you may just be better off.
Yeah, you heard it right, you just might find yourself in a better place, sleeping at night and living a more gratifying life because you’re not strapped to an unaffordable mortgage and home. But you’re still going to have to pay the piper in more ways then one for your new found debt free renting life.
Unfortunately, many homeowners simply don’t know what to do when they are in foreclosure. I get many emails asking me, “Will filing bankruptcy stop foreclosure?”
Well, yes and no!
Many homeowners will file for Chapter 13 specifically to stop their sale date. Only to find out later, that their mortgage is not included and now they may have both on their credit reports. In most cases, when you file BK, an automatic stay is granted prohibiting your creditors from attempting to collect or contact you.
Greetings Moe,
I have read many of your different blogs on various websites. Your passion for helping others is well documented. If you don’t mind, I have almost completed my loan mod with American Home Mortgage. I’m pleased with their first offer, but should I asked for more. For example, could they wave the $500 Modification Fee?
I have listed below the details of my modification (my previous APR was 6.625%):
More and more reports are coming out of foreclosed homeowners stripping their properties of anything of value before they bail on the bank.
In my forum over at LoanSafe.org, I am getting a lot of questions in regards to what I can take and what I can’t take. Often, these people used their own money to improve the home and they feel that its is rightfully theirs.
Let me shed some light on what is considered a fixture, security interest and what you own and do not own when you have a mortgage. This is an actual exchange from California Professor Shays, myself and a forum member yesterday.
Millions of homeowners such as yourself are suffering financially and they are desperatelylooking for mortgage help on the internet. You need to be really careful when searching for lender who offers loans for people in foreclosure because of the many scams that are out there.
What you do need to understand is that there’s no shame in having problems and hiding them just makes overcoming them harder. You have made the first great step of educating yourself and I commend you for doing that.
Getting a mortgage after foreclosure is going to be no easy task. In fact it is going to be darn right impossible for a minimum of at least 3 years to a more realistic time frame of 5 years.
For example, Fannie Mae now requires a minimum of 5 years from the date of foreclosure for you to be able to qualify for their mortgage programs. The Federal Housing Administration (FHA) is a bit little more lenient with their loan programs.
{ 4 trackbacks }
{ 35 comments… read them below or add one }
CAN A ATTORNEY FROM CALIFORNIA OFFER LOAN MODIFICATION TO NEVADA STATE
Hi,
Currently my mortgage is in the “early” stage of foreclosure. I have submitted my information to my bank for a modification over 4 months ago. I call them every week to find out the status, and of course it is still being reviewed. Today I saw a realtor take a picture of my house. Right now I am terrified and I do not want to lose my home.
My question is will my mortgage servicer work out a modification for me, or will my house be sold from under me. I have been able to get some money together to try and work something out with them, and save my home. I live in NJ. Can the mortgage company sell my home without trying to work with me first.
I really need help fast!!!!! Please any insight is really appreciated.
Do you know anything about a modification company known as American Loan Modifications in FL? They are out of Pinecrest, FL on the east coast south of Tampa.
Moe,
I have signed up for your forum and need help, but I cannot post any messages to ask for help.
Please put me in a status wher I can post a thread and get some answers.
Regards,
Mike Hayes
I am into my 8th month of not paying my mortage, and B0fA is finally (two weeks ago) asking for documentation for a “loan modification” program for me. But, before all this, I was mailed all the papers saying that my home will be foreclosed on 9/15. I am located in AZ. My main question is, will they stop the foreclosure procedings since they are working with me in their loan modification department? This is what I’ve been verbally told by B0fA and also the loan modification company I did hire to assist me (B0fA would not work directly with me in the beginning, so hired a company), but I can’t seem to get that in writing, and I’m afraid when 9/15 rolls around , my locks will be changed. Any comments on this?
Linda,
I WILL be able to help you out and get this taken care of for you! Please contact me so we (together) can avoid the foreclosure from happening.
Talk to you soon!—– William
my home was sold during a loan modification with littion ,Quility loan sold it without telling Littion .When I was in a loan mod. I to hired a loan mod.company and that turned into a scam they took my 3,000.00 dollars and let my home get foreclosed on I now hove aprox. two weeks to get ready for a court hearing . I need help can you help
help I was scamed by a loan modification comp. I was also not told my home was sold when I was in my modification . Littion was working with me when Quility loan sold my home right underneth me can you help me I have a court date in aaprox. two weeks.
Hi, I just want to encourage people who are trying to find some help with modifying their home loans, I was scammed by a company name Infinity funding and now I just got word a couple of days ago they were shut down by the FEDs. I guess that old saying is true you will reap what you sow, so I started Googling Loan Modification Scams and to make a long story short I got hooked up with a Attorney and my home loan was modified, that was 2 months ago, so for those of you that are getting discourage don’t, their is help!! just do your research.
i need to find an attorney to help me.i have contacted some here with no results..BOA says that i am in review for modification, pending investor approval, but i am receiving documents from the attorneys handling the foreclosure.i dont have much time at all and dont want to be scammed by someone promising to help but just taking my money and running with it.
i have 4 kids and dont want to lose my home just want to modify my mortgage.
