CA foreclosure help - 1st and 2nd with same lender

Submitted by Marsy from CA - 11/28/2009 - 5:32pm

Hi,
I have been unemployed for a year now and had been working with my lender for a modification since I was laid off and just kept getting the run around. I finally put my home on the market for a short sale and got several offers and presented an all cash offer to the lender. I have both a 1st and 2nd with same lender and both were purchase money loans. The lender is USBank and their HQ is not in CA. They did a BPO and have informed my realtor and I they will only accept the short sale if I agree to pay the difference (about $150K), which of course I cannot do. Some of the people have been nice and some just downright nasty. I have used up my bank to keep paying as long as possible in hopes of the bank helping me or getting a job. I was finally forced to stop paying both loans and am now behind about 1 1/2-2 mos. Because the bank would not accept the short sale (as it is "their policy"), the buyer walked away. I am dealing with collection calls every week, and it does not seem the 1st and 2nd loan departments are talking to each other. My standard reply is that it is in their hands, either short sale of foreclosure. I do not understand their logic as it seems to me a short sale would be less of a hit to the bank than a foreclosure. Some of the calls are threatening that the debt will follow me wherever I go. I understood CA law protected me once there was a foreclosure, is that true? The 2nd loan dept seems to be a bit more agressive with the letters, etc. and my question is: if the 2nd forecloses first, where does that leave the 1st, can it then come after me? Is there any other thing I can do to try to get them to accept the short sale. I realize I am taking a hit on my credit and want to minimize that as much as possible, just not sure what more I could do.

Sorry for the long story and thanks for any help
Marsy

You are not watching this post, click to start watching

Comments

Submitted by Michelle - 11/30/2009 - 4:12pm

This is one of the most frustrating aspects of the short sale process, the waiting and the lack of logic in the approval process. Oftentimes the 1st and the 2nd (even with the same lender) are usually two totally different departments. There are many questions that you would need to answer in terms of the best approach for you. For example, are these purchase money loans (are these the loans you got when you bought the property) or did you refinance and pull cash out? What type of loan do you have? Is it fixed, adjustable, option arm(high risk)? Are your loans Fannie Mae or Freddie Mac insured? The good news is that the government is putting more pressure on the lenders to approve modifications and short sales. The bad news is that things are not happening fast enough. You sound like you are doing everything right in trying to resolve the problem. Hopefully you are working with an agent that understands and has a good track record with short sales. The negotiation part is where you will really need their expertise. At the end of the day, keep good notes, continue to try to negotiate with your lender since things are changing every day. There are tax and legal consequences whether you do a short sale or a foreclosure. Although this is a very difficult time you are doing everything right by not ignoring the problem. You can always consult with a HUD approved counsellor for free by going to makinghomeaffordable.gov.
At the end of the day you have to keep in perspective what is most important and that is your mental health, physical health and your family.

Submitted by Marsy - 12/13/2009 - 10:45am

Hello,

Thanks for the response. The 2 loans are purchase money loans, no refi. The 1st is an adjustable with current interest rate minimum of 5.05. It now adjusts once a year. Second is an interest only, but I was paying additional towards principal when I was employed. I do not know if they are Fannie or Freddie insured. I have a great agent, but the bank was nasty to her also on several ocassions and will not approve the short sale unless I agree to pay the difference. I did consult with the local HUD agency and they recommended I file a complaint with my local assemblyman and with Obama. I also did go to the home site you mentioned. Bank did state they are "reviewing" that plan for me, but do not think it will work if I do not have a job and unemployment runs out because I cannot make the trial payments. I wonder if I should consult with an attorney at this point.

Thanks again,
Marsy

Submitted by bobinspira - 12/13/2009 - 9:35am

Marsy -

Sorry you are having such difficulty with US Bank. We just closed a short sale with them this past week - It appears they have a gap between upper management and the front line people. Also, it is common for the foreclosure department to continue moving forward regardless of what the loss mitigation department is doing.

Contact me if you would like me to review your situation - I have found a very helpful senior preson who resolved our situation quickly once she know exactly the situation.

BOB, MBA, CDPE, ePRO
bob@inspiragroup.com

Submitted by Marsy - 12/13/2009 - 10:46am

Hi Bob,
Are you a real estate agent or what is your position? What do you mean by "senior person"?

Thanks,
Marsy

Submitted by Marsy - 12/13/2009 - 10:48am

What are the pros/cons of a deed in lieu of foreclosure vs. foreclosure?

Thanks,
Marsy

Submitted by Jay S - 02/08/2010 - 4:36pm

Hi Marsy,

DId you get this taken care of? A deed in lieu or a foreclosure will both have a major effect on your credit score, about 250 points. A short sale will cause a drop of maybe 80 points.

We will make an immediate cash offer on your property and negotiate with the bank for you and make sure there are no deficiencies so you won't have collectors calling you after the transaction is done.

contact us at info@elite-propertysolutions.com

Post new comment

The content of this field is kept private and will not be shown publicly.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li> <dl> <dt> <dd>
  • Lines and paragraphs break automatically.

More information about formatting options

Before You Post

All comments should be relevant to the topic of the post and are subject to the terms found in our User Agreement.

Asking a Question

If you'd like to ask a new question, please start a new topic.

Please no SPAM.

We nofollow all links and promptly remove unsolicited advertisements - spamming here is a complete waste of your time, so don't bother. Vendors who actually answer questions and provide value to our forums may include links to their company or service as part of their signature.