2

1/28/2008 10:59:48 AM

Sever.

1/28/2008 11:05:41 AM

so even given all this new information, is refinancing really impossible.

b/c that just really sucks

1/28/2008 11:29:58 AM

Available credit is pretty much dried up. There are only a few banks in NC that will issue a first time mortgage anymore at a decent rate.

I think this foreclosure is happening very fast. I did a few bank side foreclosures and it took almost a year of nonpayment to get a hearing.

I sent a PM, she just needs to call everyone in the State Government that she can possibly come up with. I would also call the news.

Get a lawyer too.

[Edited on January 28, 2008 at 11:39 AM. Reason : k]

1/28/2008 11:37:28 AM

Update: the bank says the period for settlement has passed. They will be issuing a notice of eviction on Feb. 9. Four lawyers have been contacted and all said it was too late to do anything legally, not even bankruptcy could avoid eviction. Regretfully, she had a chance to escape eviction earlier today and did not take it. The agents at the bank said she could settle for $4300, regretfully they refused to give her a fixed value, suggesting she should send in a few extra hundred dollars on top of that to cover the unforseen, which scared her. She evidently thought that they might take the $4300, put it against what she owes, and then continue with the foreclosure; thus making her not just lose her house but all the cash her family could raise.

Is there any chance in hell she is right? They returned her other payments because accepting them would be legally binding, why wouldn't this one be similarly binding?

Also, is there any set of circumstances where the bank gets to keep the surplus after the house sells and everything is paid off (balance, interest, penalties, fees, etc)? She still seems to believe they want her house because selling it will make them richer than settling would. She seemed so confident I just stopped arguing, but such sounds rediculous!

1/29/2008 2:09:34 AM

If they were willing to put the settlement terms in writing, she missed out. If they weren't, they were trying to pump her for cash.

1/29/2008 2:15:55 AM

Really? So she was right? Well, they certainly were not going to put it in righting, they just wanted a check. So, what, can they cash her check and still foreclose? If so, why did they return all her previous checks?

[Edited on January 29, 2008 at 9:32 AM. Reason : .,.]

1/29/2008 9:31:44 AM

This is a really odd situation.

Banks lose money on foreclosures, especially in this housing environment. I wonder how it got to this point in the first place.

1/29/2008 9:43:22 AM

Seems so strange to me.

I am pretty sure the bank is entitled to keep what they are owed on the Mortgage. Any left over equity belongs to her. They may be owed $20k (made up figure on the Mortgage), but they are better off to have her continue making payments than to foreclosure and try to resale.

She really should pull out her Deed of Trust and reread the terms and conditions. Something is not right in this situation.

Has there been a foreclosure hearing? They really cannot do anything unless there is a hearing first.

1/29/2008 9:43:39 AM

Unless it is a really cheap house, 30k is not much to have left on it.

I mean seriously, what will the bank gain by doing this? Let's use variables

C - cost of house when girl bought it
L - amount left on loan, which was said to be 30k
N - price it will sell for at foreclosure

I think it's accepted that N < C considerably. The bank is only entitled to keep only L out of the N that it sells for (which I hope would be a small fraction), plus whatever they can legally milk her for. Plus, when the fuck is it even going to sell?

It really seems like everyone will be getting screwed by this.

1/29/2008 10:28:39 AM

Could always have a relative buy the now-foreclosed house and rent it back to her.

1/29/2008 11:22:55 AM

Update:
After writing letters to various TV stations, a TV reporter contacted the family and said she wanted to do a story on the case. Within 24 hours of the reporter contacting the bank for information the bank decided it would settle, asking for nothing more than back payments; no interest, no fines, no lawyer fees. Absolutely amazing.

2/3/2008 10:59:36 AM

i thought it was the space aliens

2/3/2008 11:08:37 AM

ahahaha

plz post links to stories

2/3/2008 11:08:39 AM

Quote :

"Tell her to call the mayor and congressman, the govt is getting involved in these things and they can help stop the forclosure and force countrywide to redo her loan the government is bailing out alot of these companies and they're not supposed to screw over their customers"

the govt isn't doing shit, just trying to look good. they won't help her.

2/3/2008 11:59:26 AM

which station did she call?

2/5/2008 7:15:08 AM

^^

http://wral.com/news/local/story/2394073/

http://www.995hope.org/

It is in EVERYONES interest to avoid a huge rash of foreclosures, we are having a huge rash of them anyway...but they are trying to mitigate the problem by negotiating with the lenders for better terms and repayment plans that keep owners out of foreclosure.

A bank/lender loses 50 thousand are more on the average foreclosure. The neighborhoods property values get depressed if there are too many of them. And it contributes to the glut of houses for sale. It is supposed to get worse before it gets better.

2/5/2008 1:08:58 PM

okay so heres the deal. if all that was owed on the house is 30,000 and its worth 100,000.

why isnt she just selling the damn house?


if it was worth 100k or more i would buy that shit for 40k cash today and i mean that.


that nobody told this person to sell the house and lose the equity to save their credit makes this story not believable.