I have a first mortgage which is current and my second behind two months and was sent a foreclosure notice.. I spoke to an attorney today and was told I’m stuck in a hard place. My first mortgage is 102,000 thousand and my second is 116,000. Since the second is held by an investor they are impossible to modify. I’m a single mom and have no where to go. My second just is at 12.50% and it’s killing me. Do I have any options, my home is not worth what I owe.
To. Bank of America, When I felled, behind on that first month. Things got worst for me. I’m writing, cause I don’t want to lose my Home. I’m with NACA, Home Save Program, What do I need to do. Patricia A. Carter, Account Number, 141958608, Address, 10151 Hidden Branches Way, NE Covington,Ga. 30014-1522, Phone, 678-365-8357 Please, Help me, I don’t know, what to do.
i have been given the foreclosure sale under power.
could i by moor time?
I hope that you may be able to help, my family and I moved out of a property due to work about 5 years ago and it has not sold yet and is need of many structural repairs. I know I cannot get market value for the home nor what I currently owe. If I foreclosed on that property how would it affect the current property I live in? Thanks for your help.
My husband, 3 kids and I relocated to my father-in-law’s large home in the country to help him meet his mortgage payments so he wouldn’t lose his house. Turns out he was in deeper than we thought and 2 weeks after we moved in he received paperwork announcing the house was going up for public auction Oct 19. I am at a loss what to do to help him keep his house. BofA hasn’t even offered him loan modification, and even if they did would it be done before Oct 19? We need help desperately
I am looking to purchase with cash, a home that is in foreclosure. I don’t know what stage of foreclosure it’s in but it has been about a year since the young couple “walked away from it. In going to the town hall I have verified the former owners and the mortgage is with HSBC. Can I purchase this property directly from the bank or what do I have to do. The property is in Lancaster, New York. Thanks Tony
Do you have to continue to pay rent to the landlord if there house is in foreclosure. I do not want to pay rent if she no longer making payments. I would rather save my money to move within 60 days.
FNMA just came out with a new program for folks in foreclosure who don’t qualify for a MOD. Does FHA have a Deed for Lease program with buy back option??
Do you know a legitimate company/attorney that can help with a loan modification? I am located in Orange County in Southern California. Bank of America is has been giving me the run around. They have sent me a notice to start forclosure in a few weeks even though I applied for a loan modification in September. They keep telling me by modification hasn’t been assigned to anyone. I’m trying to keep my home as I have put so much into it. I have heard radio commercials for a company called Liberty Law Firm that is stating that on the spot they try and get you a loan modification if they don’t you don’t have to pay. If they do the cost is only $995. I can’t tell if they are legit as they are not listed in the BBB. Please help!
any info on the procedures to TRANSFER a loan from one bank to another is needed NOW…!!! (11/22/09)
I ‘had’ a 1st mortgage w/SunTrust and a 2nd w/Suntrust. SunTrust ‘transferred’ the first to Chase, but never told me about it. Now Chase wants late fees, additional interest, blah, blah…
What are the ‘bank steps’ they’re supposed to follow to transfer a loan? Let me know ASAP…!!! THanks goigroup@g m a i l.com
Currently my mortgage is in the “early” stage of foreclosure. I have submitted my information to my bank (BOA) for a modification over 2 months ago . I call them every to find out the status, and of course it is still being reviewed. I have had to fax them several times the same information to no avail. Today I was told that there wasn’t an option for me in the modification program, and I needed to come up with over $12,000 really soon before a sale date is processed. Do I need to hire an attorney to assure that this is the only option I have? For Pete’s sake, if I had $12,000 doolars plus lawyer fees i wouldn’t be asking for help!
I live in Tennessee, is there a real estate attorney you can recommend for me?
I am 10 months behind on my mortgage. I applied for a modification June 1. I call everyweek until Sept 1. At that time we filed for bankruptcy. Modification stopped at that time and they won’t talk to me till the 60 days is up from that. I would like to keep our house. My husband is in contruction and was out of work until now. We are able to do a mortgage but maybe at a cheaper payment. We have gotten a letter for foreclosure. What can we do. I want to redo my modification but can’t talk to them yet. Please help me
I am currently not late on my mortgage w/Wells Fargo but as of next month I will be unable to make my payment due to income issues. I want to approach WFB for a loan modification but after reading all of the horror stories I’m not sure where to start or if there is any point. My income level changed a few years ago. I’ve managed to stay current using my savings but now my savings has run out. Any suggestions?
question if my home was forclosed and it sold for more than the mortage owned and there was a surplus of money left after all was paid what happens too the surplus. example if i owed 70 thousand and it was sold for 80 thousand what happens too the surplus
The FDIC has set up sweetheart deals with lenders called “loss sharing agreements” that financially encourage lenders to foreclose rather than modify a loan.
