LAST possible attempt before Auction???

22 Replies

What is someone’s last possible chance to obtain enough money before they lose their home in an auction? If one has no personal family or friends who can help financially, what would you do or what should they do rather? Any other ways financially to borrow money? Also, do you think it’s to late for the bank or bank attorneys to allow a payment plan if a lump sum was put down. $60,000 in debt lump sum of $30,000 would they mortgage company go for that or basically the person has no chance?
Originally posted by @Angie Williams :
What is someone’s last possible chance to obtain enough money before they lose their home in an auction? If one has no personal family or friends who can help financially, what would you do or what should they do rather? Any other ways financially to borrow money?

Also, do you think it’s to late for the bank or bank attorneys to allow a payment plan if a lump sum was put down. $60,000 in debt lump sum of $30,000 would they mortgage company go for that or basically the person has no chance?

 If the homeowner or someone on the loan files for bankruptcy, it temporarily stops the sale. It generally buys a few months. During that time the homeowner can negotiate a repayment or reinstatement of the mortgage if they have the means to do so. It is best to advise the attorney of their plan. 

Also, prior to filing, sometimes a bank will postpone the sale if they believe a "work out" or loan modification can be accomplished. I've been able to get some foreclosures postponed up to the night before the sale. It doesn't happen every time, but it is worth trying. So much depends on the bank, the history of the loan, the borrower, and other factors that it is not possible to guess the outcome until it is tried. 

If the person doing the negotiating with the bank is not on the title or the loan, it could constitute giving legal advice to the homeowner. One must be very careful these days to follow the strict state and federal laws regarding foreclosure avoidance consulting which usually are limited to attorneys, real estate agents, loan officers and licensed foreclosure consultants.

I am not sure your question is about you being foreclosed on or you might be buying.  I have never gone to an auction as a buyer or a victim but I have listened to many possible buyers.  I will assume you are asking as a possible buyer.  Besides your research on what is available is that you should go with a budgeted price on your mind and to not change it no matter how sucked in you are.  Your Due Diligence doing an inspection and evaluation is critical before investing.  I do believe that Mike made some very good points.  Best wishes!

@Mike M. @Michael Lee

Mike M. Thanks great input, that’s what I assumed. The foreclosure is not mine actually nor am I buying one. My first home I ever bought was a foreclosure and thank god turned out to be a success. But I’ve definitely heard nightmare stories.

This situation pertains to my ex boyfriend,his mortgage company switched lenders without notifying him, so he sent in two months of payments to his prior mortgage company. They immediately shut down his account a month and a half later,and refused to take payment from him until he applied for a loan modification and also had to wait for a decision. It’s been two years of redundant applications and a major lack of communication from them besides for applications constantly being sent in the mail asking for same docs over and over. Then no letter or decision was declared, he was just served numerous times to his mother, neighbor and tenants. Now full blown foreclosure. He still has a good 3 maybe 4 months till an auction would even take place. He just wants to pay! Pay! Pay! Lol but they refused for the longest time leaving him in a black hole of debt.

Now it’s been two years and the $3200 he begged them to take as late payment, turned into $63,000. He has court next month with their lawyers to come to a conclusion. But was told by the lawyers he can fax over a proposal. He doesn’t have a lawyer due to the fact many lawyers have turned him away and only want to deal with bankruptcy foreclosures. He wrote up his own proposal and is faxing it to the loan attorneys.

Do you think if he offers a lump sum of a good $30,000 they may accept it as well as 3 years of increased monthly mortgage payments.

Originally posted by @Angie Williams :

Mike M. Michael Lee

Mike M. Thanks great input, that’s what I assumed. The foreclosure is not mine actually nor am I buying one. My first home I ever bought was a foreclosure and thank god turned out to be a success. But I’ve definitely heard nightmare stories.

