Facing Foreclosure With Chase

January 2nd, 2008 • Related • Filed Under

First let me thank Moe for this site, it is great! Where do I begin? Embarrassment

In June of 05 we bought our second home. We did a 2/28 with a starting rate of 8.5. Not a great rate but it worked. Our payment was $2400 which quickly went up to $2650 because of taxes. All of this was fine but over the last year my husbands income has gone down. Same job just down in sales commissions. He is down apx $30,000 for the year. (15k last year) Knowing his income was down we tried to refi in October 06. It didn’t make sense at the time we had a $15000 prepay. Knowing the arm would reset in June we started the refi process again in May allowing plenty of time to get it done and close after the prepay penalty.

To get into a better loan we were advised to pay down our debt which we did. This took some time but the ficos went over 700 and now we could get out of our evil loan…Until….the bottom dropped out of the market and our house would no longer appraise with enough equity!

Currently we are about $100,000 in negative equity. AND I put 15% down on the house!

We are working with chase. The first mod they sent was ridiculous and full of errors. Same story as what I see from others… they tell me I can’t pay during the mod process. December 1 will be 3 months of no payment and no mod yet from Chase. They are still working it…

So to sum it up IF they give me a mod I am looking at

8.5 % interest apx $2700 a month on a house that is $100000 upside down. They have destroyed my credit now at 540 fico so even if the market does turn around in the next few years, I won’t be able to refi into a good loan and interest rate. and what are the chances it will recover in value? Honestly the payment is too high with my husbands drop in commission!

Here is the bright side… I have a rental lined up for $1100 less than the current mortgage payment. Beautiful house brand new never lived in. It is better than I could buy for myself. AND the owner owns the house outright so I know there is very little risk of them losing the house and kicking us out!

I have 2 boys that I need to look out for. the emotional drain this has gotten to the point that I needed to take control and not let the debt collector bank control me. Did I make the right decision? Suze Orman said your house is not a hole. That is where I am at, I am paying into a hole if I stay.

As of today Chase has yet to give me their mod. They did call and leave a msg. but did not return our call back to them. Would a debt collector really call with good news? Probably not. I am ready to be done just having doubts. I have put hours and hours into this… I have learned so much about the evil mortgage industry and brokers. Amazing they are getting away with this! Confused

There Are 9 Responses So Far. »

Comment by PHXrenter on 9 February 2008:

Based on the info in your post – you were way in over your head the minute you signed your loan papers. Frankly anyone who signed a toxic loan deserves what they get – including the damaged FICO. You signed a CONTRACT. It’s your fault you listened to a 6%er and bought over your head to begin with. Perhaps if you had looked into a rental back then, you’d be a lot better off right now and could actually afford a house. I don’t feel sorry for you one bit.
Comment by sandtmc on 15 November 2008:

Dear PHXrenter:
Clearly, you are a perfect person who has never made a mistake in your life. Wow! That must be great to be so perfect in that you feel that you can judge people as you are so above it all. Have you never made a mistake? Do you not have a heart? Times are tough, and yes, it was not the best business decision, however people DO make mistakes and learn from them. I pity you – you are heartless.
Comment by Mitigator on 15 November 2008:

PHXrenter,
The key to good terms in a loan modification is supply the correct information on the application. The fact that you are upside down on your mortgage makes it more attractive for the lender to keep you in your home and paying -they lose more if you sell or they foreclose.

Be upfront about your expenses and income. Let the negotiator understand your circumstances. I know the process is painful and long but you don’t want a bandage you want HELP.

Let me know if I can help
Comment by tmm on 18 December 2008:

Wow PHXrenter I am really surprised by your comments. I myself will be facing foreclosure here very shortly. I feel for this lady. Mine has nothing to do with mismanaging simply job layoff and economy. Hubby works for GM and they moved us all over the nation. You want to keep working for them you move where they tell you. If I had a Crystal Ball and could have forseen the future we would have taken the layoff package in 2005 and been free. But hubbies dream since age 16 was to work for GM. So we moved where they told us to the high taxed state of PA. Of course in 2005 we bought the same type of home we had in MD. The payment in MD was 1198 and the house payment in PA 1178. So we made out on the payment until tax increase came. Now we pay 751 a month in just property taxes. So our payment is 1951 a month. So when hubby is laid off from GM around March 09, I can’t afford the payment on my income nor will I even attempt to make it. Instead we have a contingency plan with the home we own in NC that there is a zero house payment and 363 a year in property tax. He will collect unemploy as we make the move there and though this house is up for sale and has been for over 6 mths if it doesn’t sell, I foreclose. I would be an idiot to not have food on the table and live in a home with no water, gas or electric simply to not foreclose when I have a paid for home in NC that on my income and his unemploy I can very very comfortably live. We don’t want to be in PA. Never did. Only here cuz of his company and their promises of course no job is secure but you think with all his nagging of them they could have moved us to NC where we wanted to be in the first place and could survive on our incomes. Then when he was laid off, no biggy. He finds something else. But he surely is going to look for something else in PA when we don’t want to be here in the first place. I will foreclose and if it ruins our credit for a time, who cares. We still have a roof over our heads and food and clothes and all we need. And under FHA you can buy another home with foreclose in 3yrs. And I guarantee when we foreclose so will about 3 million other people. Cuz they will be laid off from the auto industry as well. So PHXrenter are you going to chastize all of them as well with your holier than thou perfectionism?
Comment by tmm on 18 December 2008:

I meant he is not going to look in PA. Type faster than brain moves.
Comment by drabarnett on 13 January 2009:

Can anyone tell me what happens after someone has completed the Forclosure process. I have heard about the months of threats from the banks and then going to auction by the sheriffs and then the sheriffs evicting you form your house. But what happens after that?
Does the bank continue to try to sue you?
Is a bankruptcy required to protect you from the bank?
(I already know bankruptcy doesn’t protect you from the bank–I already tried that one.)

I just want to know the rest of the story.
What happens after the auction and the eviction?

Do they try to take everything you own or make you auction off everything in the garage?

Do they try to sue you for the amount they lost?
Comment by Nica on 13 January 2009:

Check out the IRS website http://www.irs.gov/irs/article/0,,id=179073,00.html
At the end of the year you will receive a 1099. The website should be able to answer some of your questions. After the house is foreclosed the deed will pass on to the bank. The bank will list the house for sale and convey the deed to the new buyer. I believe you can exclude your primary home in a bankruptcy. You should remove all your personal property before they foreclose. Hope this helps.

Nica Caoile, RS
Comment by inotio on 14 January 2009:

Labor intensive solutions to the foreclosure mess won’t work. “Loan counselors” are just newly hired clerical that have to wade through individual circumstances and each file is unique.
The ONLY solution that will work nationally is to have a National solution. Presidential Executive Order to reset interest rates at 1% immediately for ALL mortgages and trust deeds.
Investors wouldn’t have to take a “cram down”. It would be fair as struggling property owners would be treated the same as defaulting property owners.
This National Solution would be limited (between 3-5 years at interest only payments).
Foreclosures would stop immediately as it would be cheaper to stay than move/rent.
NO labor intensive solution can work. The problem is too big. Needs to be fixed with a stroke of the pen by our new President.
Overnight solution. inotio
Comment by inotio on 14 January 2009:

The President needs to sign Executive Order to make “debt relief” under IRS obsolete and invalid. Too many people will lose their homes/and investment properties only to face IRS debt relief and the taxes it triggers.
Our new President needs to act on this NOW.
Inotio