Foreclosure...Worried

[JohnPghPa]

I never thought I would have to deal with this in my life, especially with 4 kids under my belt, it is humiliating!
I filed chapter7 and it was discharged last year. And my house was included on the chapter7...I did not sign any reapps or anything,,,they never asked me too...
I have a 1st and 2nd mortgage.
1st mortgage shows 33k on the statement as owed.
2nd mortgage shows 14k as owed on statement
I am up to date on my 1st, only two weeks behind actually, and my second I am currently 90 days behind, due to my income being lowered.
I got a letter from the 2nd mortgage co. "citifinacial" stating that they need to talk with me, that I am 90 past due, before they send it into foreclosure.
I didn't know that the 2nd mortgage could foreclose, if they don't have the deed?
I called my attorney, and of course, he alreayd got his money, and practically blew me off on the phone, now that my chapter 7 is over. I asked him how long I had to stay here, beig I am 90 days over, and they want to send to their foreclose dept.
He told me it could be as little as 60 days?...he wasn't sure. "Almost as if he didn't want to even talk to me", since he got his money.
I was almost hoping for 4 months, so I could have time to save money, being I don't get much on SSI.
I am shaking so bad inside it is unreal.
The house is beyond repair, the foundation is coming apart, and the roof needs fixed, and the furnace is now about on its last leg.
I am in PGH, Pa, if that helps.
Has anyone encountered this before?
I know I am 90 days behind on the 2nd mortgage, but will I have at least 4 months yet?
They don't have the deed, but he said that it didn't matter?
The house riight now would only sale for approx. 25k, since the neighborhood went downhill drastically. thanks for all advice given in advanhce...i am just scared, and lost...

[BK'd-Betty]

I think you have some time - it appears that PA is a Judicial State and it takes 8-10 months.

Here is a link I found with some information:

http://www.realtytrac.com/foreclosure_laws.asp?strState=Pennsylvania

I'm sure there are better sites out there that provide more information, this is just the first site that I found.

[BassBoy]

Your second mortgage is a lien against the home. It's really no different than your first mortgage. That said, the can, and they will foreclose when you defualt.

Bk'd-Betty is right. You have some time. I live in Ohio, filed in Oct. 12, 2005 and our home was auctioned on Jan.05,2007.....so......you could be there a while.

Don't sweat this too much. You'll get lots of documentation over the next several months and you'll have a good idea of when you'll be needing to leave.

[JohnPghPa]

Thanks!!!

I feel a bit better now. I did find out that who I talked with, My wife said was not my attorney, it was some type of "helper", that works there.
I was hoping for at least 4-5 months, so I am able to get money saved, and moved.
I want to relocate anyhow to SC. I know some folks down there, and let me know I would be much happier than living in Pittsburgh, Pa.
I feel like a low life, and loser letting my home go. But I guess I gotta keep my chin up.

[BassBoy]

I feel like a low life, and loser letting my home go. But I guess I gotta keep my chin up.

Don't feel this way John. It happens to the best of us. I had my income lowered as well and I eventually had to let my home go, so I know how you feel. Believe me, it gets better with time.

Like you, we were scared about what was going to happen and where we were going to go. With 2 energetic boys, there was no way we wanted to coop them up in a small apartment. Well turns out, we were able to find a great house to rent. We have a nice place and a great homeowner who really takes care of the place.......so......you see, there is hope. There is a light at the end of the tunnel.

[yabyum28]

foreclosure worries...

Hi John,

Lets clear up some confusion. I have 6 years experience working directly in the mortgage industry and can easily and accurately answer your question.

A second mortgage company has a vested interest in the property. Specifically they are listed as being a lienholder on the title to the home just as the first mortgage company is. Though they are a 2nd mortgage which means they are behind the 1rst mortgage company. In practice what this means is in the event Citibank decides to foreclose on your home, which they can, and then they sell your home they would have to pay the 1rst lien holder (which is the company who holds your first mortgage) prior to them getting any money from the proceeds of the sale of your home.