This situation pertains to my ex boyfriend,his mortgage company switched lenders without notifying him, so he sent in two months of payments to his prior mortgage company. They immediately shut down his account a month and a half later,and refused to take payment from him until he applied for a loan modification and also had to wait for a decision. It’s been two years of redundant applications and a major lack of communication from them besides for applications constantly being sent in the mail asking for same docs over and over. Then no letter or decision was declared, he was just served numerous times to his mother, neighbor and tenants. Now full blown foreclosure. He still has a good 3 maybe 4 months till an auction would even take place. He just wants to pay! Pay! Pay! Lol but they refused for the longest time leaving him in a black hole of debt.

Now it’s been two years and the $3200 he begged them to take as late payment, turned into $63,000. He has court next month with their lawyers to come to a conclusion. But was told by the lawyers he can fax over a proposal. He doesn’t have a lawyer due to the fact many lawyers have turned him away and only want to deal with bankruptcy foreclosures. He wrote up his own proposal and is faxing it to the loan attorneys.

Do you think if he offers a lump sum of a good $30,000 they may accept it as well as 3 years of increased monthly mortgage payments.

 Your comment: "Now it’s been two years and the $3200 he begged them to take as late payment, turned into $63,000." the bank will assume he has been putting the monthly payment into a savings account since he knows he owes the money and eventually will have to pay that if he wants to keep the house. So, the bank will assume he has $63,000 in the bank and can write a check. 

At $63,000 to reinstate on two years (24 months) of missed payments, that is about $2600 per month for a payment. If he offered $30,000 with 36 months to make up the other $33,000 he is adding about $915 per month for a monthly payment of $2,600 + $915 to total about $3,515 per payment. He would have to prove income of about $7,000 per month (50% DTI) or there about. They might take it.

In this scenario I would add all loans and liens together to see if there is any equity. If no equity, I'd cut bait and move on. If there is substantial equity, I would pursue a loan modification. The bank is looking at how to recover their investor's money. (In real talk that is people like you and me who have CD's, Money Markets and retirement plans and other investments at the bank who will lose their money if he defaults). 

If it is an FHA loan (and with a high payment like that it probably exceeds FHA so is not likely to be FHA) he might be able to get a one-time forbearance of the $63,000 as a non-interest 2nd. But from your numbers it looks like a conventional loan so FHA Loan Modification is not available. I add this information for others who might read this in the future.

It depends on the Lawyer's experience and their relationship with the Bank and what the Bank will settle for and what they think the other party will settle for.  He ought to settle at a price that will not create more stress on him.  The Banks down there might be effected by the negative economy and how they were effected may vary.  If they were hurt by that might make a difference depending any losses they might have had and how obligated they are for the ultimate settlement.  Good luck!

@Mike M. It is an FHA loan.

As for him putting the money away monthly they have had drs upon drs notes and documentation about sever health issues that began 2 months prior to him defaulting. He depleted all of his savings due to him not being able to work. But he never disclosed he rents the home,he used his mother as a contributor. He recently told them in the proposal that he is cleared to go back to work.

He’s afraid to suggest renting the home or part of the home because they may never accept his plea.

Thank you so much for breaking down the figures for me. I hate to ask you to help me with this so I could be of assistance to him. But what is your best solution on a repayment plan? Lump sum? How many months? How much more per month.

The home produces $3,400 a month in rental income. Please any help would be so appreciated. I honestly have received the best feed back from you then every attorney that turned him down!

Thank you!!

@Michael Lee Michael very interesting points you bring up. Once he went into foreclosure he constantly called the law office and spoke with their paralegal. It got to the point she was very frustrated with homebridge financial, whim they represent. She kept saying write a proposal and let’s get this review started. She obviously couldn’t say it in words but her demeanor towards this half *** backwards mortgage company came very prominent with her tone of voice and frustration towards the mortgage company.

There really is no way to tell how the bank is doing financially, it’s going to be a crap shot and hope he wins!

@Michael Lee or is there a way to find out about the bank? Any suggestions in terms of a payment plan. He can afford up to about $40,000 down but rather not offer that much and would like to stay around $30-$35,000.

Thanks!!

Also, yes a lot of equity in this home,and the bank defiantly acknowledges it.

