Foreclosure, Short Sell, or . . ? Advice, hugs, and/or yelling needed

I’ve been holding on to my house by the tips of my toenails for several years. My partner, who brought $100k in a year, left me about four years ago and since then I’ve been paying a mortgage that is 57%+ of my monthly take-home salary.

I’m current on payments, but B of A just denied a re-fi for the second time in three years. The house needs an enormous amount of work, which I can’t even begin to afford. I’ve run through all of my savings in the last several years.

The central reason I hold onto this house is because I have four big dogs and a big backyard. I’m terrified that I wouldn’t be able to find a rental that would accept the beasts; also, New Jersey is a “recourse state” and BofA could come after me for the $.

How long do foreclosures take?

Do I just suck it up? Go see a real estate attorney? Trying to work with B of A is indescribably horrific, I don’t have it in me to devote much more time trying to convince them to help me. A realtor I chatted with told me to stop paying the mortgage, it’s the only way to get their attention.

Are you really the only name on the mortgage? That high a ratio sounds like there’s another signor? You probably do have to miss a few payments to get the attention of B of A. There are also organizations that can help: Making Home Affordable, or there are some links also on this HUD page. Many don’t know about the programs available now, some weren’t implemented until after Obama took office, so they haven’t been around all that long. I recently read an article about how helpful these can be, but I don’t recall where I read it. It was within the last month, though.

This is one of the most stressful things anyone can go through. I hope you’re able to find the help or relocation you need without too much more stress. It’s terrible.

ETA link for Federal Trade Commission, too.

I had a friend with a similar scenario, but she had bunch a of young adult kids hanging out in the house instead of dogs. In the end she had to sell the house and the kids went on their way. She recalibrated to a garden apartment this spring.

Not many rentals are going to let you have 4 large dogs. All you are doing right now is bleeding cash you will need later. You may need to make plans to give the dogs to friends etc.

She was told the following by banking insiders and it proved to be true for MD. No idea if this advice is valid or sound for NJ. They told her that the banks (Wells Fargo in her case) really don’t care at all about your pleas to refinance. They will not even think about redoing a mortgage until it is 90 days (or more) late. At that point or beyond the bank will get serious about negotiating new mortgage terms. If that cannot be worked out then the next step is a short sale or foreclosure. In the end she simply did not have the income to service even a modified interest note so they did a short sale.

The main point was that there will be no flexibility whatsoever as long as you are current on your mortgage. The banks only get flexible if it looks like the loan is on the edge of going down the drain. The bottom line is that you have to be a deadbeat to get a deal and even if you can get favorable terms the lates will hit your credit.

The offset is that tons of people are having credit issues so hits for late payments are not nearly the black marks they were before the housing crisis.

Re credit cards if you are late on your cards and are willing to endure some abuse on the front end the credit card companies will often settle for low interest terms or partial payments of the existing debts figuring something is better than nothing if you go belly up. As with the late house payments it will hit your credit and the cards have to be several months late before they are willing to do this.

It’s a gigantic PITA but there are solutions short of foreclosure.

I have nothing of fact to add to the advice above. All I can say is:

I let my home short sale earlier this year.

I am paying back some heavy duty debt which will take some time to do so.

My world did not end, and neither will yours.

Though your dogs mean much to you, you may have to find some new homes for them. Search and you will find kind souls who will look after them (Craigslist is a possible place to do so.)

You are not alone.

If all else fails, talk to a bankruptcy lawyer about your options. It may be possible to save the house, or discharge your obligation on the note.

How does your partner get off without having to pay part of the mortgage? Is it only your name on it?

Another option, if you absolutely want to keep the house, is to take in a renter.

Thanks, all, for your input.

After a sleepless night, I think my best course of action is to try and keep the house. I’d sleep in a tent under an overpass before I could give away my “girls” (the dogs). Two of them are 13 years-old and I want whatever time they have left to be peaceful.

I am going to make an appt with a RE attorney today and will get her opinions on the following, but I’m eager to hear what Dopers might think:

-Should I cease paying the mortgage in order to get B of A’s “real” attention? I’ve talked and talked to their re-fi peoples, been passed around from person to person, and I just don’t know what to do next.

-If B of A just won’t re-fi and instead begins foreclosure procedures, can I stop the foreclosure by paying the arrears? I would save every penny that would have gone toward the mortgage.

[QUOTE This is one of the most stressful things anyone can go through. I hope you’re able to find the help or relocation you need without too much more stress. It’s terrible.

ETA [link for Federal Trade Commission,]
( too.

Thank you, SeaDragon, I’m going to study these sites today.

[QUOTE=Re credit cards if you are late on your cards and are willing to endure some abuse on the front end the credit card companies will often settle for low interest terms or partial payments of the existing debts figuring something is better than nothing if you go belly up. As with the late house payments it will hit your credit and the cards have to be several months late before they are willing to do this.

It’s a gigantic PITA but there are solutions short of foreclosure.[/QUOTE]

Thanks, Astro. I have a very modest car payment and low credit card debt – my only other debt is stuff like utilities. I wouldn’t need to default on any of these creditors.

Since several posters have asked: yes, I’m the only one on the loan, ex-partner had hideous credit. I believe Countrywide had us fill out a form that named her as a roommate/renter who would contribute x amount of dollars toward the mortgage.

Well certainly seek the guidance of a professional, not us. What they may tell you is that you will likely have to stop paying your note for awhile in order to obtain attention and get the ball moving on changing your circumstance. What the banks think is: if you are paying your note on time, why would the bank wish to switch to a less profitable loan structure? So a bit of late paying is needed to show cause (usually).

