Are You A Washington Walker? Meet here!

wahampster

LoanSafe Member
May 20, 2015
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Hi all Washington Walker here. Well Kind of...I currently have a house in the Kent area and I have recently relocated to Texas. I decided last month to make the last payment but my situation is a little tricky. I am not underwater at all I owe 247K on 1 mortgage and the realtors told me they would put it up for 310 to start which after all fees would net me about 40K. Not bad, BUT...I have a renter currently whose lease expires in March of next year. Here is my thoughts Stall foreclosure as long as possible by playing the HAMP game and whatever other types of games I can play while I collect the rent money...Then do a traditional sale of the house next year around this same time as this will obviously override any foreclosure actions taking place and subsequently pay the loan off. Once that is all said an done I will file a BK 7 and start at square one here in Texas. The question that I have is... What is the current timeline of foreclosures running? I have seen if I don't respond or do anything it is about 11 months...But, Is it possible through playing the HAMP game and other games to run that out for about 15-16 months? or is that completely unreasonable? I am prepared to do a chapter 13 if necessary as i know that will stall it out a little bit and buy me more time but ideally I would like to do a 7 once its all said and done and at the same time not screw the renters over either...any advice?
 
Why not leave the renter there and continue to pay mortgage then sell it next year. Value will likely to continue to climb especially of in Kirkland.
Why screw your credit for 10 years over this unless you have other mounting financial issues. I went 18 months without so much as a Notice Of Default. Ended up doing a Loan Mod. ( in process). Your plan will still allow notices to be mailed to the rental property and posting of defaults etc...your renter could stop paying you if they find out what you are up to...just some thoughts. Again why not keep it and sell next year.
 

wahampster

LoanSafe Member
May 20, 2015
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Why not leave the renter there and continue to pay mortgage then sell it next year. Value will likely to continue to climb especially of in Kirkland.
Why screw your credit for 10 years over this unless you have other mounting financial issues. I went 18 months without so much as a Notice Of Default. Ended up doing a Loan Mod. ( in process). Your plan will still allow notices to be mailed to the rental property and posting of defaults etc...your renter could stop paying you if they find out what you are up to...just some thoughts. Again why not keep it and sell next year.
Renter is on board with plan...we buy and do everything in cash and have already begun building down here with cash don't care about not need credit which is liberating all in itself...renter will stop paying rent in December to save money themselves...don't want to sell during winter want to wait till around this time next year as more people buy during these months as opposed to December just want to make sure we can stall that long before I put it on the market.
 

Bbliss

LoanSafe Member
Feb 14, 2015
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Well, I have officially made my last payment to Wells Fargo. We found the perfect house for us, and got our renters moved in to the one we're letting go. Already, I feel a huge weight is off my shoulders. Can anyone walk me through the next steps and what to expect?
 
Well tons of info on this forum if you search. Bottom line at some point you will get a notice of default NOD after that comes notice of Trustee Sale. You should have at least a year of free rental income. I would set up a google free phone number then go to wells fargo website and update you phone number to the google number or you still get tons of calls to your cell/office phone. Keep us up to date.
 

Alex

LoanSafe Member
May 7, 2015
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Hey all. So, I made my last payment a month ago. I'm still not 100 percent sure I'm making the right life choice, but I guess that's a normal feeling to feel.

We bought a new place. I was surprised I got approved for a bigger loan owing so much on the other but I guess banks are taking more risks now.

Question 1... My old place is in an HOA. If I don't keep the lawn up, etc, and they fine me and/or hire someone to keep it up (I got a letter saying they have the right to do both) would I need to pay those fines? Or, should I keep going over there to mow? My worry is that if a lien was put in the property that the bank may have to sue me. Any info on that?

Question 2... Is the new property safe? That seems to be the case based on what I've read. But I'm pretty freaking nervous.