I would suggest that the noteholder to offer what makes him the most comfortable.  As far as the Bank goes you could get some information from a Broker that is experienced and is involved with business in the community.  You also might do a Browser search and see what, if anything, it has on the Bank.  Just put its name in their. A seasoned television reporter who has been around for a while who is involved with businesses could maybe provide you with some information or anyone that is business involved in that area.

Originally posted by @Angie Williams :

Mike M. It is an FHA loan.

As for him putting the money away monthly they have had drs upon drs notes and documentation about sever health issues that began 2 months prior to him defaulting. He depleted all of his savings due to him not being able to work. But he never disclosed he rents the home,he used his mother as a contributor. He recently told them in the proposal that he is cleared to go back to work.

He’s afraid to suggest renting the home or part of the home because they may never accept his plea.

Thank you so much for breaking down the figures for me. I hate to ask you to help me with this so I could be of assistance to him. But what is your best solution on a repayment plan? Lump sum? How many months? How much more per month.

The home produces $3,400 a month in rental income. Please any help would be so appreciated. I honestly have received the best feed back from you then every attorney that turned him down!

Thank you!!

 It's unclear but it appears that he may/be or may have been collecting more rent that his mortgage payment and this motivates him. He might be in violation of federal banking law if he was deceptive on his loan application. If he disclosed on the loan app that he was renting a room to be used as income towards the mortgage, then he is probably okay. If he lived in the house for the specified period of time required then rented out the home, he is probably okay. If from day one he bought it as a rental, but never disclosed that he won't be living in the home and got an "owner occupied" loan he is in violation. If he was deceptive, he should sell immediately and repay the loan.

The bank wants to be paid fully each month and on time, that is why they had him go though the loan application process and sign an agreement. If later he was having health issues, his agreement implies that he should have sold the house when he could no longer afford it. If he can't show 30 days of income from an employer, they have no basis for determining a loan modification. They will call the employer to verify.

The attorneys won't touch this because a. He probably can't pay them and they aren't charities b. He probably has very little leverage to win against the bank. c. The motive/action of collecting rent and not paying it directly to the bank to pay the mortgage (or put it into a savings account to show that it hasn't been spent) probably violates his assignment of rents clause with the bank. A judge could/would look at it as bank fraud. Very serious. If you suspect he has done any of these things, your best action is to let him know that given the circumstances you won't be seeing or talking to him until he gets it cleared up. I don't think you want to get caught up in this.

On the other hand, if all of his origination documents were completely honest, he still doesn't have an income and therefore can not qualify for an FHA loan modification. His best bet is to put it on the market immediately while the selling is good.

To be clear: he is Not in this situation because of a change in servicers, supposedly without notice, and he sent two payments to the wrong place.....that would have been easily remedied, the lenders have Laws they must follow.
Your friend is in this situation because he couldn’t/wouldn’t pay the monthly payment after that.....period.

@Mike M. @Wayne Brooks

Hey, thanks again for all the advice it been so helpful you have no idea!

So, he followed all FHA requirements, he was to live in the house for exactly one year which he did and then he was able to rent it out which which he did. He rents it out to family members so he still has all mail and legal documentation being sent to the home and he could say he lives there as well if indeed it comes down to them investigating Tenants. Also, everything‘s been paid in cash and there is really no paper trail to prove it.

Btw, I just wanna say, I don’t agree on what he did and this was not the right way of going about it. I don’t agree with him but at the same time it is family and again there’s no paper trail or evidense he does not live there and he actually does sometimes.

I noticed a few comments on him not being able to afford this home or a repayment plan, but that’s actually farthest from the truth. He just doesn’t want to strap himself short with giving 60+ thousand dollars for the default in Mortgage. He’s comfortable with $30-$40,000 and the rest being worked into monthly payments.

Also, he tried to pay for two years and the mortgage company would refuse payment over and over again until he just waited the past few months out. He was ready and willing to pay full amount back to satisfy his debt.

