Walking away,now what?

[broken64]

Hey all, I am here for some advice on our new chapter. We were discharged and closed on Chapter 7 no asset last year. Have a totally under water home that we have lived in for 20+ years with Countrywide now BOA. They won't work with us on our mortgage, we pay $1270.00 a month. We got notice this week our mortgage is going up $50.00 as of April 1st because of increase of taxes. We have been a month behind but nothing more, trying to hold on but now with this increase there is no way we will be able to keep it at only 1 month behind, add the late fees every month we are dying here! We did not reaffirm with them, so can we just stop paying altogether and walk away? Ugh, this kills us but my husband did find work but is making wages he made 10 years ago and I am self employed and I am barely staying afloat there, not pulling any checks just keeping the doors open, so I will be out looking for work also. Any help will be greatly appreciated. This forum has been my guidance since day one of BK process, so I am coming back to those I trust most on these issues. Thank you for your time. Broken

[dspii]

Hang tough...things will get better. If your case is discharged, you can walk away from your home and owe nothing. Of course they will file for foreclosure, but depending on where you live could take many months and allow you to save. I have heard that some companies will work with you if you are current, you may want to try that route. But if your underwater by a substantial amount, walking away may be your best option.

[Dst1]

My perspective is that BK is supposed to give you a new start. It doesn't sound like you got a new start; the same pressure and anxiety is still there.

[mbmullen]

Now you're into my territory. Not an attorney - a Realtor dealing with loss mitigation departments all day long.

Bank of America is not taking your attempts to modify your loan seriously because you have managed to stay only a month behind. They think you can afford the house. It has been my experience that once a loan goes 60 days late, the lender can't work fast enough to get in touch with you about your options to keep your home.

I would urge you to contact NACA.org. They are a non-profit group that can help you negotiate a loan modification with your lender. You do have to be able to show that you have an income in order to modify and you will have to provide them with a ton of information and paperwork but it can be done.

Good luck to you! I hope this helps.

[LSUTiger32]

Is it an income problem? Like DST1 said, you should be in much better shape post discharge. Glad you didn't reaffirm....if it is just not going to fit into your budget go rent a decent place for half the money and get your finances straight. Then in 2 or 3 years you can work on being a homeowner again.

By the way, mbmullen makes a wonderful point. Get three months behind (who cares, your credit isn't an issue anyway) and then see what they are willing to do. Stockpile that money though so that if things don't work out you have a nice deposit and several months rent saved.

Good luck!

[broken64]

Thanks all, great advice. Yes it is an income problem, my husband is working full time, but he is making wages he made 10 years ago. We live in Michigan and the house across the street is bank owned and they are selling it for $25,000 and there is multiple homes down the street that are also bank owned. As I said I am self employed and the business is tanking also so no money coming in there. We did not reaffirm with the BK, as I said in my previous post, and I have tried to get somewhere with BOA and they won't help, basically they tell me to cut down on gas cost, hard to do when you have to drive to work everyday, cut down on groceries, only spend $70 to $80 a week now for a family of 4 and believe me that is a pain trying to feed all of us for a whole week, they also told me to disconnect the cell phones and that would free up about $200 a month total. I told them that if I am going to do that then I might as well disconnect my cable to (we only have basic) and sit here and stare at the 4 walls until I fall asleep. To me that is not living. I love my home like I said previously we have been here for 20+ years, I just needed some direction as to what to do next. Should I tell them I am not paying anymore or just not talk to them. They call my cell about 15 times a day, I just don't answer anymore

[broken64]

Just another FYI, my husband was layed off 3 separate times last year & thus leading to the job he has now at the lower wages, it is not that we cannot manage our finances, as life happens and when you lose your job you have to take what you can to survive!

[LSUTiger32]

Wow, how about asking them if they want you to send them your paycheck and they can decide what you spend money on. Good night.

Let that phone ring for a month or two. Stockpile that cash and then see what they want to do. Maybe a fax showing some of the $25K properties that aren't selling will help your cause as well! ;)

Time to play hardball, you have nothing to lose at this point.

