Away we go from the Valley Joe...to walk or not to walk...yet.

Pejutah

LoanSafe Member
Sep 18, 2011
322
5
18
Bay Area, California
Hello to all and thank you to all for this wonderful, highly informative site.
I've been reading up and have really gotten some good advice. I thought I'd start a post about my walk, since others in who have walked in Northern California have really been helpful to me.

Here are my stats:
Bought in 2005 at the height of market frenzy after being outbid 19 times all around Bay Area.
Finally gave up and moved VERY far from work to Vallejo. If I knew now what I didn't know then about this town, I'd have chosen differently!
I do not make a ton of money, but I managed to save 20 grand to put down on the house over about that many years. Single chick, doing it on my own. Of course, all that is gone now.

First loan: 315k from first Greenpoint Mtg., bought by Countrywide, now BofA. Interest only for another 5 years.
Second: Heloc for 59k. from Wells Fargo with balloon payment due in 2015 I will not have owing to no raise and so many things gone wrong with house that I have had to sink a boatload of cash into the place.


All loans are original, taken out at time of purchase, and never refinanced.

Currently, my mortgage, being interest only is WELL below what I would be paying in rent.

I have an appt. with a real estate attorney this coming week who was recommended by Walk Away Mare Island on this site. Just want to be sure I'm going about all this correctly on top of all the good advice here.

I've been told, I won't be on the hook for tax consequences owing to the original loan and non-recourse status of California, and that I won't' be on the hook for the house in the long run. At this point, it's just my credit that will take a hit, along with the potential that I won't live long enough to save for another run at home ownership!

Zillow lists the current value of the house at 129K, however, I haven't seen a house sell for more than 80k in four years on my block...so I think that's a bunch of hooey.


I've moved bank accounts to a credit union, and am thinking of transferring balances from credit card that holds my large loan to a new card then closing the others. I got my google voice set up for BofA, but can't seem to find where I can change numbers on line for Wells. Changed both work and home numbers.

I'm having still some trouble reckoning out whether to walk NOW or to wait it out another couple years and THEN walk. Presuming after I walk I will not be under attack from the banks or the IRS or State of Cal. tax board no matter when I walk owing to non-recourse loans and that the second can't become a sold out junior I have to worry about, would it make more sense to stay put another couple years and sock away money into the bank?

I am VERY certain I can't rent a comparable place anywhere closer to work for less than 2500/month or so. Current mortgage at interest only is under 1000 for my house...for now, while interest seems to stay low.

So, before I get out of here, would anyone give me the advice that it'd be smarter to stay a couple years and put 1000 into savings, pay the lower mortgage, and then later, as I get near the balloon payment or if interest rates increase, bail at that time with more money in the bank than I'd have if I went for it starting this month?
or
Is it better to just cut and run at this point?

I want to chronicle this whole episode, in the hopes that it'll help some other person become as empowered, albeit somewhat wishy-washy, as I feel from having read some of these posts!
 

freedomwon

LoanSafe Member
Oct 30, 2010
2,794
23
38
California
Pejutah - The answer is jumping off the page as I read your post. To me, it's a no-brainer. So long as there isn't a major concern about your safety living in that area & you strictly can look at it from a financial standpoint. YOUR HOUSEPAYMENT IS $1500 CHEAPER THAN RENT!

Re-read your own post just to be sure. Even if continuing to live in Vallejo is costing you 500 - 600 per month in gas traveling to work, you are still way ahead of the game. (Providing you do o.k. with the stress of the commute).
 

Pejutah

LoanSafe Member
Sep 18, 2011
322
5
18
Bay Area, California
Freedwoman, I know....I had initially thought: GOod lord...get out of there, because I was frightened by the idea that the tax guys at the Federal and State level would come after me, and I'd end up paying a ton to both of them and to banks. But, and I hope I've got this correct, since I'm non-recourse state, and as a result, not on the hook for the taxes or a deficiency judgement (correct?) I may be better off hanging out till the balloon payment hits in a few years.
BUT
Yes, the commute IS a huge problem. Two hours a day ONE WAY to the peninsula to work, then another 2-3 home depending on traffic. Yes.
Yes. My neighborhood has really taken a nose dive and I've had people try to break in while I'm home. I'm on my own, so this is scary stuff, you know?
It makes me wonder about waiting it out....and bailing at a later date. Also, I'll be 50 in a couple years (dang it) and I wonder about cutting losses now to start rebuilding that credit so I can get into a house again before I'm 60 if possible. If I wait, houses may again be out of reach for me, as they sort of were during the boom, which is what landed me here in Vallejo in the first place.
Although, if all the tax/recourse/onthehooktobanks stuff is true and the only hit I'll take is a credit hit, I could maybe save a tasty chunk of cash to stay here...if I could manage to not go insane from the commute, or lose my life in my neighborhood...
It is complicated.
And I've been concerned that this old house will need major repairs soon...and I won't' have the cashola to get them done. It's an IF and WAIT and see sort of thing, but it still seems scary.
 

