What happens in a very depressed housing market when you can not make your payments and you go into foreclosure?
The mortgage company loaned us the note on both our incomes she has left and is divorcing me and I can’t make the payments.

Technorati Tags: Foreclosure, housing market, incomes, mortgage company

The Obama administration’s billion program to curb foreclosures isn’t working, and the White House knows it.

Administration officials blame the mortgage servicers charged with carrying out the mortgage modifications and refinancing under the federal program. Many of their Democratic allies on Capitol Hill back them up, but others are criticizing the White House for fumbling the execution. Whatever the reason, the program hasn’t stopped the rising tide of foreclosures: Experts predict that at least another 2 million homes will be lost this year, and the administration’s plan has so far reached only about 160,000 of the 3 million to 4 million homes it was supposed to protect over the next three years………

“Everybody understands that getting out of this broader crisis requires that we stabilize our housing market and stem the tide of foreclosures,” Senate Banking Chairman Chris Dodd (D-Conn.) said in a hearing Thursday. But in unusually harsh words for a Democrat, Dodd said that the Obama administration’s progress in stopping foreclosures has been “disgraceful” so far.

“It’s just hard to explain to the working families in America how it is we could move so fast with extraordinarily complicated deals with the huge financial institutions, and we are moving so incredibly slowly, mired in paperwork, in rules, in talking to banks back home,” said Sen. Jeff Merkley (D-Ore.).

http://www.politico.com/news/stories/0709/25095.html

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With over million applications pending, Lenders have only modified 66,000 home loans. Lenders come up with every excuse in the book and have no intention or desire to modify your loan without a fight. Why would they rather foreclose and force future value of their assets down when home prices fall? Should our Government pass legislation requiring Lenders to modify all loans in default by reducing the principal to market value and fixing the rate at 2-3% while reseting the term? Instead, banks will foreclose, spend ,000 including lost revenue while the house sits on the market for 9 months before they resell it for market or to an investor for 30% below market. Fixing the housing market involves saving people from losing their homes and preventing values from free falling again.

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Just found out my wife has been cheating on me, and I’ll be getting a divorce. Here’s the situation: We just refinanced our home in November and have virtually no equity in it. Since the housing market has turned, it’s unlikely that we’d get what it appraised for in a sale. So what are my options? If we both stop paying the two mortgages, it will go into foreclosure, but I’m unclear what would happen after that. Could someone please explain?
To answer a couple questions, I’m in the Seattle area. And the problem is that I doubt we could sell if for the amount that we owe on our mortgages.

Technorati Tags: couple questions, Foreclosure, getting a divorce, housing market, mortgages, seattle area

I have a great fixed rate on my first mortgage 4 3/4%, however I am paying about 11% on my second. Are there any companies out there that will refinance only the 2nd? And how does equity come into play with this, the CA housing market is not that great! Not looking for cash out, just a lower monthly payment. If anyone knows a company that might work with us, please let me know. Thanks,

Technorati Tags: first mortgage, fixed rate, housing market

I sold my house in PA 2 years ago with a balloon note that came due last month. The new owner has always stated that when she refinances I will get my money. I do not have any proof that she will be able to get this refinance. The house is a two family with a clause in the 2nd mortgage that states if she is in default she no longer has rights to the collected rent. We have requested the rent along with documentation and stated that if she doesn’t comply that we will be forced to foreclose. She will no longer speak to us after repeated requests for updates etc. If we foreclose, does the first mortgage still get priority if we sell the house at auction? With the housing market and the fact she put nothing down on the house, I do not think the value will even completely take care of the 1st mortgage. How do I force her to give me the rent and what are the repercussions of foreclosure? If I foreclose, I am not sure I would be able to get the financing to buy out the 1st mortgage and if the 1st mortgage gets paid, I may end up with nothing except the expenses of the foreclosure.