But please act only on the advice of a real person (which I am sure you will.) I got bad advice early on my situation which is causing me some heartache now, but in the grand scheme of things I can deal with it.

You might qualify for a reverse mortgage. You have to be at least 62, own your home (a mortgage is OK), and want to stay in it for as long as possible.

Credit is not a factor, and a foreclosure, while inconvenient, will not prevent getting a reverse mortgage. Repairs might have to be done, but it can be taken out of the loan proceeds. An equity line of credit can also be arranged if the numbers line up just right.

I think reverse mortgages have gotten a bad rap. Everyone from my barber to my attorney advised me against it, but there are some situations where it seems ideal.

If you are interested, PM me and I can give you the name of an honest national loan officer who is the bestest person to have on your side and can tell you much more than I can.

I’m not sure about NJ, but in my state you get a notice of default (stating you’re not paying your mortgage) and then you get a notice of intent to accelerate, which calls in the entire loan balance as immediately due and payable. NJ has different laws though, as it is a judicial foreclosure state. The foreclosure could very easily take more than a year from start to finish. Quite possibly it could take longer if you’re applying for a loan mod. You would have a lot of time to find another place to live and if you’re good about saving your missed payments you could have 10-20 or more mortgage payments saved up. I don’t know where you are in Jersey or what your payment is, but that could be enough money to buy another home outright in another part of the country. If I had a clean start waiting for me in another state with no rent or mortgage I’d be tempted to take it.
Of course I am not a lawyer, and you should try to see a lawyer who is well versed in NJ foreclosure law to help you understand your liabilities so you put together an appropriate strategy to accomplish your goals.
If you want to save the place I hope you’re able to. If you can’t, I hope you get out as cleanly and in the best shape possible. Keep your head up, you’re not the first person who has been here and you certainly won’t be the last. Remember that it’s a business decision.

Well I think the thing is there are a number of programs that go something like “You can’t keep up with the mortgage but you almost can - let’s make a deal so you keep your home.”

Though in good times I would find such a concept unimaginable, I think that between government programs and banks realizing some income on a home beats no income on a home (in a crappy market) deals can be made.

Honestly by what information the OP has given I well imagine this may be her best choice, a loan modification which makes the home more affordable and keeps it occupied by a loving homeowner. The last thing a bank wants is another empty house on it’s books.

As always, speak with a professional, etc… I was given many chances in my situation a couple years ago (oh if I only knew what I know now) but I chose wrong.

I think Jennshark has a real chance to keep her home at a reduced mortgage.

Most of this advice is contrary to my experience. I have had banks that said they would refinance ONLY if your current mortgage is not late. I have had underwriters that said they would not even consider refinancing if your credit was poor, no matter how much equity you might have. I have had underwriters who insisted on a debt-to-income ratio that must be a certain minimum figure, and would not take into consideration past (good) credit history or copious equity.

It’s hard to get a deal with good credit. I can’t imagine how you could get any kind of deal at all with fair or poor credit.

It all makes me think that the banks really don’t want to loan money now, they just want to find an excuse not to.

An experienced, retired banker friend just told me that the reason the underwriters reject loan applicants so uniformly even though they work for different institutions is they all have to “pass” the federal HUD guidelines and they have absolutely no leeway in bending the rules for circumstances. If their auditors ever saw something like that in the file, they’d be in deep shit without a paddle. So they aren’t taking any chances.

The Making Home Affordable program has started HARP 2.0 This program is much broader than the original HARP program but only a handful of banks that I contacted actually will refinance under HARP 2.0 unless you currently have your mortgage through them.

One requirement is that your loan must be owned by Fannie or Freddie. You can use the links provided to see if either one owns your loan (often the banks do not tell you that they sold your loan). I think you also need to be current on the mortgage payments so it would benefit you, if you qualify for HARP 2.0, to keep current on your mortgage. You can refinance using this program even if you owe more than the house is worth.

If you do qualify you can also roll all of the closing costs into the loan. That really helps if you don’t have thousands of dollars to plunk down at closing.

I have only found two banks willing to refinance using HARP 2.0. Wells Fargo and Quicken loans. Contact both of them ASAP if your loan is owned by Fannie or Freddie.

ETA: Good luck and I wish you the best of luck in keeping your home.

Can you find a friend or someone to rent a room from you? Even if you charged reduced rate rents – it might be just enough extra income to help keep you afloat.

Also, is a second job a possibility? Do you have some sort of skill or craft that you could do on evenings and weekends that people will pay for? Can you sell something (some crafty thing, canned goods, seamstress services, editing services, resume helper, baked goods…)?

I was simply thinking of taking a different approach to this: if you can’t change or reduce what’s going out, maybe you can increase what’s coming in via multiple streams of revenue.

Thumbs up!

I was also wondering if you’ve ruled out getting a roommate. Perhaps someone else with a dog or pet who is having trouble finding a rental. It might mean that some of these dogs have to be crated during the day but it would keep the family together.

Also do you have a garage? You could rent that out for a few extra dollars a month.

Good one! Storage space is extremely expensive to rent. Call around the storage units in your area and find out what they charge. Clean out a closet, the attic/basement/garage/whathaveyou and place an ad for storage space at just a smidge less expensive than the local units. Onsite 24/7 guard dogs = value added. :wink:

There’s also pet sitting/dog walking seeing as how you are obviously a dog person – just another suggestion for another way to make money.

Oh, and while you are cleaning out your closets to rent out storage space, take a bunch of clothes over to a consignment shop. Why give stuff away when you might be able to sell it? Which brings us to a garage sale: what else do you have that someone might actually pay for (that you’d otherwise just toss out)?