Ch.7 and Foreclosure??? (long post)

[roozterdvx]

Recieved a summons last Friday for foreclosure on my mortgage, (Wells Fargo). It says we have 20 days to respond in writing to the summons.

Wife and I are including the house in our Ch7 bk... should we respond to the summons and if so how? Do I type an explaination of our situation or ???

Last time anyone from Wells Fargo called up, I told them that we were filing ch7 and including the house. I'm thinking this was a mistake. Previously, I had been trying to do a loan mod with them for a couple of months and they were completely unwilling to do anything. After telling them about the bk, they sent me a loan mod offer in writing within 5 days. The loan mod just wouldn't work for us though...increase in principle amount, rate lower by 1 point, and term extended to 40 years from date of signing the mod.
Our mortgage payment would drop by about $400/month but we would lose $12,000 in exemptions by not including the house and then be strapped to a house for 40yrs and may never be able to sell it because of what we owe.

Also, I thought that a summons had to be delivered to the parties involved. Whoever dropped of the summons, rang the door bell and handed 2 summons, (one for me and one for my wife), to our daughter.

We have done the pre-filing counseling, since paying the attny a retainer, and are getting all our paperwork ready to turn over to him. We are just waiting for our tax refund which gives us the rest of the money we need for fees. Should hopefully have the check within 2 weeks or so and we can give him everything. Once he sorts through it all, makes sure we're not missing anything, he can file the ch7.

I feel like since telling them about the bk, they're trying to speed up the process.

[StartingOver08]

Dump Wells Fargo pronto!

You are doing the right thing by surrendering the house. Wells Fargo is one of the most uncooperative lenders around.

As to the modification, that sounds typical for them. Notice how the principal INCREASES and although the rate drops a point (big deal ) the term is extended for another 10 years! If you are upside down in your home - that is a receipe for disaster! You are right, give it back in BK.

BTW, it takes them a long, looonnnnggg time to foreclose. Stay there as long as you can to build up your savings so you can move to something you can comfortably afford.

off soap box now...as you can tell, WF is NOT my favorite lender!

[freshstartfl]

Well since you're filing BK, no real need to respond to the summons. Let them get a default judgment against you for not responding -- you won't be responsible for any deficiency anyhow.

[roozterdvx]

Believe me, we are waaaaaay upside down in our house.
We live in Lehigh Acres and my wife works as a real estate agent's assistant. The only reason she's still working is due to all the foreclosed properties in the area. She is constantly bringing home stuff for me to see. She showed me a house that is identical to ours on a bigger lot for $87,900....a little over 1/3 what we owe on ours.
This weekend she took me to see a foreclosed house that they just listed for a lender...going on the market for $155,000 and she says that her agent expects it to go at around $135-140,000 in the current market, and maybe even less depending on how long is sits.

We plan on staying in our house until they tell us that we have to leave. During that time, we'll be trying to save every last penny we can.

[roozterdvx]

Well since you're filing BK, no real need to respond to the summons. Let them get a default judgment against you for not responding -- you won't be responsible for any deficiency anyhow.

I'm just worried that ignoring the summons might speed the process up somehow.

If they get a default judgement without my response, will there be anything to stop or delay them. What I mean is, if they get the foreclosure process started before we file our ch7, can they continue with the foreclosure during our bk process?

[StartingOver08]

There will be the automatic stay put on during your BK. But when you are discharged the bank can pick up right where they left off.

If you feel like you want to delay the bank a little bit more, you can respond to the summons- but if you are filing right away (within the 20 days) then don't worry about it.

I know the area you are talking about! I am on the East coast of FL (Wellington) and we are loaded with bank owned properties too - and for the first time in forever you can buy a detached single family house in Palm Beach County for under $150k! LOL.

[brokenbuthealed]

I'd respond just to delay the process a little longer. You can file a motion to request additional time to prepare an answer, then closer to the end of that time period, file your answer. It could give you at least an extra month or two to stay rent free. I plan on doing the same with my home and stacking as much money as possible in the meantime.

[roozterdvx]

What do I send for a response and in what form?
Addressed to who?

[freshstartfl]

You should send it to the Plaintiff's attorney as well as the Clerk of Court. Put cc: Plaintiff's Attorney's Name and Clerk of Court on there so that both know the other has been notified of your answer. Ex-parte communication with the Judge is a no-no, and on the other hand, if you only send it to the Plaintiff's attorney, they'll have to do a Notice of Filing on it for you and send it to the Clerk (if they even bother doing it -- they could very well ignore the fact that you answered if it's not on file with the Clerk).

[freshstartfl]

I see answers at work that range from:

-- a count-by-count admittance or denial, properly formatted to appease the court

to

-- "f*ck off" scrawled across the summons in a big black marker and mailed back to us.


It all counts as an answer. Although I wouldn't recommend the latter. A brief answer formatted as a letter should suffice just fine for your purposes.

[TEW]

If you are letting the house go don't do anything. If you want to speed up the process you can sign a consent to judgment.
Wells Fargo hires loser lawyers. it took them 4 try's to get relief from stay that was the BK lawyer for the foreclosure lawyer wrong everything county sheriffs office and you name it they paid taxes that were already paid.

[rockyroad]

You are doing the right thing by surrendering the house. Wells Fargo is one of the most uncooperative lenders around.

As to the modification, that sounds typical for them. Notice how the principal INCREASES and although the rate drops a point (big deal ) the term is extended for another 10 years! If you are upside down in your home - that is a receipe for disaster! You are right, give it back in BK.

BTW, it takes them a long, looonnnnggg time to foreclose. Stay there as long as you can to build up your savings so you can move to something you can comfortably afford.

off soap box now...as you can tell, WF is NOT my favorite lender!

Oh my, is this what these lenders are resorting to regarding modifications for those who are in trouble???
So many will enter into these agreements adding principal to an already upside down loan on a home they will not be able to sell anytime in the near future for what they owe on the loan!
Good grief...we are pressing for loan modifications, but how in the world is this formula actually helping anyone???

[TEW]

Loan modification? That means they take and move the payments you missed to the back of the loan with interest and penalties. I haven’t seen anyone come on the forum that got any type of deal from their mortgage company

[StartingOver08]

The lenders prefer to foreclose.

Despite what the PR depts of these lenders are saying - they WANT to foreclose. They only get paid the mortgage insurance IF the property is foreclosed. All loans have mortgage insurance if they were orginated 2003 or later...even if you had an LTV of 80% or less. The lender put LENDER PAID blanket mtg ins on the loans when they sold the loans ....So, naturally, they do NOT want to do modifications. With the foreclosure they get the pay off from the MI company (anywhere from 19% to 35% of the original mortgage) plus the asset to sell.

The only reason the banks/lenders are offering the modifications is as an appeasement. Most of the modifications are like the one the OP described - increasing the mortgage balance and stretching out the payment term. That is not a solution to the problem, it is just a ticking time bomb.