Getting out of foreclosure

[jrsmom]

DD has file BK7 and house is in foreclosure. Bank has filed to lift the stay and court date set for 1/31. DH & I are going to try to get house out of foreclosure. She's four payment behind and at this point we have no idea what fees etc have been added on. My general question is this, do banks generally negotiate after they've started the whole foreclosure procedure? We're thinking of telling the bank that we'll bring her payments current immediately and guarantee the next 12 months payments if they will forego all the fees. I'm guessing they could go for it, I can't believe they want 1 more house they can't sell in their ever growing inventory? Any thoughts? Thank you.

[BassBoy]

I do believe that the foreclosure process can be stopped if the payments are brought current. You're right, the bank DOES NOT want to own the house. Banks are in the businees of making loans and making money and NOT OWNING REAL ESTATE.

I'm not sure if you'll be able to have the fees waived or not, but it's worth a try. I would think that if the if the borrower is able to prove temporary financial hardship, the bank may be willing to forego the fess and/or workout an agreement to repay the what is owed (the arrears).

[ssdsco]

DD has file BK7 and house is in foreclosure. Bank has filed to lift the stay and court date set for 1/31. DH & I are going to try to get house out of foreclosure. She's four payment behind and at this point we have no idea what fees etc have been added on. My general question is this, do banks generally negotiate after they've started the whole foreclosure procedure? We're thinking of telling the bank that we'll bring her payments current immediately and guarantee the next 12 months payments if they will forego all the fees. I'm guessing they could go for it, I can't believe they want 1 more house they can't sell in their ever growing inventory? Any thoughts? Thank you.

I think the mortgage companies are a lot more willing to deal now then they were six months ago. If you can find out what the value of the home is in a foreclosure action and if your mortgage is higher you may be able to negotiate a deal.

[HHM]

Typically, if the house is ALREADY in foreclosure, the bank wants the ENTIRE balance paid off, not just the arrears.

As a practical matter, I understand your desire to help your daughter, but you should step back and take a look at this objectively and really consider whether its worth saving the house.

1. Can your DD afford the payment after the BK is complete (i.e. would the payment be 30% or less of her gross monthly income).
2. Is there any equity in the house?
3. If no equity, is there likely to be any equity built up over the next 10 years.
4. Is her current package of mortgages better than what she could get now (BK notwithstanding).

For most people who bought a house in the last 5 years, the answers to question 2 and 3, are no. Especially if the buyer used "special" mortgage deals. Home ownership, in this environment, is actually leading to a negative return on investment and most people are simply better off, both from an investment and practical point of view, by simply letting the house go.

But you are correct, even though foreclosure has started there may be some willingness on the part of the bank to allow payment of the arrears to simply reinstate the mortgage, but I would not count on it. Keep in mind, most BANKS do not OWN the mortgages, the mortgages have been packaged as securities and sold with various promises and gaurantees to the investor...thus, the banks abilty to modify the terms of a mortgage or default clause are quite limited.

[familyof7]

I was aboutto go through foreclosure but the bank called me nd said if the past due can be brought up we will stop the foreclosure the bank told me that they dont want our house because it means they must hire an attorney pay fees and loose money.

[jrsmom]

Thank you all for your responses. I had no idea that the mortgage company could want the ENTIRE balance paid, ugh. If that's the case, Wells Fargo will have one more empty house and DD better start looking for an apt. We have looked at this situation of all angles (that's hard when you're a mom) but have decided helping her keep the house is a good thing. Alittle background, DD purchased the house in 2004 and unfortunately now there is 0 equity but fortunately (I think) she has a good (if there is such a thing) arm through Wells Fargo, adjusts only 1 time per year and no more than 1/4 %. Her payment is only about $200 less than an apt would cost her. Extra income tax she would have to pay would eat that away. Payment is under 30% of her monthly income. Once her BK7 goes through she'll be able to make future payments.
Thank you for listening.

[gophermn]

In our case I can make payment arrangements before the Sheriff Sale. After the sale the house than goes into a redemption period for 6 months and that is when I MUST pay the entire amount.

[jrsmom]

update

Just a quick update. We paid the amount due to get the house out of foreclosure. Atty for Wells Fargo wouldn't negotiate so we paid what they said. Fees alone amounted to over $2000 UGH! Oh well, mortgage is current. I'm assuming now all she has to do is make sure her payments aren't 1 minute late, reaffirm her mortgage at end of bk7 and live happily ever after. Let's hope.