Questions about foreclsoure

[teenagebambam]

Okay, so say I'm not in DIRE financial trouble right now, but I soon will be. (By dire I mean buying groceries on credit card, which may not seem dire by some people's standards, but seeing as how I haven't carried any credit card debt for ten years it seems dire to me). Say I have a primary mortgage payment plus a HELOC payment every month. Say the primary mortgage is in my same-sex partner's name only, and the HELOC is in both our names. Say we keep on paying the HELOC and just stop paying the mortgage. How long do we have til we're kicked out? My partner's credit is screwed for awhile, but is mine?

I'm being flip on purpose, but I've made repeated aattempts to work with the bank holding the mortgage and HELOC - the answer I get is, in a nutshell, "we won't help you unless you're already delinquent in your mortgage payments". Which we're not. Yet. But real close.

[MercutioATC]

1. Depends on your lending institution. At least 90 days.

If you just stop paying and refuse to talk with them at all, it'll take them 90 days to have you removed from the premises.

Obviously, that time frame can expand depending on a lot of factors like their willingness to work with you and your willingness/ability to communicate with them and make some sort of payments.

[yellowdogintexas]

3. pay minimums on the HELOC for a while. Keeps you current and

keeps that off your credit score. Hit the principal on that one later.

Be sure you are both authorized to discuss the account with the lender before you call. !!!
Otherwise only your partner can do the talking.

Talk to the lender. BUT BEFORE YOU DO:

Many lenders will tell you they can't do much until you are actually 90 days or more in arrears. That means (using October 1 as the first defaulted payment) that the payment which should have been received in October is not received by December 31. So even if your Oct payment is late, it postpones the foreclosure. So continuing to pay even if you are 30 days late a couple of times, is better than not paying at all. Neither option is better or worse for your credit score, what we are talking about here is losing the property. Many lenders will work with you on setting up a payment plan that allows you to put 'X' amount each week and when enough is there to make a payment it rolls out to the payment side. This keeps you out of the danger zone for foreclosure if you are able to make that payment. They will review your financial obligations, and income and determine if they can do this. Sometimes they can't because of your state regulations, or terms of the loan, but if they can they will especially in this market.

The amount of time before a lender can begin foreclosure is based on the terms of the NOTE, not the mortgage. The note is drawn up in accordance with state banking regulations where you live. Get out the loan documents for the mortgages, and if you are with a major lender you can view them online. The terms of default should be clearly stated in the Note.

The mortgage is the legal owner ship part of the deal. The NOTE is the financial transaction part of the deal.

are both loans w/same lender?
Things to ask:
can they be combined, at a lower rate of interest, or can the main mortgage be refinanced at a lower rate of interest.
do you have taxes and insurance in escrow? Is there any overage in the escrow?(a call to customer service will help with these and the following questions)
Can you acquire less expensive insurance, which would lower the escrow portion, and lower the payment, and/or create an overage in the escrow account (or a refund from the old insurance co)
Are you sure your property taxes are as low as possible? Do you have a homestead exemption in place, if your state offers one?
is there PMI on the loan that can now be taken off?
if it is an ARM, does it qualify for workout to reset it at a fixed rate lower than the current rate?

I was a CSR in a call center for a Major Lender, and I specialized in Escrow account servicing. Sometimes all the pieces fell into place enough that we could generate some funds for the homeowner which we rolled over to the mortgage, or put in partial payment for the homeowner to supplement to create a monthly payment.

If you can ride out w/o triggering a foreclosure and keep the payment under 90 days in arrears, when you file taxes, if you get a refund, you can use it to catch up.

In the current climate, the lender does not really want to foreclose, it is a money loss for them.

I hope this helps. When you do make your call to them, you will be asked questions which will trigger other questions on your part, take notes. It can get hellaciously confusing. The rep has your entire account history right there on the computer, and all prior calls should be documented.

I strongly recommend you review everything you can about your loan(s) on line before you call, print out stuff to have handy if you need it, reviewed and highlighted.

Most mortgages do not have a late fee until 15th of the month, some are 10 day. But the report to credit services is based on what is in the system on the final day of the month. Verify how your lender determines final day of the month when it falls on weekend.
Pay on line whenever their system will allow it if you have to pay at last minute, because it posts instantly. My old company would allow up to 30 days late to pay on line, but would not take partial payments.

I wish you all kinds of luck with this, and I hope I have helped you some.

[teenagebambam]

5. Thanks, very informative

Yes, both the mortgage and the HELOC are with the same lender (Bank of America) as well as all our checking and minimal savings accounts - that's the only dicey part, if we skipped a mortgage payment the money would still be there somewhere and they could see where it was!

[yellowdogintexas]

6. if you skip one mortgage payment, you will get a collection call

if you pay it 1 day after the month end, you are reportable to credit rating agencies.

These big lenders simply do not have the time or staff to cross check every single mortgage for possible funds in other accounts in their institutions. This could come up if you are in workout, just keep it paid as early as you can each month, try to keep yourselves from getting too far behind.

Oh, and you are quite welcome. I hope you get past this w/o risking losing the house.

[qb]

2. Find a housing counselor.

You may be able to negotiate a forebearance (postponing mortgage payments). I think the banks are so swamped with foreclosures or near-foreclosures that they will ignore your requests until you find a professional who can help you out.

This link may help:
http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm

[yellowdogintexas]

4. good point, combined with my post above. Also this: If the main mortgage defaults, only one

credit score is impacted. If the HELOC defaults, both credit scores, are impacted.

Pay the absolute smallest amount you can get away with on the HELOC, on time every month. YOu can do this for quite some time before they will roll it to an amortized payment. Yes you don't get it paid off as early but you can do this on a HELOC without even asking permission. Just like credit cards.