2/5/2008 1:17:43 PM

well, i'd say she made out pretty well getting the late payment forgiven and repaying the missed ones.

Now she has 30k left to pay before owning a 100k house, instead of ^, having 40k - 30k = 10k cash and no home to her name.

2/5/2008 2:24:47 PM

^

2/5/2008 5:41:34 PM

i stopped reading after page one so i apologize if i'm repeating something somebody else already said. I am a real estate agent on only deal in foreclosures. She has been waste deep before or this could not have happened. The average foreclosure process takes over 9 months so I doubt they just up and decided to pass this to a collector. That foreclosure website you entered is not accurate in the least bit and i would not use it in trying to find foreclosures. Contrary to popular believe, if a house only has 30k left on the mortgage the bank will sell the house for the market value. Any thing over the amount claimed by the bank is owed to the owner. The average cost to foreclose on a house regardless of how much is left on the mortgage is upwards of 70,000. She is only telling the partial truth on how this came to be. Any questions you can pm me.

2/5/2008 5:45:07 PM

http://wral.com/news/state/story/2479826/

Is this her?

2/26/2008 12:15:18 AM

^?

2/26/2008 2:50:36 PM

if so loneshark keeps some rather old friends

2/27/2008 4:12:29 AM

Ocwen Loan Servicing sounds like someone I would rather give first born to then do business with...

LoneSnark glad your friend got out of this, provide us with some updates...

2/27/2008 5:59:05 AM

yeah, i used to own stock in Ocwen. In keeping up with the business I learned just how shady they were, and after reading one particularly infuriating article, I sold my stock.

A week later they dropped almost 20% in one day, and are down about 70% since. Maybe there's something to be said for socially conscious investing.

2/27/2008 6:57:35 AM

If you're a company, don't be evil. You will have no long term potential.

2/27/2008 3:24:29 PM

flagstar bank tried to screw me over. i have auto draft set up and it's been fine for months. my february payment wasn't deducted, so i call them and they say i haven't paid. clearly it was their error, but they refuse to negotiate on the late fee and processing fees. i couldn't get anyone to help me, so i said screw it.

i called them and said, this friday you will get your payment, along with the other $195,000 or so and i won't be doing business with flagstar anymore. they tried to make it right then, but i lowered my rate by almost 2 full points and pay less than $400 at closing with my refi.

you have to keep a watchful eye on these things because companies will stick it to you (especially ashley furniture, flagstar, countrywide, etc.).

[Edited on February 27, 2008 at 9:48 PM. Reason : /]

2/27/2008 9:47:36 PM

I'm really curious as to how this is going to play out in the market - because there are all of these people with I/O arms that when they reset - people will go into foreclosure. But because of the loans given out at 100% financing, that's where the real problem will be - because those programs are gone and suddenly to re-fi you can only mortgage 95% of the current value of the home (in most cases). Which is a real bummer for those whose homes have depreciated. People in those types of loans don't have $Texas to bring to closing, so they can't re-fi.

What do they do? Is it really in the best interest of the loaner to foreclose? Do they get some great benefit from extending the arms and freezing the rates? I see this situation come up more and more, especially in higher middle class neighborhoods - what will people do?

2/27/2008 10:00:23 PM

Banks have balance sheets that they like to balance monthly/quarterly/whatever.

If they aren't getting paid, they figure that cutting their losses is better than fucking around with some owner who is having trouble paying. There are also tax incentives for doing write downs.

The other thing is that banks can't time the market. When property prices go up, foreclosure isn't that bad because the underlying asset is increasing in value. So, in good times, they have loose lending standards because the downside is low. By the time it is clear that the economy is fucked and people won't be able to pay, the foreclosures have already happened.

Interest rates are now going up because banks have changed policy and lending standards in response to the different economic environment, but the damage is done.

Actually, homeowners who got in over their heads would do better to cut their losses quickly, too. If the interest rate is getting to a point where you can't afford it, sell your house and minimize your losses. People who get in over their heads are stupid anyway, so they probably don't think about this.

[Edited on February 27, 2008 at 10:12 PM. Reason : .]

2/27/2008 10:07:36 PM

All good points, but the market will keep people who should sell their homes from being able to sell. That and a large majority can pay their mortgages now - pay on time and are great customers - but just can't handle the increase on the arm when it goes. Those are the people I'm surprised aren't being worked with. Keep a good customer a good customer. These homes aren't going up in value, that's for sure.

[Edited on March 2, 2008 at 3:53 PM. Reason : ,]

3/2/2008 3:53:26 PM

No offense, but if people can afford their mortgage now but can't afford their mortgage when ARM goes up, that means they can't afford the house period. They aren't "great" customers -- they are marginal ones. They shouldn't have gotten the ARM loan in the first place. If they want to sell the house they can't afford and buy a smaller one, they would be able to get finance for that.

Frankly, the sooner these people are pushed out of their houses, the sooner the market corrects itself and the sooner we can get out of the doldrums. This will be a tough lesson in personal finance for these people, but it's a lesson they need.

Another thing to consider is that having a non-performing loan on the balance sheet reduces the amount of money the bank can loan to someone who can actually make them money. So, you have another opportunity cost for the bank. The math for keeping around bad loans just doesn't add up for the bank.