[broken64]

Hahaha, yeah I know, they are nuts!! I am surprised they didn't ask for my first born too! Anyway thank you so much for your advice I will certainly take it sincerely. We will see if they negotiate, if not we are outta here.
Thanks again, Broken

[HakunaMatata]

Wait...they want you to disconnect your cell phones; and, they call you multiple times daily on one? Hmm....I just don't understand banks!

I agree with others. Play hardball. I know houses have sentimental value to many; however, this is business. Check out local rentals and compare costs. If it appears there are comparable properties that will suit your needs, you've initiated your back-up plan. You will likely have nearly one year (or more) of rent-free status in the home if you head down the foreclosure path. Bear in mind, heading down this path doesn't exclusively mean it will end in foreclosure. We have Public Acts that force lenders to attempt to work out modifications at the borrower's request prior to foreclosure (and this process adds 90 days to a foreclosure timeline).

Hang in there!

[Meatstick]

I think you will find that BOA bought almost all of CW mortgages for .10 on the dollar. They don't give a fat rat's ass if you keep paying or if they foreclose as they will probably auction your home for around .50 on the dollar for a 400% profit.

FYI, I went to NACA and they basically laughed at me because I was current, had a 4.5% rate and only took out a 20 yr fixed loan. Had I obtained the house with less than standard financing I may have gotten some help. I was only interested in a principle reduction and that wasn't an option. I do however have a friend who went to NACA with me and he had some really crappy financing thru Countrywide/BOA. He had an 80/20 that was costing him around $2300 per month. Per NACA they negotiated to convert his loan to a 3% fixed which will shave almost $60k off over the life of the loan and his new payment will be around $1400. This happened in Oct and he has been making interest only payments of $950 while BOA drags there feet to cmplete the deal. When we were at the NACA event in Phoenix I witnessed a whole bunch of people getting there mortgages modified but it seemed most who were getting the mods were either way behind in payments, in foreclosure or had piss poor terms. Part of the NACA negotiation is $50 of your new payment goes directly to NACA. A small paltry fee for what they have done for others.

If you want to keep your castle I would highly recommend contacting them. I wasnt able to get any resolution but I witnessed many people being helped. It was quite amazing as my friend had been trying for months to get something going to no avail and at the NACA event BOA had reps there who fixed him and others up in a matter of hours.

Good luck.

[SPalin]

Sorry to hear about your income issues... good thing you filed and didn't reaffirm your mortgage! Start pocketing the mortgage payment into a savings account and save up to move. My mortgage company Chase did offer me a loan modification and it was $170 more a month than my 30 yr fixed payment! My attorney said before I filed last November to stop paying Chase and put the money away... you'll have a good chunk of change to move to a rental or use as a down payment (my attorney told me and I personally know 3 individuals that bought houses 6 months after discharge!). So save up and move on to a new life the banks don't seem to want to work with anyone, so you need to look out for #1 you!

[StartingOver08]

Ok. I'm confused. You discharged the house in a Ch 7 no asset case last year?

How is it the bank is calling you now??? Did I miss something?

Also, are you filing a new Ch 7 or a Ch 13?

[broken64]

Thanks Hakuna I will hang tough. We will miss this house because we have been here over 20 years but we are just throwing money in the wind trying to hang on to something that is never going to be worth what we owe. As of today the house on the other side of us is now empty!!! Our neighbors moved out because they also could not afford their house payment and their bank would not work with them, so that is two adjacent to us, unbelievable! I have been checking out rental houses and we can rent one for $600 to $800 and alot of those include the utilities! We would actually be able to live again and I would be able to go real grocery shopping for my family!!! Yeah, I thought it was hilarious when they told me to turn off the cell phones too as that is the only number they have for me, hahaha. Thanks again. Broken

[CCsAreEvil]

Yes it is an income problem, my husband is working full time, but he is making wages he made 10 years ago.

I can sympathize with this. I'm in the same boat. It's rough going to work doing pretty much what you did in the last job but making wages made 10 years ago. But, you gotta do what you gotta do to get through this Great Recession.