UGH...90 days late on mortgage -- foreclosure process has begun - questions

[goblue]

we plan to get current on the loan by March and we are filing Chapter 7 in late March. (We are hoping to pay September and hopefully october this month - will that catch me up enough that they stop the process?)

Do I need to worry about them getting anywhere in the foreclosure process before then? He said I could call back with income and expenses and they could review our situation for a possible loan mod or repayment plan. Do I need to do this or will me catching up by March keep us out of trouble. We may decide to give our house up, but for now, we are planning to keep it.

Also, is there any issue with completing a loan modification before we file in March?

Thanks....please tell me there is a light at the end of the tunnel.

[StartingOver08]

Make sure they actually apply the payments you are sending in - get their agreement to apply them to Sept 2009 and Oct 2009.

Sometimes they tell you to send in the payments and they put them in a "suspense account" and they do not apply the payments to your past due balance. They do this so they can continue the foreclosure + rack up lots of fees. Get their promises in writing or at least recorded for your protection.

[Ablazed]

When you say the foreclosure process has begun could you please provide a little more info? Did you already receive a notice of default or a letter of intent to accelerate?

These are letters where you have until a specified date to cure the mortgage by paying all delinquent fees. If this is the case, and there is any way possible, I would strongly recommend you bring everything current given that you are planning on filing a Chapter 7 and want to keep the house.

Hopefully they have not filed a complaint and scheduled a sale date. If you are beyond this point in the process, your situation becomes a lot more complicated. You will start to rack up some serious legal fees and other BS costs. You are also at risk because they may not even apply payments made after this date to actually cure the loan.

It is also highly unlikely that you could get a permanent loan mod in place by March 2010.

Regards,
8^)

[goblue]

Thanks. I called them yesterday to give them an update of when we plan to pay our past due amounts. He told me that as of 12-1, the foreclosure process was initiated but no sale date had been set.

I have a call into my lawyer to see if we could pass the means test if we plan to surrender the house and if so, we could file in January. The problem is I don't think they usually really analyze your situation until you paid their fees in full, but we're not in a position to do that. Is that the norm or should i look for a new attorney? We've paid $400 (retainer) and still owe $1900 and this attorney was highly recommended.

Our situation has changed so much from when we first decided to file BK that I'm more confused than ever. Initially we were filing in September and keeping the house. Now, we are pushing the file date way back (possibly March) and are considering dumping the house as 1) we are backwards on it and 2) we don't *love* it either.

[Lana]

If the lender is Wells, Chase or BofA - dont think they will foreclose anytime soon. I have clients who have not paid in years and nothing happens. Those banks are SLOW. They file the paperwork but never follow through. If you're planning on leaving, you'll probably be able to stay for free for a long time, so dont worry much about it.

[goblue]

If the lender is Wells, Chase or BofA - dont think they will foreclose anytime soon. I have clients who have not paid in years and nothing happens. Those banks are SLOW. They file the paperwork but never follow through. If you're planning on leaving, you'll probably be able to stay for free for a long time, so dont worry much about it.

Keeping my fingers crossed. Our first is through ASC which I believe is Wells Fargo. Our second is through EMC which is now Chase. I received a letter from an attorney today representing ASC stating that they will begin the foreclosure process...yada yada yada..

I have a meeting with the attorney next Wednesday to discuss our options. At this point, we are hoping we can surrender and file in January, rather that getting current and filing in March knowing our ultimate intention is to let the house go and get into a rental property.

[StartingOver08]

I have Wells on a rental property and EMC on my primary residence and so far they have been working on the foreclosure since Aug 2008 (LP filed). You have plenty of time with these servicers if you are in a judicial foreclosure state, unless of course, your property has actual equity. LOL...

[goblue]

I'm in Illinois -- I think it's a judicial foreclosure state - how can I confirm?

As far as equity, our house is probably worth about $240K right now. We owe $265K between the two mortgages. $212K on the first (ASC/Wells Fargo) and $54K on the second (EMC/Chase).

Do you think ASC will speed things up since they can recover most/all of what we owe them?

Thanks again for all of your help. I'm just hopeful that we have enough time to be in control of our destiny regarding the house (whether it's surrender now or set up a repayment plan).

[StartingOver08]

I don't think you have to worry about ASC speeding up the F/C process as you really don't have any equity, but the best person to speak with is your attorney since he knows how your specific district works.

Here is an article on IL foreclosure (a judicial state):

Illinois Foreclosure Process

A foreclosure in Illinois is judicial, meaning that it is administered through the courts. A judgment of foreclosure can be obtained in as little as 90 days assuming service on all defendants at the first issuance of summons and assuming no opposition from any defendant. Due to the 90-day reinstatement period from the date of service, a judgment cannot be entered prior to that time. Due to the statutory redemption periods, a sale may not occur for anywhere from one to three months after the judgment of foreclosure is entered. The court may also extend the redemption period in certain cases.

Pre-foreclosure Process
Before a lender forecloses a borrower’s Note and Mortgage, a title search should be conducted. Any liens that appear senior to the lender’s lien should be addressed prior to foreclosure, or the purchaser at the sale will take the property subject to the senior lien. All junior lien holders must be named as defendants in the lender’s foreclosure suit to ensure title is free and clear of liens at the time of the foreclosure sale.

Court Process
Upon a borrower’s default, a lender can file a Complaint to Foreclose Mortgage with the court. The Complaint is then served on the borrower and any other named defendants. If a defendant cannot be found, Illinois law allows for service by publication. Once service is obtained, a defendant has 30 days to file an Answer with the court. If the defendants fail to file an Answer, the court will enter an order of default if requested. If the borrower or other lien holder files an Answer contesting the foreclosure, parties can litigate the matter and possibly go to trial.

Once judgment is entered in favor of the lender, the borrower has a statutory 90-day redemption period before a sale can take place. The court can shorten this to a 30-day redemption period, if the property is abandoned. The court also has the authority to extend the redemption period.

Sheriff’s Sale
The sale date must be after the expiration of the applicable redemption period. A Notice of Sheriff's Sale is published in a local newspaper in the county where the property is located once a week for three weeks. Not less than seven days after the final notice of sale is published, a Sheriff’s Sale is held. The lender provides the opening bid which is usually the full amount owed to the lender by the borrower. The person with the highest bid at the sale receives a Certificate of Purchase.

Following the sale, the Sheriff or selling officer must make a Report of Sale within 10 days. A Motion to Confirm Sale must then be filed and the sale confirmed by the court. Following confirmation, the Sheriff’s Deed is issued.

Provided by Martin, Leigh, Laws & Fritzlen, P.C.

http://www.mllfpc.com/

[seth]

I was told by my lawyer that I have 7 months MINIMUM until I get a notice to vacate the property by the sheriff. My lawyer even told me the process is so clogged up and slow in ILL, it can take up a whole year. I am not risking it tho i am out by the 5th month (from the notice of default).

Good Luck,

Seth -not a lawyer or a smartguy