He would love to sell the house as of yesterday but he’s a bit greedy and doesn’t want to lose a huge profit that he could make if he wasn’t in foreclosure. He’s risking a lose of close to $180,000 profit if he sells without a foreclosure. I’m not to sure how that exactly works when in foreclosure.

Originally posted by @Angie Williams :

Mike M. Wayne Brooks

Hey, thanks again for all the advice it been so helpful you have no idea!

So, he followed all FHA requirements, he was to live in the house for exactly one year which he did and then he was able to rent it out which which he did. He rents it out to family members so he still has all mail and legal documentation being sent to the home and he could say he lives there as well if indeed it comes down to them investigating Tenants. Also, everything‘s been paid in cash and there is really no paper trail to prove it.

Btw, I just wanna say, I don’t agree on what he did and this was not the right way of going about it. I don’t agree with him but at the same time it is family and again there’s no paper trail or evidense he does not live there and he actually does sometimes.

I noticed a few comments on him not being able to afford this home or a repayment plan, but that’s actually farthest from the truth. He just doesn’t want to strap himself short with giving 60+ thousand dollars for the default in Mortgage. He’s comfortable with $30-$40,000 and the rest being worked into monthly payments.

Also, he tried to pay for two years and the mortgage company would refuse payment over and over again until he just waited the past few months out. He was ready and willing to pay full amount back to satisfy his debt.

He would love to sell the house as of yesterday but he’s a bit greedy and doesn’t want to lose a huge profit that he could make if he wasn’t in foreclosure. He’s risking a lose of close to $180,000 profit if he sells without a foreclosure. I’m not to sure how that exactly works when in foreclosure.

 He gets the same amount of money if he sells it while in foreclosure or if he brings it out of foreclosure and then sells it. It is false economy to think he can out trick the bank. The bank is better at the law than he is.

He risks everything if he doesn't put it on the market. If the bank chooses to sell it at foreclosure, they will sell it for what is owed not for full market value. The investor who buys the house at foreclosure will get the equity. There is a whole industry built upon buying houses at foreclosure because guys like him wait too long, then the bank says "no" and the house goes to foreclosure sale. He will get nothing if they take it to foreclosure. 

If he has equity, the time to sell is now. Even if he is in foreclosure he still has that right, up to the foreclosure sale date. It takes about 60 to 90 days to sell a house right now and another 30 days to close. He is running out of time. He will get his equity if he sells it now, he will lose his equity if he continues to assume the bank will work with him. If the bank hasn't shown a willingness to work with him up to this point, he is wrong to think they will as things worsen. (as he gets further behind) and as Forrest Gump says "that is all I have to say about that". ;-)

He is your ex-boyfriend. It sounds like he is having financial problems and he is bringing you and his family into his problems.  He is not paying his bills, even though he has money. He is coming up with BS excuses like claiming he will get less money if his house is in foreclosure.  

There are a ton of red flags telling you to stay away from this whole situation. Has he asked you for money yet?

I don't buy the story that he sent the first two payments to the wrong place and they wouldn't accept the last two years of payments as a result.  That is not how things work.  If this is the case, he should get an attorney to look at the situation.

At the end of the day, he clearly has not paid for a long time and is lucky he still has the house at this point after being past due for 2 years.  There must be things going on to delay the foreclosure as this is a very long time.    

He needs to take some responsibility as he clearly has not paid his mortgage for 2 years even though he has been collecting rents from the house.  I don't think there is a chance the current lender will just allow him to continue paying his current mortgage at this point.  They need to do something about the amount past due and this will not resolve the problem.  

My advice would be to sell the place and be done with it or apply for a loan from another lender to save the house.  Good luck with that if he hasn't paid the mortgage for the last 2 years though...

@James W. I understand it sounds like a fictitious reason for the mortgage company to stop payments. But, that’s exactly what happened. He tried maybe 3 or 4 lawyers all refusing to take on his case. They said it’s very rare for a mediator or a judge to favor the home owner rather then the bank. Basically telling him to pay it or lose it.

