??'s about foreclosure and what would you do?

Old 04-05-2007, 10:57 AM
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??'s about foreclosure and what would you do?

Because I'm such a codie, I am looking for approval


Okay, I posted yesterday about my housing situation and how we were forced into an escrow account and our mortgage payments went from 1500 to 3400 starting in May, and we decided not to pay that and put the house up for sale or foreclose on it. We are meeting with the relator tonight and putting the house up for sale, because there are delinquent payments from when my AH was out of work we believe they will probably speed up the foreclosure process (this is something I know NOTHING about so if anyone knows anything about foreclosures please fill me in). The realator thinks we will probably sell, but it may take awhile because of the economy in Michigan houses are not really selling, so he was saying we may have to do a short sale on the house, so there is not a foreclosure on AH record, which AH credit is screwed anyway so he could care less. I am not on the mortgage at all, he purchased this house 3 years ago when we were seperated (thank God I didn't put my name on it....)
Anyway, we have a payment of 2,000 due tomorrow....next payment is 3400 in May which we do not plan on paying because it is ridicolus, I am not working just to pay a mortgage payment
So my question to you is.....

Would you pay 2000 tomorrow knowing full well you are going to default next month, so the money will mean nothing anyway and put it toward the down payment on another house, or would you pay it to give yourself and extra month and then let it default?? I really don't know how long this takes, if they foreclose and we are out of there in 30 days, or if we are going to sell it before it forecloses, or how long we have after it forecloses to move... We have already been house hunting with the realator...

I am really struggling with this, we could really use the money this month, but it feels really sneaky and wrong.......but I guess it's sneaky and wrong to double someones mortgage payment with 1 months notice too.....

Let me know what you think!!!

Thanks
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Old 04-05-2007, 11:31 AM
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Not knowing where you stand with the bank but knowing that banks don't like to forclose...they have enough of them already. Talking things over with the bank can help some times. I think it takes about 3 months of not paying before they forclose.

www.crown.org is a good place to get financial info from.
Giving them a call may be a good idea.
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Old 04-05-2007, 11:59 AM
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Foreclosure times vary by State and the laws.
The bank does the foreclosure action and at the end of the action you are no longer in the house. There is no discussion.

If you go to foreclosure, how are you going to get another house? Your name only? who will have the credit? Can you get a fixed rate Mortgage (fannie mae etc.) ?

Google "foreclsure in MI" and see what you learn.

It sounds like you have a variable rate mortgage.. and with a mortgage company and not a bank. If you read your contract, missed payments mean an increase in interest and it can be high (as you have found out).

No matter what you decide this money is owed. If you sell the house you are in, the money owed will come out of the sale (taxes, mortgage, $10,000 loan etc.). If the house is not worth what you owe, the bank may put a lien on anything else you own and you may have to sell those things or have them seized, to satisfy the loan. If you buy another house, this could mean the new house could have a lien placed on if from the old house (tho in NY the old lien would likely mean you would not ahve credit for a new house). If you are married, they may be able to come after you as the spouse.

I don't know the particulars (numbers) and I don't know MI law but I do know that mortgage companies have had some issues of late.

LEARN YOUR RIGHTS. Get some legal knowledge sooner rather than later.
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Old 04-05-2007, 12:01 PM
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Frog...

I've been in your shoes, girl.

My advice...contact the loss mitigation dept of your mortgage lender and tell them that you cannot pay the increased payment. Tell them you are listing the house. If you want to keep it, they will work with you and if you don't want to keep it, you can almost always sign the deed over to the bank in lieu of foreclosure. Its a hit on your AH's credit but not anything as bad as an actual foreclosure. Banks are usually willing to do this because they don't have to go thru the costly and lengthy process of foreclosure.

What you do next depends, in large part, upon how much equity you have in your home. You won't want to do a deed in lieu if you have equity...but if you don't have any equity...and if you're looking at selling it for less than you owe than a deed in lieu will prevent the bank from coming after you for any shortage on the sale price. (a short sale will do the same thing).

Its always best to contact the loss mitigation dept before doing anything drastic. Find out what your options are before diving into a foreclosure situation. EVen if your AH doesn't care at this point...he might somewhere down the road.

Whatever you do...good luck...
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Old 04-05-2007, 12:17 PM
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Thanks for all of the information.....

I will look into everyones suggestions...

Outonalimb...I was hoping you would come along and reply, because I knew you were in a similar situation before, and I know you live in Michigan..
Hope all is well with you!

Thanks
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Old 04-05-2007, 05:48 PM
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The full process of forclosure will take about 90 days, so, if you pay the $2,000 or even $1,000 you will delay the process by 30 days....the mortgage company does not really want the house, they are not in the business of selling forclosures, that is not their bread and butter. I'd do as Out advised...and then no matter what, I would pay them at least a 1,000, toot sweet. It shows intent.

If you default, you will have a big problem fianacing another place. Even owners of rental property do credit and background checks and there is a certain credit score that they have established to approve your moving into their complex. And all adults who will be renting must comply to the criteria.
To buy a home, you will not only have to prove that your income can support the loan but that you are credit worthy.

Have you checked out filing bankruptcy, in most states you can keep your home and one car.
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Old 04-05-2007, 07:16 PM
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What everyone says is true regarding avoiding foreclosure. Banks want the money, not the house.

However, you cannot stall them forever. I went close to this dairy farming. If they believe you will NOT pay, then they will get those wheels right out and rolling...

I found this out back in oh.. 1986...
Kept my credit and they did not foreclose.. it got a bit touch and go between the mortgage and the feed bill. Ultimately the mortgaged farm sold and I rented it back for an annual rent that was what a month of mortgage had cost me. Sweet!

BTW just because the bank WILL loan you the money does not mean you can PAY the payment. I have had some bad advice from the bank on how much they will lend.

Be careful. Follow the advice here. Others have more experience than I.
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