If your home is only 25k and you have a first mortgage alone that is worth more than the home it is unlikely that the 2nd mortgage company would even consider foreclosing though. That is to say, they would get no money from it since all 25k of the proceeds of the sale of your home would go to the mortgage company in first lien position since they have first 'dibs' into the secured asset (your home).

This is a very unusual situation/problem for Citibank. I am a bit skeptical of what you are telling me and am thinking something is fishy here. Here's why: Typically mortgage companies (especially citibank) are more savvy than this when they initially write mortgages or agree to buy loans from brokers or correspondent lenders. This is why they hire appraisers, underwriters, etc... to review all relevant facts prior to writing the loan. They do this so that they can recover the amt they loaned + interest if the homeowner stops paying them. It's very rare that home prices in an area drop so dramatically as you've stated that a 2nd mortgage effectively loses interest in the property because the first lien holder takes up all of the present market value of the home!?! Did your home value really drop this dramatically? What was the home appraised at the last time you refinanced or took out the 2nd mortgage? And how long ago was this? And your certain your home is only worth roughly 25k??? You better be certain of this. I mean if your home turns out to be worth 35k or 40k the 2nd mortgage company may have a reason to actually proceed with a foreclosure even if they only recover part of there moneys.

As far as how you should handle this. You need to call them TOMMOROW and fully explain your situation. While based on the information you've given me it makes no sense for Citibank to foreclose I've seen crazier things happen. Especially when you are talking about a massive company (citi corp which is the largest bank in the world) as they may have just a blanket policy where if you go 120 - 150 days down they will foreclose regardless of the value of the home. Try to demand to speak with a manager or the highest person possible at the company. If your home is worth only 25k today then make sure they are aware of that and make sure you explain that it makes absolutely no sense for them to foreclose. Try to get them proof that your home is worth only 25k by sending some comp's of the area, or a recent appraisal in order to prove to them your home is not worth foreclosing on! Also, put things in plain english for them and make it clear that you know if they do foreclose they will bear the burden of the legal representation and will not see a dime from it since the first mortgage will receive all the money from the sale. Finally if you so desire to try to get caught back up, you need to try to work something out with them. Good luck!

[BassBoy]

I had CitiBank (CitiFinancial) and a friend of mine (who has filed Ch.13 BK) has CitiBank as well for a second mortgage, and although they may not foreclose on a home that is valued less than what is owed, John would still need to cure the default in order to stay the foreclosure. IMO, it's not worth telling them anything because what I have learned is that they want what is owed to them. They don't really care about our situations. And not to mention that John has stated he has suffered a loss of income so they are no guarantees that he can keep up the payments. I was in the same situation as John and the lenders were not, and are not, as sympathetic and understanding as some may believe. We had to provide the lender(s) with financial information in order to "prove" that we would be able to keep up the payments once the default was cured (if we could even cure it in the first place). Well, when you're in the negative, like we were, they really can't do much to help you. You become a risk that you may default once again in the future.

[JohnPghPa]

....

The reason I am saying my home is approx. 25k or so..give or take a small amount.
The house two doors up, just sold for 22k, and the one down the street, twice the size of mine, and is brick...."mine is wood frame", theirs sold for 38k.
I am just guessing, beings mine needs so much done, and the neighborhood has turned to a lot of section 8 rentals over the past three years, and the crime rate is getting crazy!
We do keep our home very clean, and try our best to work on it, but it does need major things done!
I am so confused on whats going on. I was so worried they were gonna go to foreclosure, which I am sure they will do, and we would have to leave in 60 days or so.
I was honestly hoping for 5 months or so....hopefully!
I am not trying to get a free ride, but trying to save some money to make things easier on the move.
I never thought I would be going through something like this in my life, I am still in disbelief! Citifinacial, when I borrowed the 14k, 4 years ago, never even checked the value of my home.. They approved me, and gave me the money the next day!
I of course grabbed it, because it is hard to say NO! It was one of those fake checks you get in the mail, and i jumped on it.
I am sure they have checked into my area at this point, and would have to know that this area is getting worse! I can buy a house three blocks away, right where they just built new projects, for approx 20k, and would be in perfect condition!
Sorry for the long drawn out explanation....