Pejutah

LoanSafe Member
Sep 18, 2011
322
5
18
Bay Area, California
Update:
Have done some tremendous soul searching since my last post. And today, went to visit the lawyer that Walk Away Mare Island recommended. In the end, even though staying here a few more years will be cheaper, I think I'm just done with my dicey neighborhood, terrible commute, and lack of life here...not to mention my house that is never going to recover the losses it's taken. The law dude made several good points about just getting on with it all and starting to rebuild, and in the end, I think this is what is best for me. In fact, I had this tremendous sense of relief just hearing some other person say, NO you ought to consider getting out sooner than later.

He did make the point that the world might be a different place later on and that right now, no one doesn't know someone who has not been hit financially via foreclosure or short sale and right now banks are swamped (ha ha, good. They deserve the swamp they get!) but that in five years---it may be another story.

I get that a great deal hinges on MAY BE another story, but MY story is that I don't think I'll be able to hang with my commute, my lack of life, my nasty crime ridden 'hood, or the general lack of anything good about Vallejo another three years.

Soooo..... I got the google voice set up, moved my accounts around, and will now order a credit check to see where I'm at for certain before I go rolling off.



Fingers crossed, good people of loan safe, that I'm making the best business decision...for both wallet AND heart. I'm hoping it takes longer than 8 months to foreclose....but....will deal as I go.

So I'll document here if folks want to know what happens. So many other posts, especially Underwater Vallejo, and Walk Away Mare Island, have helped me make my choices, and maybe my walk will help someone else.

This month....my walk begins.

Oy!
 

underwater_vallejo

LoanSafe Member
Feb 11, 2010
327
4
0
Vallejo, CA
Best of luck in your walk from Vallejo! Since you already know that rent will significantly increase your costs, I recommend you try and play the HAMPster wheel and try and stay in your residence, rent free, for as long as possible. I'm not sure if you ever refinanced or not, but even if you did, talk with your first lender and pretend you want to try and do a loan modification. The longer they think they might be able to keep you in there, the longer it'll take before they pull the trigger and foreclose. Don't waste your time even bothering to communicate with the 2nd lender... They just plain sh*t out of luck.

It's a good move to start the process to get out now... Just try and work it so you can stay in there rent free for the next 12-16 months... It might be a little tougher as banks seem to be streamlining the process. Still, there are plenty of great threads here that will offer suggestions as to how you can delay the foreclosure.
 

TomEason

LoanSafe Guide
Jun 18, 2009
12,390
85
48
SF Bay Area CA
Pejutah

Thanks for your update. I do understand your motivation for getting out of the neighborhood and shortening your long commute.

Another option for you to consider is this. Keep your occupancy of your Vallejo home for the time being (after all it's rent free) and find a pied a terre pad closer to your school.

That way you can choose to avoid the commute to Vallejo whenever you choose to do so. Needless to say, the rent on the pied a terre needs to be reasonable to make financial sense.

Something to consider, if you haven't already.

Good luck to you!
 

Pejutah

LoanSafe Member
Sep 18, 2011
322
5
18
Bay Area, California
Best of luck in your walk from Vallejo! Since you already know that rent will significantly increase your costs, I recommend you try and play the HAMPster wheel and try and stay in your residence, rent free, for as long as possible. I'm not sure if you ever refinanced or not, but even if you did, talk with your first lender and pretend you want to try and do a loan modification. The longer they think they might be able to keep you in there, the longer it'll take before they pull the trigger and foreclose. Don't waste your time even bothering to communicate with the 2nd lender... They just plain sh*t out of luck.

It's a good move to start the process to get out now... Just try and work it so you can stay in there rent free for the next 12-16 months... It might be a little tougher as banks seem to be streamlining the process. Still, there are plenty of great threads here that will offer suggestions as to how you can delay the foreclosure.

Thanks Underwater Vallejo,
I'm hoping it is smooth. I'm hoping it'll take me through to summer, as that'd be the best time to go, and honestly, I just want O U T at this point, now that I've made the decision.

