Advice? Who to Talk to About Forclosure?

Updated on November 26, 2011
M.M. asks from Vail, CO
8 answers

This in not a parenting question but it is affecting many families so I hope it's OK to ask...We have a home and a rental unit; both are worth less than we paid for them and it's killing us financially. I have been told that my job 'may not exist' in a month so we will not be able to keep either property. My husband wants to walk away - from the house and the debt but I cannot do that nor do I have a better solution.

We have spoken to our accountant and to a Realator friend but I'm so confused by everything I have read online. I'm feel sick each day thinking about it (and cannot sleep hence writting at midnight!).

Can anyone who has been through this suggest an organization or resource they found invaluable - legalities, number crunching? We have applied for a mortgage adjustment and been rejected under the HOPE program and the bank is not willing to renegotiate the terms of our loans.


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answers from Phoenix on

We went through this and we applied for several programs over a 4 year period. Nothing helped and our bank wouldn't do a thing to help us. We met with a realtor and tried to short sale. After our bank turned down every offer we got, they foreclosed on us really fast. There was really nothing we could do but foreclosure really helped us believe it or not. Good luck to you!

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answers from San Francisco on

Does Suze Orman have anything to say about this situation? I know she published a book during the financial crisis but I can't remember if your issue was addressed.

She's pretty conservative...I have tended to agree with most of her advice that I've read. Just a thought.

So sorry you are losing sleep :( I know it will get better...

2 moms found this helpful


answers from Seattle on

I have never owned a home.

Both houses on either side of me has gone into or is starting to go into Foreclosure.

One has been in foreclosure with renters in it now for over two years. She has not been able to keep people in it, because once they learn it is a Foreclosure, they pack up and leave.

It was auctioned off on the 14th. But could not get sold. SO they are good there for the time being. The bank is allowing them to be there, and once it is sold they could be given the option to stay if the buyer is ok with that, or they will be given notice they have to vacate.

That ones is near the end of its life.

My other neighbor is over $100k upside down in their house. They are walking away. She is a Realtor. and knows the ropes. she figures they have at least 7 months that they can take to try and find a house. that is with working the system.

I do not have all the details in front of me, but if you would like I can try and get you some information from her on how this process works. Because not only is she now walking through it herself, she has been around lots people who have gone through it.

Pm me if you would like me to get that information from her. I know we are in different states, but she maybe able to give me the process step by step and I can get that to you.

Stay strong mama. Know that you are not alone out there. They can take your home. but they can not touch your pride and dignity.

2 moms found this helpful


answers from Washington DC on


I'm truly sorry you are going through this.

I realize how scary it is with the possibility of losing your job. On that end - get your resume together and get it out circulating to get a new job. Don't wait for the bottom to fall out. Be proactive. Is your husband working? If not - can he get a job that would help cover some of the expenses? Right now living in Vail - it might be minimum wage - but it's a job - the ski resorts are open and snow is on the ground! (not being funny - but it it's that tight you gotta do what you gotta do!)

I would not walk away from the properties. If the rental is bringing in enough to cover that mortgage - as I am assuming they are separate pieces of property? - let it keep going as a rental.

As long as you are making a payment - to the best of my knowledge - they cannot foreclose on you. My best friend used the HOPE program - it took her a YEAR of fighting to get them to help her. It was horrible. It seems like they reject everyone the first time...kinda like an insurance go back and appeal it.

I didn't realize that Vail, CO had a depressed housing market. You don't say how much the difference is between mortgage balance and appraised that would be important to might be able to do a quick sale and then get a bank loan for the difference. But walking away and just letting it go is not what I would do.

I hope that a solution presents itself other than walking away...Good luck. I'm truly sorry this is happening!

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answers from Appleton on

You are upside down on your mortgage but are keeping up the payments, for now you are okay. I would either offer to let your tenets take over the mortgage on the rental property or putting it up for sale. Quite often as long as you pay the interest on a loan the bank will not forclose. If they do foreclose it takes 13 months to foreclose and set up an auction. If you can't pay the mortgage stop paying and bank the money --let it foreclose and move into an apartment. Yes this will trash your credit but only for 7 years and then your credit will straighten out.
The only other idea I have is to file a BK so you can keep your house.

I'm not a Loan Officer but a friend of mine is a mortgage broker and he explained this to me a couple of years ago.

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answers from Lakeland on

I would try to avoid a foreclosure on either property. I would talk to your realtor friend about finding good tenants for your rental. My hubby and I have properties in PA and we used a realtor to find tenants. The rent covers the mortgage, we have the taxes and insurance paid through the mortgage. When the market gets better we will try to sell then.
You live in a very nice vacation area and the ski season is just starting. Why give up on it now? I also agree with another poster about finding a new job and not waiting. I would also appeal the HOPE program and see what happens.

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answers from Denver on

We just went through this. We were about 100k upside down on our house. We were so incredibly lucky to have found a realtor who was highly educated in short sales and foreclosures. Keep searching for the right realtor who tells you what you want to hear (dont go with somebody just because they are your friend) You dont have to foreclose. We did a short sale. The process is long, but worth it in the end. It only effects your credit for 2 years, unlike a foreclosure which hits it for 7. You stay in your house the whole time (infact you have to have it stay occupied) Im not sure how it would work for the rental. We were told not to rent our house because if we show the bank that we can make money off of it they wont consider the short sale. I guess if you can prove that you are loosing a ton of money, that might be different. If you have other questions feel free to send me a pm. Dont read the online stuff --it is like reading about every disease while you are pregnant (negative negative) Good Luck!

1 mom found this helpful


answers from Minneapolis on

What about renting out your properties? I'd move out and rent them out immediately to buy time to figure out your options. You DO NOT want to just walk away. I have heard so many horror stories. People think they're getting out of paying what they're upside down, but that is not the case.

You'd be better off filing for bankruptcy then just walking away. I don't know if you can rent your property out if you file for bankruptcy, but I'd check all other options before walking away. Having rotten credit can be mighty terrible thing when it comes to finding a rental, or if you have credit cards. Sometimes creditors/banks raise your fees when they find out you have defaulted elsewhere. As soon as your forclosure goes public, all of your other creditors may claim its because you're more of a risk and they need a guarantee they're going to get paid. If you work in finance you could lose your licensing, and your debt load overall could increase meaning day to day expenses could be next to impossible to handle.

Find a bankruptcy attorney and see if you qualify, because with bankruptcy your property is usually protected and untouchable. And/or find renters for your homes before just walking away. Read the following article:

1 mom found this helpful
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