Walking Away in the IE

FeelingFree

LoanSafe Member
Mar 25, 2011
70
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CA
Hello All,

I have been a member for several years however posted under another name so long ago I couldn't remember the name so I created a new profile.

I was hoping to contribute my walk away story to the boards in the hopes I might help those also going through this process and share experiences. Now that a walk away is for sure and I only intend to delay as long as I can, here is the story.

Location: Temecula Valley, SoCal
Lender: Indymac/OWB
2nd: B of A
Value: 300k Negative Equity

Already modified once, in-house with original lender. Our original lender was seized by the FDIC and assets given to Indymac/OWB. Our original loan modification (interest deduction only for 3 years) was up and Indymac/OWB had no interest in assisting.

After several months of trying to decide what to do and considering all options, our walk away began 8 months ago. With no hope of a housing turnaround and while being devastatingly underwater, the only out for us is a principle reduction(not going to happen) or just giving the house back.

Considering everything we were facing, we started the process by filing a Chapter 7 and eliminating all our debt and responsibility to the mortgage. No deficiency worries, no tax consequences, no lender lying in wait etc. No collection company BS.....nada.

We only stopped paying the mortgage after we were 3 months into the chapter 7 so never had any collection calls etc. After several months, Indymac filed for relief of stay in the chapter 7. BK Judge denied their motion stating they did not prove they owned the mortgage. (Interesting)

Chapter 7 discharged and closed in February 2011, still not a word from Indymac.
Finally last week Indymac sent certified mail advising pay 20k now or Intent to Accelerate would follow. Not paying..... so now we wait for their next move.

We intend to continue to play the game with Indymac and see how long this process takes so I will update as things progress. We may apply fo a mod, HAMP, anything to delay etc.

For the thousands of people out there facing the same situation believe me when I tell you we have been there and felt the same you do; however we now look at this for what it is...a business decision.

This was my families first home and all the emotion that goes into the process of building a home to bring your children home to from the hospital and then losing it to foreclosure is devastating; however, we will all get through it a little wiser but all the better.

Updates to follow.

Good Luck to everyone in this process!
FF
 

Angels

LoanSafe Member
Sep 28, 2009
428
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Thanks for the update. I expect that your decision to file chap 7 before dealing with the banks run around will prove to be beneficial. From the many posts on this site people are drug along for long periods of time only to find out they are no better off (and probably worse off) then they were at the start of the process. At least this way your life begins and you can move forward.
 

fighton

LoanSafe Member
Dec 10, 2010
87
0
0
Thanks for sharing, I am in the same boat in IE. Right now on the Hamp Wheel. Keep us posted Goodluck and God Bless!
 

FeelingFree

LoanSafe Member
Mar 25, 2011
70
0
0
CA
Thanks for the update. I expect that your decision to file chap 7 before dealing with the banks run around will prove to be beneficial. From the many posts on this site people are drug along for long periods of time only to find out they are no better off (and probably worse off) then they were at the start of the process. At least this way your life begins and you can move forward.

Thanks for the reply. Yes, we were dealing with so much stress reference the "what if" factor and then our total debt load was so high even without the house that it seemed even a modified payment probably would not have helped us anyway.

Qualifying for the chapter 7 and getting through that process took just about all of last year, ....very, very stressful however so worth it in the end. Our 2nd was completely unsecured and a recourse loan as well so that would have remained over our heads.

Now we are in the driver's seat. If they want to negotiate with us or we with them it is our decision what to do and they have no recourse but to complete the foreclosure. We have already cut all ties emotionally with the house so if they want it...come and get it.

We shall see what happens from here.

FF
 

FeelingFree

LoanSafe Member
Mar 25, 2011
70
0
0
CA
Thanks for sharing, I am in the same boat in IE. Right now on the Hamp Wheel. Keep us posted Goodluck and God Bless!

Thank You so much! Keep me posted on your HAMP progress as well. I don't think we would pass the NPV test but I dont know yet anyway.