Must admit 'though, I'm preeeeetttttttttyyyyyy tummy turningly nervous about it all. That first missed payment is coming up and it all feels quite like the unknown. Scary.
 

Pejutah

LoanSafe Member
Sep 18, 2011
322
5
18
Bay Area, California
Thanks Tomeason,
Believe me, I've considered this as well. Good advice, but I have pets...so that throws a huge wrench into that! Gotta feed them and let them out etc....every night. My best guess is that I'll try to get as much money as I can out of my beloved home before I give it back to the bank who can then fix the roof and the plumbing!
Pretty nerveux about missed payments from a person who has never missed a payment for anything. The lawyer I talked to said a short sale would be less of a credit hit, but I don't see that many people on this board (or anywhere else for that matter) who felt that the short sale process was very groovy. IN fact, it seems if they were to get a do-over, they'd forgo the short sale altogether.

Will keep folks posted about what goes on next.
Thanks again for hanging in with all of us.
 

TomEason

LoanSafe Guide
Jun 18, 2009
12,390
85
48
SF Bay Area CA
Pejutah

Thanks for your post. Yes, the pets rule out that suggestion.

Unfortunately, you'll find that eventually renting a desirable place will be more challenging because of your pets, as many landlords don't rent to tenants with pets. You will find a place but it'll be more difficult.

Good luck!
 

Pejutah

LoanSafe Member
Sep 18, 2011
322
5
18
Bay Area, California
Pejutah

Thanks for your post. Yes, the pets rule out that suggestion.

Unfortunately, you'll find that eventually renting a desirable place will be more challenging because of your pets, as many landlords don't rent to tenants with pets. You will find a place but it'll be more difficult.

Good luck!

Yes....sadly I know this...but they are my children, and with me they go! I figure I'll start looking around December for a place, and the first one that works, and that will take them and myself---I'll run for! And maybe then will take your advice about renting my house out while the rest of the foreclosure takes place. Might be smart.
 

Pejutah

LoanSafe Member
Sep 18, 2011
322
5
18
Bay Area, California
This morning, ordered credit reports so that I'll have them in hand for new landlords.
I'll post the results here so that others can maybe see how credit can get hit.

Currently, Myfico shows my credit standing at a remarkable (even I was surprised) 801.
Gonna be a drag to lose that! So, we'll see. My first missed payment will be official in one week.
Will continue to update as things go.
 

Pejutah

LoanSafe Member
Sep 18, 2011
322
5
18
Bay Area, California
Here's a question:
I just checked the time lines on the foreclosure radar website for my zip code.

It reads 264 days from notice of default to sale date. Does this mean that in addition to however long it takes them to get a notice of default out to me, which I understand is preceded by an intent to accelerate, that it's 264 days (instead of the 3 months normally?) from NOD to NOS? That could be a long time, couldn't it? Or am I reading that incorrectly. Or am I just plain brain dead in the math logistical department?
 

TomEason

LoanSafe Guide
Jun 18, 2009
12,390
85
48
SF Bay Area CA
Pejutah

Thanks for your question. It means from the date of the NOD until the date that the actual sale took place. Here's a quote of the definition from their site. "Time to Foreclose—The average number of days between the filing of the Notice of Default and the final sale at auction for foreclosure sales that occurred during the specified month."

So, in your zip code, there was an average of 264 days from NOD until the sale took place in a previous month.

You will likely have a long time of rent free living if you want it.

Or, you might consider moving into your new rental down the peninsula, and renting out your place. Since you'll no long be paying mortgage, property tax, utilities, etc, you'll enjoy immediate positive cash flow rental income. And you will likely enjoy that income stream for many many months!
 

Pejutah

LoanSafe Member
Sep 18, 2011
322
5
18
Bay Area, California
Hoping for that very lonnnnng time.

Thanks Tom! I appreciate the hopefulness of the long term stay rent free. It will help with the move, for sure. So, now, I'll keep an eye on my credit report, and begin moving all money into a safe keeping account far from the eyes of Wells or BofA.... Hooray for credit unions! :nuts:
 

Pejutah

LoanSafe Member
Sep 18, 2011
322
5
18
Bay Area, California
Ok, so here is an interesting development. I thought I'd set up google voice with my Heloc with Wells so as to be prepped for the onslaught of calls. Last night, went in to check on a couple things on that account, as I intend to close my checking account and my credit card with Wells (after 20+ years as a customer...ish) and found that neither of my numbers for google were there any longer and were replaced by my original numbers!
I have tried now on two different computers to re-enter the numbers and update my personal information, and Wells will have NONE of it. Keep getting the 'internal error' message. I'd really like these numbers to change, and would really like not to speak with a real person in order to do it.
Has anyone else experienced this whacky-ness? Am I being paranoid to think the bank has caught on that I may walk since I usually pay the first week of the month?
 