[Edited on March 2, 2008 at 5:18 PM. Reason : .]

3/2/2008 5:13:20 PM

Average foreclosure costs the bank ~$50,000.

Anyone with less equity in their home than that is gonna get some special treatment from the bank unless the bank is stupid. If they take the house back they will lose their ass trying to re-sell it right now.

3/3/2008 12:44:06 AM

Quote :

"flagstar bank tried to screw me over. i have auto draft set up and it's been fine for months. my february payment wasn't deducted, so i call them and they say i haven't paid. clearly it was their error, but they refuse to negotiate on the late fee and processing fees. i couldn't get anyone to help me, so i said screw it. i called them and said, this friday you will get your payment, along with the other $195,000 or so and i won't be doing business with flagstar anymore. they tried to make it right then, but i lowered my rate by almost 2 full points and pay less than $400 at closing with my refi."

Nice. I'm happy to hear this. I would really like to see companies have to take more responsibility for their practices. There are a number of things that I simply won't get (like cable) because I don't trust any company in the context of the relevant contract. Yeah, that's silly, but the corporate world needs to start feeling the hurt for screwing over their customers.

3/3/2008 10:03:27 AM

This is Financial Pre-School to some of you, but if she had a 401(k), the odds are almost 100% that she could've tapped it to make up the difference.

The IRS considers a foreclosure circumstance a "hardship" so long as you've actually received a foreclosure notice (not just "behind on payments" or "past due"), and provides the option of tapping your 401(k) to make up the amount owed.

Still taxed and penalized, but sometimes you've got to do what you've got to do.

Not sure the OP's friend would be financially responsible enough to have a 401(k), but many of you may know people who are and still end up in this situation in the future...

3/3/2008 1:16:45 PM

i didn't real all of this thread but by law a lender can foreclose on a house if even just one payment wasn't made on time. i just finished the nc real estate class and was taught that. also, i think i heard countrywide is having money issues and they may be bought out by bank of america.

3/3/2008 5:49:32 PM

Quote :

"I see this situation come up more and more, especially in higher middle class neighborhoods - what will people do?"

hopefully they'll have realized how stupid they were to try and live outside their means, get foreclosed on and take the hit for 7 years.

3/3/2008 8:48:30 PM

Isn't it a lot more than just a hit for 7 years though? I don't really understand the process - but they foreclose and you lose the house, but you're still responsible for the amount of the loan right? Subtract out what the home auctions for and you still owe that amount?

How do they ever get that? Dock your pay? So then you're homeless and working but not bringing any $$ "home"?

Someone explain this yo.

3/3/2008 9:37:45 PM

yea from what i've heard on the radio it's up to 10 years your credit is screwed and you still have to pay the money back

[Edited on March 3, 2008 at 9:42 PM. Reason : maybe just principle no interest or somethin.. i dunno]

3/3/2008 9:41:44 PM

The laws vary between different states, but in general, the house itself is the only collateral that a lender can go after. In some states, they can go after your car, too.

This is why some borrowers have simply mailed their keys in to their lender and simply walked away. Coupling resetting ARMs with depreciation of the house itself, and the better financial decision for the borrower is to bounce out of there.

http://www.npr.org/templates/story/story.php?storyId=18958049

3/3/2008 9:45:28 PM

Quote :

"Your lender WILL NOT be able to call you in attempt to collect! Your lender WILL NOT be able to collect any deficiency or loss they may receive by you walking away! You WILL be able to stay in your home for up to 8 months or more without having to pay anything to your lender! You CAN have the foreclosure REMOVED from your credit!"

how in the bloody fuck are they pulling off the last one. i've got a few friends who would love to walk away from their place that they're seriously upside down in

[Edited on March 3, 2008 at 10:07 PM. Reason : but have been just trying to save their credit..]

3/3/2008 10:07:12 PM

lets face it, you can't save your credit. take the hit and walk away.

[Edited on March 3, 2008 at 10:29 PM. Reason : just go ahead and have the bank foreclose.]

3/3/2008 10:28:27 PM

well the one i'm really talking about has his place for sell at a stupid low price. he's hoping to just get out and borrow whatever he has to to pay back the difference...

but yea, if it doesnt sell soon, credit=fucked and all the money he's barely came up with =wasted

3/3/2008 10:30:28 PM

Quote :

"well the one i'm really talking about has his place for sell at a stupid low price."

that's how i bought my house and the ones before it. whoever i purchased from got fucked, but i made out like a bandit. at least the people who sold this house have a far smaller debt load than before. it makes picking up the pieces easier.

it doesn't help if your spending habits are shitty afterwards though. it makes me sad to see people who make poor choices get whats eventually coming to them. buying a 300k house, two new harley's, one car, new baby and current toddler, one income. ARM. disaster.

3/3/2008 10:40:34 PM

Wanna buy another one? hehe

3/3/2008 10:44:34 PM

where is it?

3/4/2008 7:37:09 AM

Towards the coast...

3/4/2008 9:26:34 AM