Thanks all. Was very happy to find this group.
 

optimalpath

LoanSafe Member
Dec 24, 2012
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Hi everyone,

I am looking to connect with awesome human beings who have mortgages on property in Seattle proper. If you're serious about getting out of your mortgage payments... well, I am serious about getting in Seattle. I am more interested in houses than condos, but open to either as long as it's not a total dud/fixer-upper -- (no offense; I've been there). I want a space to live in (within the next 3 months) and another to create art (before the end of this year). So folks who are ready to transition and ready to walk out... AND interested in manifesting a way to do both without experiencing foreclosure, please reach out through the "conversation" feature or e-mail me at [email protected] and let's be creative.
 

bythebay

LoanSafe Member
Jun 24, 2011
61
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WA
So we now have a scheduled Trustee Sale on the books!! Woot! I cannot believe it! (our thread is here)

While we are overjoyed to see a light at the end of the tunnel, in an ideal world the sale wouldn't be a month before the end of school for our Kindergartener. Since we need to move out of state that means switching school right before the end of the year. :-/

I was wondering what are the chances of the sale getting postponed just on its own without us doing anything to stall? Does that happen very often? A few weeks would make a huge difference. But I don't think we want to break our code of silence with the lender over it.

What about a short delay in eviction? One thing that was a bit of a surprise - maybe this is new - is that tenants get 60 days for eviction but owners only get 20 days. Anybody have any experience in delaying eviction? We need like 40 days.

Trying to envision how this transition is going to happen is kind of blowing my mind right now. Things are going to get crazy. What a year this is going to be, you guys.
 

heregoesnothin

LoanSafe Member
Nov 30, 2012
35
2
8
If I've learned anything in this whole game, it's that nothing is predictable and all banks are different. That being said, I can tell you what happened for us. Our trustee sale got rescheduled SIX times, each about 3 weeks apart. We attended the first sale and got a copy of the listings that showed they were asking $290K for the house, when it's only worth $230K and we only owe $270K. So we assume the reason for the multiple reschedulings is they were unable to sell it each time. ITS incredibly frustrating
 

heregoesnothin

LoanSafe Member
Nov 30, 2012
35
2
8
Sorry for the unfinished post! Won't let me edit it. Anyway... it's incredibly frustrating that there's no way to find out if your house has sold, aside from waiting for a notice on the door. Well the notice never came for us. The last attempted auction was in July and then no word, just the usual monthly statements. Now this week out of nowhere, 6 months later, we get a new notice of trustee sale for April. Hopefully it sells this time, because we moved out a year ago and it's been vacant all this time! We're so ready to be done and leave this all behind. For you, I'd recommend attending the auction. Don't worry about being obvious - there will be a ton of investor types milling around and you can just stand off to the side. Just get a copy of the listings - someone will have them at a table. It's a bit difficult to track, at ours there were several auctioneers at different tables auctioning at the same time. They seemed to go alphabetically by last name. Try to listen and see if anyone bids so you know if it sells. If not, you know you have at least another month or longer. Good luck, keep us posted! I'm curious to know if yours gets rescheduled too! Another thought... whether it sells probably has a lot to do with how underwater it is and what area the house is in. Ours is in a very depressed area with a lot of foreclosures, so I can see why it wouldn't sell for more than it's worth. Investors at auctions are looking for deals! If your house is in a hot area like Seattle, it may sell easily.
 

bythebay

LoanSafe Member
Jun 24, 2011
61
4
8
WA
Thank you so much for the reply heregoesnothin! Wow, six times. That's incredible. The area we live in does seem to be growing more desirable - which may be why they finally decided to go forward with the auction. But there's no saying how stingy they'll end up being about asking price. I wouldn't be surprised if they overshoot. Hopefully someone bites.
 

bythebay

LoanSafe Member
Jun 24, 2011
61
4
8
WA
OK so revisiting this post - - I'm confused. I was under the impression that if the home does not sell at the auction the bank then owns the property, not the occupants. From there you are done, but may be able to do various things to stay in the home - even though it isn't yours. But what you're saying is that they had an auction, and it didn't sell BUT the bank didn't take the property. You were/are still considered the owners and still got monthly statements? And that they continue to hold auctions?
 

bythebay

LoanSafe Member
Jun 24, 2011
61
4
8
WA
Because I am so shocked at what is happening to heregoes, I found this in regards to the Notice of Continuance for a Trustee Sale:

"RCW § 61.24.040(2) will now require the trustee to respond to any written request for a current payoff or reinstatement within ten days of receipt of the request. Previously, there was no specific timeline to respond to such a request in the state of Washington. Lenders must now provide foreclosure trustees with quotes within this timeframe.