FF
 

CAFrustrated

LoanSafe Member
Apr 17, 2010
6
0
0
Thanks for sharing! We are in the same position as you. We stopped paying our mortgage Jan 2010 and received our notice of intent to foreclose last Monday and on Tuesday we received a trial modification (Hamp). We have Chase mortgage, our current loan is 650,000 and house is worth 450,000. We had an interest only. The new trial modification is at a fixed rate but at a monthly payment we can not afford. It is $700 more than what we've been paying for the last 10 years. Our income has gone down substantially in the last two years and we have also had to file Chapter 7. We have been trying to get a modification since April of 2009, btw we were turned down once also!! We had to file Chapt 7, have a vehicle repossessed, and live a 1 1/2 years in turmoil just to get the bank to offer us a really bad modification. So after we got the trial mod in the mail we have to pay the high monthy mortgage for three months and then they will see if we still qualify for a permanent modification at the fixed rate. So we have no guarantees after we give them half our savings for three months. One day they say they don't need paperwork, then the next day we get a letter stating they need more paperwork to qualify for a trial. Not kidding this all after we got our trial mod paperwork. So after much thought we are going to go into foreclosure and start completely over. We are so done!!
 

FeelingFree

LoanSafe Member
Mar 25, 2011
70
0
0
CA
Thanks for sharing! We are in the same position as you. We stopped paying our mortgage Jan 2010 and received our notice of intent to foreclose last Monday and on Tuesday we received a trial modification (Hamp). We have Chase mortgage, our current loan is 650,000 and house is worth 450,000. We had an interest only. The new trial modification is at a fixed rate but at a monthly payment we can not afford. It is $700 more than what we've been paying for the last 10 years. Our income has gone down substantially in the last two years and we have also had to file Chapter 7. We have been trying to get a modification since April of 2009, btw we were turned down once also!! We had to file Chapt 7, have a vehicle repossessed, and live a 1 1/2 years in turmoil just to get the bank to offer us a really bad modification. So after we got the trial mod in the mail we have to pay the high monthy mortgage for three months and then they will see if we still qualify for a permanent modification at the fixed rate. So we have no guarantees after we give them half our savings for three months. One day they say they don't need paperwork, then the next day we get a letter stating they need more paperwork to qualify for a trial. Not kidding this all after we got our trial mod paperwork. So after much thought we are going to go into foreclosure and start completely over. We are so done!!

WOW!,

This sounds exactly like us. Even our numbers are close except we owe 650k and our house is worth about 280K with four houses on our block currently waiting to be auctioned. I'm pretty sure I'm just done with this mess.

I think renting and coming back into the market in three years financially healthy is a much better option than fighting to keep a tax write off on an underwater property I already discharged in Chapter 7! We are still looking at how much we are going to owe in income tax next year with the loss of the house write off but it really doesn't matter....we aren't paying it anyway. Everyone we talk too including my CPA says drop it and start over.


Keep us posted!

FF
 

FeelingFree

LoanSafe Member
Mar 25, 2011
70
0
0
CA
Just received two more attempt to serve certified mail in regards to our NOI.

Shucks...weren't home again!

FF
 

FeelingFree

LoanSafe Member
Mar 25, 2011
70
0
0
CA
Time to update.

After now 9 months of no payments and numerous attempts by Indymac to serve a notice of intent to accelerate I decided to apply for HAMP on Indymac's website. I sent in the application but left off the financial information intentionally. I then received a letter from indymac letting me know they received the application and they have given me until May 4th to forward my financials to continue processing.

This move has bought me another 30 days as they indicated they would not move forward with FC until I am denied HAMP. After considering all our options it's probably worth at least trying for a mod so we will know for sure if there is any way we could stay before just leaving.

I think I might go ahead with a REST Report after we are denied just to see our options clearly. Should know in about 30 days.

I'll keep everyone updated on the progress.

