First, some good news. From what you’ve said, they haven’t yet served you with foreclosure papers. That’s very good, and in many places the foreclosure laws are deliberately written to slow down the eviction clock and give the parties time to negotiate and reach a settlement. In WI, even once a foreclosure case is decided against you, you have another 6 months before someone can show up and kick you to the street.
The bad news is that there is nothing you can really do to stop them, unless they have no interest in acquiring the property and reselling it. All the power is in there hands and you just have to hope they’re in the right mood.
I was lucky. I got a job the very same week I was served foreclosure papers, and at the time there were so many foreclosures that the bank was happy to offer a deal that would get them a stream of cash coming in instead of another empty property to maintain and try to sell.
What all the other said, get some competent legal advice immediately. If there is a state school that has a law school attached, try there. UW Madison Law School ran a foreclosure assistance program that was extremely helpful to me.
Let me offer an alternative thought:
Much like it sounds you are, I was left in a financial lurch by an unexpected break-up (didn’t see it coming, huge mortgage payment that had depended on two working folks).
I went from credit counselor to government re-fi programs (which I’m convinced nobody actually gets), to bank officer to attorney, and through all that stupid crap from a “collecting agency” that bought/“serviced” my B of A loan and wouldn’t accept anything less than a full back-pay. (Really? You’d rather lose someone who had been a good payer for years than give them a break? Mortgage companies make minus profits when a foreclosed house just sits there, and sits there, and sits there . . . )
I finally just let the house go after nearly two years of eating Ramen and trying to catch up with the mortgage note. It took almost three years for the bank to accept a short sale and I saved up a crapload of cash while they dithered. My credit took a really small hit (15 points) and I enjoyed seeing the bastard bank take, literally, take pennies of the dollar when a buyer was finally found.
If they won’t work with you, consider letting the house go and saving the cash until they kick you to the curb.
YMMV, of course. I just had a crew of dogs to take along, not kids or other dependents.
However it turns out, I’m sending good thoughts. It’s downright terrifying to consider losing a home.
BTW, Bank of America and the outfits they farm out bad mortgages to are absolutely the worst. The right hand has absolutely no idea what the left is doing and it’s like dealing with the world’s largest and most dysfunctional DMV.
I even got a foreclosure notice after the house had been sold for a year!
Along with my post above: the bank actually paid *me *almost 10k when the short sell was completed.
And one last thought (apologies for being a thread pig):
My BIL is a real estate attorney and told me to absolutely* not* send money once B of A/We Has All Your Bases, Bahamas LLC, mortgage company started playing the “nope, we won’t take any payment unless it is in full.”
The bank actually forgave quite a bit of back-pay once they realized they weren’t going to get a thing from me until they bent. Unfortunately, it wasn’t practical at all to hold onto the house in later days.
That’s great money saving advice if the end game is to wait out the bank/servicing company then let the house go to foreclosure, but if he actually wants to continue living in the house well into the future once he gets back on his feet I’m not seeing how not paying anything is going to be helpful.
Some people who buy distressed mortgages want the property. Some people want the cash flow. Either way, just like you, the lender has to be careful in what they accept. It may sound like common sense to you for them to just accept the money, but mortgage law doesn’t necessarily follow common sense.
Go find an attorney and file Chapter XIII bankruptcy. Then the loan servicing company will have to take the money that is dispersed by the court and they’ll have to restructure your loan where you can stay in the house. Do it the easy, legal way.
That’s what Chapter XIII is called a Wageearner’s Plan. I’m just glad you’ve got a good job.
Understand the pros and cons of Chapter 13 bankruptcy before deciding upon that route. It will take even longer than with late payments to get any new mortgages should you need one (e.g. such as forced to relocate by job).