Foreclosure sales in Washington can be continued up to 120 days from the original sale date. Under the new statute, sale postponements will be slightly more expensive in Washington as written notice of these sale continuances is now required under RCW § 61.24.040(6) if a sale is continued beyond the date of the sale. Notice must be sent to every party who received the original “Notice of Trustee’s Sale,” which would include junior lienholders. The good news is that this should put an end to those allegations that continuances by oral proclamation constitute some sort of “stealth” continuance, where borrowers often claim to have been unaware of the new sale date when there was a bankruptcy filing or forbearance plan. If the sale is continued for up to seven days, notice of the new sale date shall be sent by regular and either certified or registered mail not less than four days before the new sale date. If the sale is continued for more than seven days, written notice is required to be sent not more than three days after the date the continuance is called. Written notice is required to everyone who was sent the notice of trustee’s sale under RCW § 61.24.040(1) (b)(i) and (ii). The cost of continuances will be increased due to the additional notice and service."

http://www.usfn.org/AM/PrinterTemplate.cfm?Section=USFN_E_Update&template=/CM/HTMLDisplay.cfm&ContentID=9259

It sounds like heregoes is well past the 120 days threshold! Where are you in WA heregoes?

Has anyone else out there experienced a Notice of Continuance for a Trustee Sale in WA??
 

heregoesnothin

LoanSafe Member
Nov 30, 2012
35
2
8
Bythebay - Sorry I didn't see your post sooner! Yes they are definitely way past the 120 days. I've read the same RCW about the 120 days, but I wonder if that only applies to how far out one auction can be scheduled from the previous date. Maybe they are allowed to schedule multiple auctions. But even if that's the case, they're definitely past the 120 days from the last auction date in July 2015. I wonder what the implications are? Even if someone called them on it, it's not like they won't still get to foreclose on the house. Well, we may be having to hire an attorney soon anyway, so if that's the case I will ask about this too. We had someone wake us up this morning pounding on the door. We didn't answer, but he said through the door that he was looking for me (my maiden name) and wanted to "discuss legal matters." We probably should've answered the door, but were too freaked out to respond. I'm sure someone is trying to serve us papers, which probably means we're getting sued. The only question is, who? It's either our second lienholder, CitiMortgage, or the HOA. I'm crossing my fingers it's the HOA - because that's a smaller amount of money we could handle. We should've kept paying the dues, but we thought the bank would've taken over long ago and we'd be off the hook. No such luck! I can't even tell you how frustrating and scary it is to feel like nothing is going like we though it would. I spent months researching all this before we walked, and now I'm starting to regret the whole thing :(
 

Alex

LoanSafe Member
May 7, 2015
3
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Update on my process: The auction was May 20. I'm not in the home, so I don't know if anyone has been by or anything posted. How can I figure out if it actually sold at the auction?

Zillow now shows the property status as "pre-foreclosure." Does this tell me anything?
 

Alex

LoanSafe Member
May 7, 2015
3
0
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Update on my process: The auction was May 20. I'm not in the home, so I don't know if anyone has been by or anything posted. How can I figure out if it actually sold at the auction?

Zillow now shows the property status as "pre-foreclosure." Does this tell me anything?
Update on that: The property indeed did sell at auction. I swung by and a flip is in full progress. Nice to close that chapter of this process.

Now my only question/worry is about potential tax implications. Seems I get different information everywhere I look. On this forum in 2012, some folks mentioned that there are none due to the non-recourse nature of our state. Does anyone know if that's still the case? Has anyone got a fat tax bill after their foreclosure?
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
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Based on my understanding, there is no tax implications on foreclosed property in Washington state if it was a non-judicial foreclosure. This will also prevent the lender who forecloses from seeking a deficiency.

Here's an excerpt from the IRS code... .

2. Is Cancellation of Debt income always taxable?

Not always. There are some exceptions. The most common situations when cancellation of debt income is not taxable involve:

Bankruptcy: Debts discharged through bankruptcy are not considered taxable income.

Insolvency: If you are insolvent when the debt is cancelled, some or all of the cancelled debt may not be taxable to you.You are insolvent when your total debts are more than the fair market value of your total assets.Insolvency can be fairly complex to determine and the assistance of a tax professional is recommended if you believe you qualify for this exception.