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I just read an article on line about how Bank of America is offering people principal payment reductions if they qualify. To qualify you have to be making payments on a home 20% more than it’s current market value, and you have to have missed at least 2 months of payments. Is this truly helping or hurting the housing market? In the short term it’s helping I think because there will be less foreclosures in the neighborhoods meaning that everyone around them’s houses will not keep losing value. But, in the long term, there may be more falling into this category if they make it so easy to not foreclose. I would imagine some people will stop payments on purpose to get this principal reduction. What about those of us (I fall into this category) that is a good customer and pays on time and is far underwater on my house (I owe way more than it’s currently worth). I feel it’s kind of not fair because it rewards bad behavior. But, it may help in the long term? How do youall feel about this? I’m a little confused.

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With current housing market house can probably only be sold for about 0k…

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I am facing foreclosure soon. I have approx. 20K in CC debt, half of which is current and the other half has been charged off, but collectors are calling me everyday trying to collect. I owe approx. 20k in back taxes and about half of that is over 3 years old. That is important because if back taxes are over 3 years old i can be included in a ch. 7 BK. My bank is willing to look at a short sale on my property but have said they will file a deficiency judgment against me for the difference which could be in the ten’s of thousands. I know a short sale would help me avoid a foreclosure on my credit but my scores are 525-510-530 so I am not sure it can hurt too much. Would CH 7 Bankruptcy be a better option, asusming I qualify. I have been told by a BK atty that I would. Thanks in advance.
Thank you for the kind words and the advice. Keeping the hosue is not an option and I simply cannot afford it. I am licensed Realtor and had 700+ credit when I bought it a couple years ago. I worked for a home builder and he has recently gone out of business- the housing slump and decimated my income. I was not intentionally negiligent on my bills…I could not control the housing market. Refinancing is not an option..my scores are now in the low 500’s. I want to be responsible and pay my debts but if I do a short sale and then the bank files a judgment against me for the amount they lose on the sale I will not be able to pay it. I hate to have the stigma bankruptcy on my credit if at all possible but it is tough to get through the day when creditors are continually calling. Now the possibility of a large (K +) judgment against is looming if I do a short sale.

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This is for my friend – not me. But I don’t even know where to begin to help her find answers. She was in a long-term relationship with another woman. They had been "married" four years ago. She moved into the woman’s house. They refinanced and put the house totally in my friend’s name. Now, 4 years later, out of the blue, the girlfriend dumps her and kicks her out of the house.

The girlfriend is living in the house, NOT paying the house payment, my friend is getting legal foreclosure notices. She cannot pay for the house by herself and has no credit to refinance or anything. It is my belief that they owe more on the house than it’s worth. They tried to sell the house a year ago and failed. The house is currently on the market, but it probably won’t sell – or it won’t sell for the money they owe.

The girlfriend is living there with her adult daughter. They are not paying anything that we know of. All the utilities are also in my friend’s name. The two cars they both drive are in my friend’s name (cars for my friend and her girlfriend – my friend is going to keep her car and the girlfriend wants to keep the one she is driving). They also have loans and credit cards together.

Their marriage was (of course) not a legal one (we are in Kentucky) and they had no legal papers that dealt with any kind of breakup. I say my friend needs to talk to a real estate lawyer at the very least.

Has anyone ever been in a situation like this or do you have any suggestions on where to turn for advice?

What I think:

1. I think my friend needs to draw up a document on the house that says if the house sells for more than they owe, they split the extra 50/50 (this will never happen in today’s housing market). If the house sells for less or is taken by the bank, they need to split the amount owed 50/50 and pay it off.

2. The girlfriend needs to figure a way to (A) pay off the car loan for the car she wants to keep or (B) get the car loan in her name only.

3. My friend needs to make the girlfriend sign a piece of paper about the utilites stating that she will pay them until she leaves the property. This way, if she fails to pay them, I am thinking that my friend could take her to small claims court.

More info (sorry so long): My friend has filed bankruptcy in the last 10 years, so that is not an option. She also makes very little money and has a child to support by herself (receives no child support or other help). The girlfriend makes more money and has more education than my friend. The girlfriend also has not been friendly during the breakup. She has stiffed me on a business arrangement before and I have no doubt she would lie, cheat and steal to protect herself and get out of paying money.

So, that’s the background. What would you do?

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