TomEason

LoanSafe Guide
Jun 18, 2009
12,390
85
48
SF Bay Area CA
Pejutah

I encountered the same issue with Chase some time ago. I tried several times to change the number online, but it never took. I finally had to change it by speaking with a rep.

Unfortunately, you may not be able to avoid it. :push:
 

underwater_vallejo

LoanSafe Member
Feb 11, 2010
327
4
0
Vallejo, CA
As far as pets are concerned, we have 2 cats and we had no problems renting a house. Yes, there were many questions, and the initial credit check denied both my wife and I. Just keep the dialogue open with the landlords and tell them exactly what's going on. You are, in fact, a more savvy financial planner than most people because you know when to let go of an investment. It's the same thing they say in the stock market... Sometimes you just have to sell and take the loss rather than hold it hoping for it to come back up.

We had to pay extra deposit for the cats... That said, don't let this fear stop you from walking away if that seems like the right decision. STASH YOUR CASH and stay where you are as long as possible. Once the auction date nears, start looking for a rental... You'll find one if you can provide proof of income and a decent deposit.

Best of luck!
 

Pejutah

LoanSafe Member
Sep 18, 2011
322
5
18
Bay Area, California
Thanks Tom and Underwater,

Jeez...yeah.... I guess I'll be calling the bank to change that final phone number before the late hits later this month on the HELOC. Silly Wells Fargo...
Thanks Tom, for letting me know it might be a thing the banks have caught on to. I think it's weird, frankly.

Underwater, I SO appreciate hearing pets, albeit a bit extra in deposit, won't keep me from renting. In fact, I too may end up in the W.C. as it seem that there are houses in my price range to rent.... Keeping fingers crossed, but yeah, totally going to stay put by tooth and nail until the house goes up. Of course, I intend to look very intently at about month five, and if something looks good, at this point I'd rather have the place to live than the money.

Maybe it'll take over a year to get out of here, but I kinda doubt it.

Gotta say, I'm sort of tummy turned and sleepless waiting for the first two missed payments to pass me by. I'm sure EVERYONE feels this initially... Gotta be normal.
-Pej
 

Pejutah

LoanSafe Member
Sep 18, 2011
322
5
18
Bay Area, California
You know, I don't normally bother checking who has called me while I'm away at work, but today while trying to get my home phone and cell phone 'howdy' messages back to their automaton original voices to take mine OFF of them, I checked my 'missed calls' file on line.

WOH BABY! There must be 30 calls from various debt collector types on there. Very strange to me MAINLY because I have not even been officially 'late' yet. That hits this weekend. So, what gives? I'm wondering if the banks have noticed that hey, that person who oh so regularly gives us the loan payments on the 1st of the month has not done so as of yet, and hmmmmm....what COULD that mean....ponder ponder.

Went in and closed my checking acct. and credit card (had no balance) today with Wells, and true to TomEason's advice, finally had to go in PHYSICALLY to a bank to change the danged phone number to the google number. Oy. What a pain.

Also prepped. my secretaries for potential calls to work, and was happy that they all support me and 'get it'---a couple even saying a hearty 'stick it to da man' idiomatic hooray type of thing.

I feel like I'm lining up the ducks in a very efficient manner so far. Going to be interesting next week when BofA does not receive my payment for the first time like clockwork in six years.

Nervous about it, a little sleepless, really, but honestly, I totally feel it's the right move to make.

I'm wondering how long it'll be before someone from either bank (and I feel it'll be the heloc with wells that pesters more based on what I've read here...) and how long before my credit score tanks. But whatever....time to get this ball rollin'.
 

TomEason

LoanSafe Guide
Jun 18, 2009
12,390
85
48
SF Bay Area CA
Hi Pejutah

Thanks for your update. You've been getting a lot of the prep and precautionary work done, which is commendable.

Although I realize this is difficult for you emotionally right now, I can assure you that you'll get over the feeling, and may actually eventually feel liberated as a result of your chosen path. In fact, you might even experience a degree of spiteful joy, LOL.

Keep it up!