An excerpt from the most well-articulated thoughts on the subject that I have seen: (be prepared to be floored when you read the entire post)
When OneWest took over Indymac, the FDIC and OneWest executed a “Shared-Loss Agreement” covering the sale. This Agreement covered the terms of what the FDIC would reimburse OneWest for any losses from foreclosure on a property. It is at this point that the details get very confusing, so I shall try to simplify the terms. Some of the major details are:
* OneWest would purchase all first mortgages at 70% of the current balance
* OneWest would purchase Line of Equity Loans at 58% of the current balance.
* In the event of foreclosure, the FDIC would cover from 80%-95% of losses, using the original loan amount, and not the current balance.
How does this translate to the “Real World”? Let us take a hypothetical situation. A homeowner has just lost his home in default. OneWest sells the property. Here are the details of the transaction:
* The original loan amount was $500,000. Missed payments and other foreclosure costs bring the amount up to $550,000. At 70%, OneWest bought the loan for $385,000
* The home is located in Stockton, CA, so its current value is likely about $185,000 and OneWest sells the home for that amount. Total loss for OneWest is $200,000. But this is not how FDIC determines the loss.
* ‘FDIC takes the $500,000 and subtracts the $185,000 Purchase Price. Total loss according to the FDIC is $315,000. If the FDIC is covering “ONLY” 80% of the loss, then the FDIC would reimburse OneWest to the tune of $252,000.
* Add the $252,000 to the Purchase Price of $185,000, and you have One West recovering $437,000 for an “investment” of $385,000. Therefore, OneWest makes $52,000 in additional income above the actual Purchase Price loan amount after the FDIC reimbursement.
At this point, it becomes readily apparent why OneWest Bank has no intention of conducting loan modifications. Any modification means that OneWest would lose out on all this additional profit.
Although I don’t pretend to know everything – it has generally been my experience that in America, banks are organizations that are designed to follow economic laws (translation: their sole intent is to make a profit).
So when wondering why your lender won’t modify your loan, you may be well advised to follow the trail of money – as in what is going to make your lender more money.
And if the FDIC is literally agreeing to pay hard dollars to the lender to foreclose rather than modify?
It seems to me that someone might want to investigate this issue further and then start talking about possible ways that it could be fixed.
We are in the early stages of Foreclosure. We received a letter from the banks Attorney asking for all the paperwork that the bank was sent and recieived in 12/09. The lawyer is also asking for our original loan papers. Do I really want to give him these? Isn’t it their job to produce the note? I just don’t want to give them something I should’nt. Thanks
Only give him copies of whatever originals you have or have him make copies. The more you can give your lawyer, the more it can only help your case.
Thanks for the quick response. BUT the banks lawyer wants our original loan paperwork not ours… should we give their lawyer this info or should HSBC be responsible for that. Would’nt this give them a heads up if we ask them “to produce the note”? Thanks, Sue
I have a mortgage with Citi, I am in the process of a modification.
A loss mitigation representative told me that they cannot guarantee my modification because my exhusband (who is the coborrower and filled out bankruptcy few months ago) does not want to sign the paperwork. I sent to the bank a copy of the letter he gave me stating that he renunced the righs to the house. but they still telling me that it is not enought, he must sign the paperwork. For sure I know he will not.
Is there anythingh I can do to get the modification whitout his signature?
We are in foreclosure and waiting for an answer to our loan modification. In the mean time we received a letter from the courts stating we have to appear for a conference with the Judge and the lender so we can resolve the matter. What does all this mean?
You are most likely in a state like Florida or Nevada that has mandatory mortgage mediation for lenders. This is good news for you and I would attend this with as much documentation as you can to help your cause. Good luck!
My husband had a stroke last Jan. 2009. At the time he was negoiating with our mortgager to catch up on 2 house payments. negoiations stopped. the mortgage company kept calling but would not talk to me, the wife, because I was not on the note. bBy the time I got the nessicary paperwork together, they started foreclosure. I managed to get a chance to try for a loan modification. Before the process was complete my husband passed away. He had a will in which he left everything to me. Now I get a letter from the mortgage company, I do not have sufficiant income , modification denied. Can I do anything to save my home. Desparate Mother
Help, my loan is in modification with Wells Fargo, they called me today and asked aobut a judgement on my credit and how I am taking care of that, how can this even be an issue?? If I had the money to pay the judgement, I would of not have gotten behind on my mortgage, this is just stupid to ask for one thing when it affects another, I’m not sure what to do, my home is set for foreclosure 4-6-10, and I don’t want to file bankruptcy. I’m so stressed about this, I want it over with and I want to keep my home.
Does anybody know about the new law that was passed this year about home equity line of credit? Is it true that they cant come after me anymore?