Need Help - Debt Relief Mortgage Act

puppyted

LoanSafe Member
Mar 31, 2011
137
0
16
We have an ARM that will reset in May 2012. We were planning on continuing to make the lowest payment on our loan until then, and then stopping our payments when the loan reset. We have to be able to use the Debt Relief Mortgage Act to avoid a bill with the IRS. The best we can tell our home is upside down about $250,000.00. We have the first, and a small second, with IndyMac. The second was used for home improvements.

I was just informed by someone today that we need to begin our foreclosure NOW, because it has to be fully completed by Dec. 31, 2012 (when the Debt Relief Mortgage Act was extended to).

Needless to say, I am having a panic attack at the moment. We thought we just had to get the foreclosure process STARTED before that date, not COMPLETELY FINISHED. Now, we're worried that 19 months won't be enough time for IndyMac to get it completed.

Any advice, help, comfort, would be appreciated.
Thank You.
 

SurfwhenUcan

LoanSafe Member
Apr 23, 2010
1,766
11
0
Sunny San Diego
We have an ARM that will reset in May 2012. We were planning on continuing to make the lowest payment on our loan until then, and then stopping our payments when the loan reset. We have to be able to use the Debt Relief Mortgage Act to avoid a bill with the IRS. The best we can tell our home is upside down about $250,000.00. We have the first, and a small second, with IndyMac. The second was used for home improvements.

I was just informed by someone today that we need to begin our foreclosure NOW, because it has to be fully completed by Dec. 31, 2012 (when the Debt Relief Mortgage Act was extended to).

Needless to say, I am having a panic attack at the moment. We thought we just had to get the foreclosure process STARTED before that date, not COMPLETELY FINISHED. Now, we're worried that 19 months won't be enough time for IndyMac to get it completed.

Any advice, help, comfort, would be appreciated.
Thank You.
Who informed you of that?

No one has a crystal ball, but it's possible that there will be an extension (a good possibility since this crisis will be far from over then).

I think there is a tiny flaw in your plan. The flaw is that you plan on paying anything at all...ever, from this day forward. If you are accepting of the fact your home will go away, visit tomeason's thread The HAMPster Wheel Game. I think it will make a lot of sense to you.
 

puppyted

LoanSafe Member
Mar 31, 2011
137
0
16
Who informed you of that?

No one has a crystal ball, but it's possible that there will be an extension (a good possibility since this crisis will be far from over then).

I think there is a tiny flaw in your plan. The flaw is that you plan on paying anything at all...ever, from this day forward. If you are accepting of the fact your home will go away, visit tomeason's thread The HAMPster Wheel Game. I think it will make a lot of sense to you.
Had a consultation with a foreclosure assistance service, "You Walk Away". The consultation was free. Of course, if we decide to use their service, it will not be free. But, neither will be the hourly rate for talking to a real estate attorney. They told me that any foreclosure must be completed in full by Dec. 31st, 2012, to take advantage of the Debit Relief Mortgage Act.

You're right about the "crystal ball", and that there could be an extension. But we just can't afford to gamble on that, when we are looking at possibly owing taxes on a $250,000.00 "gain" that the IRS thinks they can tax us on.

Would love to hear from anyone who has been dealing with IndyMac. Lives in Southern California. What time frame have you been experiencing.

Thank You.
 

TomEason

LoanSafe Guide
Jun 18, 2009
12,390
85
48
SF Bay Area CA
Had a consultation with a foreclosure assistance service, "You Walk Away". The consultation was free. Of course, if we decide to use their service, it will not be free. But, neither will be the hourly rate for talking to a real estate attorney. They told me that any foreclosure must be completed in full by Dec. 31st, 2012, to take advantage of the Debit Relief Mortgage Act.

You're right about the "crystal ball", and that there could be an extension. But we just can't afford to gamble on that, when we are looking at possibly owing taxes on a $250,000.00 "gain" that the IRS thinks they can tax us on.

Would love to hear from anyone who has been dealing with IndyMac. Lives in Southern California. What time frame have you been experiencing.

Thank You.
puppyted
I agree with Surf's post. If you are in fact concerned the Act won't be extended, then you better get busy with the foreclosure. To start, please stop making payments on your 1st. No more payments, ever. Many loan servicers are not moving very fast on the FC process so you need to do everything in your power to help move the process along. You might try pissing-off a rep every time you talk to the loan servicer. Act like an a-hole, treat everyone like dirt, and mock and abuse them when they offer advice and suggestions. By so doing, they may go out of their way to send your file to the foreclosure department sooner than normal. Good luck; try to have some fun with this!
 

puppyted

LoanSafe Member
Mar 31, 2011
137
0
16
puppyted
I agree with Surf's post. If you are in fact concerned the Act won't be extended, then you better get busy with the foreclosure. To start, please stop making payments on your 1st. No more payments, ever. Many loan servicers are not moving very fast on the FC process so you need to do everything in your power to help move the process along. You might try pissing-off a rep every time you talk to the loan servicer. Act like an a-hole, treat everyone like dirt, and mock and abuse them when they offer advice and suggestions. By so doing, they may go out of their way to send your file to the foreclosure department sooner than normal. Good luck; try to have some fun with this!
Thank You. I noticed you said to stop making payments on the 1st. Does that mean I should keep up the payments on the 2nd?
 

TomEason

LoanSafe Guide
Jun 18, 2009
12,390
85
48
SF Bay Area CA
Thank You. I noticed you said to stop making payments on the 1st. Does that mean I should keep up the payments on the 2nd?
puppyted
No, of course not. The 2nd never rarely gets paid, even if the homeowner is keeping the property. Since you want to your 1st to FC, money paid on the 2nd would be $$ thrown down a rat hole.
 

Francie

LoanSafe Member
Mar 13, 2011
174
0
0
Somewhere, Florida
I agree with the comments above re: start asap. While it is possible there may be an extension, as surf said, no one has a crystal ball. Plan and act for what IS. ANd, that is a deadline 19 months away. Given that the average foreclosure takes almost that long, it's time to start the process. BTW, you might as around in your area how long the process has been averaging. Even if you get it done by the middle of next year and have to rent 6 months sooner than planned, how much is that compared to the tax on $200,000.? Not worth the chance: there's the answer. And, you'll save that much more money.
 

NegativeValue

LoanSafe Member
Mar 12, 2011
74
1
8
We have an ARM that will reset in May 2012. We were planning on continuing to make the lowest payment on our loan until then, and then stopping our payments when the loan reset. We have to be able to use the Debt Relief Mortgage Act to avoid a bill with the IRS. The best we can tell our home is upside down about $250,000.00. We have the first, and a small second, with IndyMac. The second was used for home improvements.

I was just informed by someone today that we need to begin our foreclosure NOW, because it has to be fully completed by Dec. 31, 2012 (when the Debt Relief Mortgage Act was extended to).

Needless to say, I am having a panic attack at the moment. We thought we just had to get the foreclosure process STARTED before that date, not COMPLETELY FINISHED. Now, we're worried that 19 months won't be enough time for IndyMac to get it completed.

Any advice, help, comfort, would be appreciated.
Thank You.
Hello puppyted

I agree with most of the comments below and if you want to take advantage of the Mortgage Debt Relief Act before it ends on 12/31/12 you might want to start the Foreclosure process now. Here is a Foreclosures: Listings, Bank Owned Homes, and Short Sales | ForeclosureRadar

Just type in your zip code and it will give you an idea of how long before your home forecloses. Don't rely on hope that this Act will be extended. It's like relying on hope that you would win the lotto.

Good Luck.