FF




)
 

Cat Damiano

Mortgage Wars
Sep 10, 2007
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Colorado
www.loansafe.org
FeelingFree,


Thank you for keeping your thread updated on your experience. It helps other members going through the same ordeal. I hope yours all works out for the best.
 

Screwed11

LoanSafe Member
Feb 7, 2011
232
1
0
I have a question -- if they cannot prove that they own the mortgage, then can they really foreclose on you? I'm confused... !
 

FeelingFree

LoanSafe Member
Mar 25, 2011
70
0
0
CA
I have a question -- if they cannot prove that they own the mortgage, then can they really foreclose on you? I'm confused... !
This was an interesting and unexpected twist to our BK 7. Indymac hired a law firm to represent their interests in the chapter 7 case and the law firm was unable to convince the BK judge Indymac had ownership of the loan.

My original lender was closed down by the FDIC and my mortgage was given to Indymac to service. It is very rare a motion to lift stay is not granted so this outcome has me wondering what my loan documents really look like as well.

In then end I am sure it was just incompetence on the part of Indymac's chosen law firm; however, if need be I will chase this down to see if it can help in our case.

FF
 

Cat Damiano

Mortgage Wars
Sep 10, 2007
10,541
39
48
Colorado
www.loansafe.org
Thank you, it is great to be back!
 

FeelingFree

LoanSafe Member
Mar 25, 2011
70
0
0
CA
After the good folks over at the Rest Report ran the numbers for me it has become pretty clear a walk away is the only viable outcome I can see in the whole mess. A mod is probably possible but just not under terms I could accept.

I refuse to give the bank nearly 50% of my gross take-home pay just to stay in a house that is 300k upside down. That's no life and I refuse to be held hostage by some 2 x4's and stucco with air conditioning! This doenst include the 25k in neded repairs and upgrades the house needs. I am still sending in the mod paperwok to continue on the Hampster wheel and see just how long this foreclosure takes.

FF
 

fighton

LoanSafe Member
Dec 10, 2010
87
0
0
Thanks for the update. Save all your money on free rent. Just make sure they foreclose before 2012 ends to take advantage of the tax reliefs. These big banks all knew about these high risk loans and also knew that they had enough power in congress to bail them out using our taxes. It was a win win situation for the banks and we are stuck with the loss.
 

troubleinriverside

LoanSafe Member
Nov 30, 2008
773
18
18
yeah. i hear it's tough down south, just like it is here. What year did you buy that house and for how much ?? $-300K is a lot to make up, and wont be made up until the banks figure out how to make this all happen again.
 

DesertMe

LoanSafe Member
Oct 27, 2009
278
1
0
Hysteria (High Desert), CA
It's not any better up here in the High Desert part of the "I.E."...Parts of Hesperia and Victorville look like veritable wastelands. Abandoned tracts, every third house either abandoned or in foreclosure, everything turning in to Section 8 or rentals accompanied by the usual tattooed, bald headed pit bull toting "family members"..Straight out of South Gate..And gee, we keep hearing how the market is going to "turn around any day now"..Meanwhile the local paper has more foreclosure notices in it than ads for used cars. Glad mine is done and over with.
 

FeelingFree

LoanSafe Member
Mar 25, 2011
70
0
0
CA
yeah. i hear it's tough down south, just like it is here. What year did you buy that house and for how much ?? $-300K is a lot to make up, and wont be made up until the banks figure out how to make this all happen again.

Well, double whammy for me. I was refied in late 2004 when we had insanely inflated equity of $650,000. I had a comfortable mortgage of $388,000 at the time. Enter the shady scam artist that refied my home, removed all the equity, "invested" it for me in their winery scam and then 4 years later when the note was due to be paid back to me.....he and his partner were gone. (With 2.5 million of others equity money as well)

Long story....lots of lawsuits, court time, BKs, challenges etc. We lost everything we had. After all that, I am in the final chapter of my poor decision making by watching my house foreclose.

Now onto rebuilding....much.... much... wiser now.

FF