Yes two years sounds long but I know people who have been in foreclosure longer then that, I met a couple in foreclosure for close to 5 years and counting. NY is a judicial foreclosure state which makes the process often takes a lot longer than a nonjudicial state.

Due to..Backlogged courts, judges’ schedules, hearings, and required paperwork all contribute to a prolonged process. Courts are simply unable to process a large volume of foreclosures in an expedited manner. NYS is the the third in the country with the longest foreclosure processing.

Again, he’s not broke, he has never asked me for a dollar, he does very well for himself and his family lives very comfortable. He didn’t default due to financial reasons, it was a discrepancy that unfortunately spiraled out of his control. He should have paid it months even a year ago and he wouldn’t be burrows in mortgage hell. He did not want to pay the full amount, which I understand. But with all the feedback and great advice I’m going to advice him to sell quick and get out. He has time, but that doesn’t mean his debt will stop rising.

@Jerry Murphy No not the case. He has never asked to borrow money from anyone, hence his mortgage debt of $60,000. He pays his bills, especially now that he is healthy enough to do so. It’s totally irrelevant to the advice I was seeking but he was diagnosed with testicular cancer about a month before he defaulted and under went a lot in the past 2 years.

Maybe now knowing his medical issues, the comments on him and his personal life style will stop. Him not paying his bills which is an overly obnoxious comment to even assume or as if he’s trying to scheme his way to get money from me and his family, which btw his family was never even brought up in any comment thus far. Those were exceptionally irrelevant comments seeing all I was asking for was some advice seeing this is the foreclosure forum.

All I asked for was for some clarity for his situation, which I got a great amount of thanks to those who stayed impartial to his personal well being. The comments on factual circumstances that could render this major issue rather then people assuming anything about him on a personal level is what I needed to read not assumptions from anyone who does not know him.

The equity position is only relevant to the borrower... bank just wants what is due under the Note.  And they'll get it.

There are only 2 viable options here: sell the property or reinstate the loan. 

Sorry if I was too suspicious. I've seen a lot of people get conned or sucked into other people's scams.  This has all the red flags. The main one is that the story makes no sense. He owes $60,000 and is willing to pay $35,000 or $40,000 maybe $50,000 but the mortgage holder won't take it. But then you also wrote that he depleted all of his savings due to his illnesses. He has family living there but still gets his mail there and is willing to lie to say he lives there. And there is no paper trail.  No lawyer will help him - as a lawyer I find that almost impossible to believe. Most of my fellow lawyers are desperate for clients and will help anyone who can pay.  

But you know him and we don't. So the basic advice is that if he has legal problems he should find a lawyer.  If he owes $63,000 he should pay $63,000 or renegotiate his debt. There are lots of books on how to renegotiate debt. I like Nolo's book on Solving Your Money Trouble and their book on Credit Repair. 

@Jerry Murphy incorrect again. He depleted a ton of his money with his medical expenses and through the months he was to weak to work. I never said he didn’t start to make money again after chemo.

Yes he wants to propose a payment plan, so NO idk if they will approve it. That’s what my topic was about. Never said they didn’t accept his payment proposal because he has yet to propose anything. I’m not sure where you live and practice law but every state is different attorneys don’t want to take on his case because they know the outcome. Plus, it’s a complex situation he’s in. The most he wants to lump sum is $35,000, if he paid $50,000 he might as well pay $60,000.

If the red flags are waving to much for you then stop replying and assuming he lies and is trying to steal money. You don’t even know our ties to each other and your implying he’s out to rob people. He just recovered from having to go through cancer at 34 years old, it’s sad how negative and paranoid you are with no sympathy for what he’s been through the past two years.

You turned this message board into your own circus of fictitious laws in NYS.

My story told is the long of the short. I clearly can’t and won’t go into more personal issues of his life. I told you a quick version I’m not here to talk about him, I’m here talk ask for advice on a foreclosure. That’s all and I’m not discussing your red flags anymore or his personal life. Thank you but your bogus legal advice is no longer needed please respect the fact your input is insulting rather then advising.

Ok. Sorry,

The books I suggested are good and can help with renegotiating debt.

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