My Experiences - How I Learned to Escape Home Mortgage Foreclosure Trap
Home Foreclosure is Widespread in California
In Danger of Home Foreclosure?
This is a place where you can tell your story or learn from the Foreclosure experiences of others.
Bank foreclosure of your home is one of the worst crises you and your family will ever have to face.
Facing home foreclosure can have a disastrous effect - not only on your finances, but on your mental and emotional health and the relationships in your family.
Can you imagine this happening to you? I can. I know how difficult this can be, because I have already had to avoid foreclosure.
My name is Phil.
I'm not a real estate investor, a mortgage lender, lawyer or a financial adviser.
I am guy who lost his his job and could no longer pay the mortgage.
CNNMoney reported in Dec 2008 that:
"A record 1.35 million homes were in foreclosure in the third quarter, driving the foreclosure rate up to 2.97%."
"... the number of homeowners falling behind on their mortgages rose to a record 6.99%"
concluding that "...one in 10 borrowers in America are either delinquent or in foreclosure."
In 2007, about one of every 100 U.S. households was at some stage of the foreclosure process. An increase of 79% over 2006.
From July through September of 2008, nearly 766,000 more homes received at least one foreclosure-related notice! (Hattiesburg American)
Perhaps you want to find out how to stop foreclosure, and if that isn't possible, to go through the foreclosure process and come out the other side in as good a shape as possible.
I have put this hub together for people, like you, who might find also be facing that possibility and need foreclosure help.
If you are facing foreclosure, or just wondering what it could mean, I want you to have an easier time than I did.
And I put it up so we could have a place to comment, vent, speak out, and share our stories, experiences and tips about what works for you to survive home foreclosure.
So please, use the comments section below to share your stories.
Because by sharing our experiences, we can not only help each other, but also, if enough of us raise our voices here, the lawmakers and financial institutions wll understand what's really happening and start making decisions that will help real people like me - and you!
Resources to Avoid or Stop Foreclosure
- Foreclosure - Wikipedia, the free encyclopedia
Wikipedia is not the most current, but is very helpful for a general understanding...
- LawyersGuide.com: Lawyers Guide, Attorneys, Law Firms, and Legal Directory
Don't needlessly risk your biggest investment! Foreclosure laws vary from state to state. Find a local lawyer specializing in Real Estate at Lawyers.com
How They Take Away Your Home with Foreclosure
The Foreclosure Process
Note: this varies from state to state and from lender to lender - your specific mortgage contract may vary! But in plain language the foreclosure process works like this:
- You fall behind on your house payments.
- The lender (or servicer) of your mortgage contacts you and attempts to collect via phone calls, letters, etc.
- If you get too far behind (usually 3 payments), the lender accelerates your loan, meaning the whole amount outstanding is due, and sends you a notice of foreclosure.
- If you can't pay off the mortgage via refinance, alternative financing, or selling the home (short sale) the lender takes you to court.
- If you can't provide an adequate legal defense, the court orders foreclosure and you are given a date by which you must be out of the house.
- Anything you leave in the foreclosed house becomes property of the lender, and will probably go to the landfill.
- Then your home is auctioned at a foreclosure aution by the county sherriff usually at the county courthouse.
- If the foreclosure auction nets more than you owe, and after you pay any other other leins on the house, you get to keep what's left.
- If the foreclosure auction nets less than you owe, you still owe the difference to the lender.
- If the mortgage foreclosed was the original mortgage, chances are the lender can't go after any of your other assets.
- If it is a refinance, home equity loan or home equity line of credit, they probably can go after the rest of your assets.
- If you were paying PMI (mortgage insurance) then the lender gets the proceeds of that insurance policy - not you.
- If you had a second mortgage or equity loan or mechanic's lein against the house, you still owe those lenders (you can find out if you have leins against the property with a title search - done by a title company or by going directly to the county recorders office)
- If there is no buyer at the foreclosure auction, the lender takes title to the house and becomes REO (real estate owned) property of the lender
Lost My Job, Almost Lost My Home
At the risk of giving away the ending, I was able to avoid foreclosure.
I was able to make the payments until I could sell the house. There were several times that I only had cash for the payment and plastic took care of the rest.
About 4 years ago I lost my job. It was my latest in a series of layoffs from decent paying High Tech jobs.
I owned a suburban ranch style home in a great neighborhood and was single-parenting two daughters. I had owned my own homes and faithfully made mortgage payments for years and years and had a great credit score.
And I had told my daughters on more than one occasion that home ownership had been the one investment that had always paid off for me. I really wasn't much of an investor, but house appreciation had been a given, while stocks, mutual funds, and my 401k accounts had largely tanked.
But as I looked unsuccessfully for work, I soon realized that I really could not keep making those payments. But, I didn't want to lose my home and the equity in in to home foreclosure, I had to do something.
So, I went the landlord route. I moved with my youngest into an apartment and rented the house to my college age daughter and some friends of hers.
That worked out fairly well, but after a year or so, they were ready to move on. I cleaned it up, put it on Craigslist and found a series of tenants for the next couple of years.
The rental income was just about break even for me, but the house was in fairly good shape and didn't require much in repairs.
Until last year. My last tenant had a small child and a large dog. (Advice to prospective landlords: it is much better if they have a large child and small dog).
So I moved her out, moved myself back in and worked on painting, planting and repairs as I watched my savings dwindle. I did a For Sale by Owner (second time I've done that) and after 6 months managed to sell it.
Financially, keeping it until I could sell it took two different home equity loans and cashing in two 401K plans. I came out ahead, and have moved into a small but comfortable apartment.
I have sold my car, as well, and overall am enjoying the urban life better than the suburban one.
That's my story. I would appreciate hearing yours. Please, use the comments below to share your thoughts, strategies, tactics, and tips.
No political ranting, please. I do my share elsewhere, and there are lots of other places to do that.
San Francisco CPA Services
- San Francisco CPA Service & Tax Accounting
It's your money - keep more of it!
Foreclosure Books at Amazon.com
You should seek independent professional advice before acting upon any information on this Hub Page.