Certain farm debts:If you incurred the debt directly in operation of a farm, more than half your income from the prior three years was from farming, and the loan was owed to a person or agency regularly engaged in lending, your cancelled debt is generally not considered taxable income.The rules applicable to farmers are complex and the assistance of a tax professional is recommended if you believe you qualify for this exception.

Non-recourse loans:A non-recourse loan is a loan for which the lender’s only remedy in case of default is to repossess the property being financed or used as collateral.That is, the lender cannot pursue you personally in case of default.Forgiveness of a non-recourse loan resulting from a foreclosure does not result in cancellation of debt income.However, it may result in other tax consequences, as discussed in Question 3 below.

3. I lost my home through foreclosure. Are there tax consequences?

There are two possible consequences you must consider:

Taxable cancellation of debt income.(Note: As stated above, cancellation of debt income is not taxable in the case of non-recourse loans.)
A reportable gain from the disposition of the home (because foreclosures are treated like sales for tax purposes).(Note: Often some or all of the gain from the sale of a personal residence qualifies for exclusion from income.)
 

heregoesnothin

LoanSafe Member
Nov 30, 2012
35
2
8
Update: We are finally DONE!!! Our house didn't sell yet again (at the 7th auction), but the bank FINALLY foreclosed. We got a notice on the door saying "This home is now owned by Fannie Mae" and there was information about "relocation assistance." We figured this must be cash for keys. The house has been vacant for over a year, so we'd given up all hope of getting cash for keys! They gave a phone number for a local real estate agent to inquire about relocation assistance. The whole thing worked very smoothly. We were offered $3,200 to vacate within 15 days or smaller amounts for 20 or 30 days. We did have some stuff left at the house, so we quickly got everything out and arranged for a date/time to meet the agent to inspect the house. She instructed us that it had to be "broom clean," which meant all possessions, debris and garbage had to be gone, but we didn't have to mow the lawn, vacuum, scrub the showers or anything like that. When she inspected, she walked through each room, checked cabinets and made sure appliances that came with the home (stove, microwave, dishwasher) and light fixtures remained. It took all of 5 minutes, then we signed a paper saying we agreed not to sue the bank and she gave us a check! One thing I didn't think of was cancelling the homeowners' insurance policy. The insurance company got notice it had changed owners and called us about cancellation. After filling out the cancellation paperwork, we received an $800 check in the mail for a policy refund, made out to me. Since our insurance was paid out of an escrow account that we haven't been funding since we stopped paying the mortgage, I assume the money should have gone to the bank. I'm not going to volunteer it though! I cashed the check and will sit on it and see if the bank contacts me. Has anyone else dealt with that?

Thank you to everyone on Loan Safe for your help throughout this painful process. I never would've had the courage to go through this without everything I learned here. To anyone else considering a walk, here are a few lessons I learned:

1. Keep paying HOA dues! We stopped paying ours when we moved out, because the auction was only a month after the dues were due. We had no idea the bank would take an entire year of trying multiple auctions! As luck would have it, the HOA sent us a notice for Small Claims Court the same week we got notice the bank had finally taken the house. What started as $850 in dues turned into $1700 after all the late fees, admin fees and small claims fees. We paid the balance just in time to avoid having to go to court, but paid way more than what was originally due.

2. If possible, stay in the house until you get the notice on the door that it has actually sold at auction or been taken by the bank. We got nervous with the first auction date and didn't want to be in a rush to find a new place, but as it turned out we could've stayed rent-free in the house for another year! That's a ton of money we needlessly wasted on rent!

3. If you need to move, rent out the house! We kick ourselves for not doing that, as we could've made a ton of money!

4. Nothing is predictable with banks. Even with all my research on Loan Safe, things happened to us that hadn't happened to anyone else. I was sure there would only be one auction. I didn't know it was possible to hold 7 auctions! Also you never know if it actually sold. You get a notice of the auction date/time but they don't send you anything saying whether or not it sold. You'd think they would post auction listings on the County website saying "sold" but I never found anything like that. We'd only know it hadn't sold when we got the notice for the next auction date.

5. If the house is vacant for any period of time, leave the blinds on the windows. As a result, the bank was never able to tell if the house was occupied or not. I'm sure that helped us to get "cash for keys" and kept the house safe.