[BassBoy]

I know how CitiFinancial doesn't check a homes value. At least I didn't believe they did. On the other hand, they do base it on "comps" so they are probably very close.

That aside, I know what's it like when you're hurting. You'll listen to the first lender that puts a "great deal" in front of you. It's like wandering through the desert. You see a mirage and you go to it for a drink. But you're not drinking the water, you're drinking the sand. Why? Not because you're thirsty, but because you don't know the difference.

Try not to be worried John. You have some time to save some money, and yes, FIND THE PERECT PLACE FOR YOU AND YOU'RE FAMILY. Everything will be alright. Although, I would start making inquiries to rentals and such and get a feel for what's available and get an idea of what kind of money they are. You have some time to prepare for a move, so take advantage of it.

[JohnPghPa]

Thanks!

thanks very much...I am looking forward to moving on.
On a side note:
Citifinacial called here this morning, when I was gone, and asked my wife if we would like to defer the payments till the end of the loan, and just make next months payment and start a clean slate? I didn't expect that. They sent me a letter that they were gonna foreclose!

[BassBoy]

thanks very much...I am looking forward to moving on.
On a side note:
Citifinacial called here this morning, when I was gone, and asked my wife if we would like to defer the payments till the end of the loan, and just make next months payment and start a clean slate? I didn't expect that. They sent me a letter that they were gonna foreclose!

They are looking to recast the loan (got this term from HHM). This will make you "current" and they will not foreclose. If your intentions are to leave the home and move on, then ignore their offers and don't play their game.

[JohnPghPa]

Update!!!

Well, I did let them defer two payments to the rear, and then made one payment! But I am just wasting time and money.
I am now 60 days behind on my first mortgage. There is tons of projects being built around me. I guess it is time to let go!!1
Te only concern I have, is that:
The first mortgage co. US Bank, who called to let me know that I am getting into 60 days behind..."like I didn't know", said that they are telling me because my load was FHA....That kinda scared me...What did he mean by that?
Can they getme out faster, because it was a FHA loan?
That kinda caused me some anxiety...Or I am just being paranoid!
I am ready to move in June. am currently 60 days behind onmy first mortgage, so I am sure they shouldn't kick me out by June. But when he reminded me that it was an FHA loan, I don't know what he meant by that...I hadthe house fall under the Chapter 7, so I know I will be free and clear...

[SinkingFast]

Part of what has to do with how quickly a Lender moves to Foreclose is the Investor backing the note.

There was a poster here when I first joined who worked in the Mortgage Industry. She suggested we get CountryWide to tell us who our investor was. The Investor could make the call to hold on Foreclosure.

In our case, the Investor was FannieMae who was not inclined to hold off on Foreclosure. I doubt FHA will be easy to hold off as well. Many of the Gov't programs have such strict underwriting guidelines that they do not wait long to move to Foreclosure.

[JohnPghPa]

Oh no...

Oh great!!...I thought he said that for a reason! It was the way he said it.

Well as of April 1st, it will be officailly 90 daysbehind. I didn't get anything though stating that they are gonna go to foreclosure yet, but I am sure thats on the way.
I better find something fast! I was hoping to let the kids finish school where their at until the end of May. But I don't want to end up homeless also. Thanks for the response!!!!

[SamanthaJones]

What about a defiency if the sale loses money?

And anyway- really, if you are not going to pay the second mortgage, why pay the first? And as far as home values dropping, I beg to differ with you yabyyum28 - it is 'stunning' how prices have fallen in Arizona, to the point not only have the owners lost all equity- but it would cost many thousands in fees just tp pay the loan off if they wanted to sell. I know lots of poorr folks that have suddenly lost their 'wealth'. But there are more houses on the market everyday...the lower the prices, the more go up for sale, etc. Also- look up the housing market in Indiana, or say, Detroit- it's a wild fire out of control. Also- all the experts and advice I have been seeing is that the market will drop even more than had been predicted. Also, John- it doesn't matter which mortgage is in default, or who owns them- the state foreclosure procedure dictates the timelines to lose your house. It doesn't appear like your house is one they'd want to own too badly, or too soon, though?