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Received a Summons last week for the 20 of an 80/20 mortgage that was foreclosed


cloudy
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Our house was foreclosed on in 2/2008. We tried to work with them, tried to do a shortsale and seriously tried to bend over backwards, but they refused. They took the house and now they are coming after us for the 20% loan. The original was with Option One Mortgage, and now its with another (don't have the paper in front of me). Anyway, the house was in both my husband's and my name, but the summons is only in his name.

We are unemployed, on welfare(so desperately want off) and have 5 children, 2 of which are mentally disabled.

We're not even sure how to write the answer. There were no forms attached to the summons. We've never had to do any of this before. We simply don't know what to do. We spoke with a lawyer from Utah Legal Services, but they said there isn't much we can do either. (Not much help there and we can't afford to hire an attorney)

I am currently in negotiations with a Cap One account that I elected arbitration for, but haven't heard back from them in 3 weeks...but that is another story.

We just moved this last week also, so its been a difficult time, my 5 year old son also just had his appendix removed last week, we had to move from our last house because we discovered that it used to be a drug house before us and it was making us sick and the landlord refused to make any repairs...it has really been a difficult couple of weeks for us.

I'm mentally and physically exhausted and my brain hurts and I just am not sure what we are supposed to do. Could anyone lead me in the right direction? We have until July 6 to have an answer filed at both the clerks office and with the Plaintiffs lawyer.

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Wish I could tell you more positive information - I don't want to make you cry, but you waited too long to ask for help. Why did you wait so long?

Be advised if you do nothing it will go from bad to worst.

In your state the minimum it takes approximately 120 days to complete foreclosure. Your probably had 6 to 12 months with no payments. You knew this was going to happen?

Utah is one of the few states that allow borrowers to redeem a property after a foreclosure. The length of the redemption period is determined by a judge on a case by case basis. If you want to get your house back - you need to get an attorney ASAP.

One thing about your first mortgage - you think your problems are gone, they are not. I doubt they would file a deficiency judgment, it is easier to write off the losses. This is a strong chance you will receive a 1099-c from them to file with your taxes as income. When the property is sold, at a discounted price to what you owed on it. The difference between the sales price and what was owed will be treated as income. You will have to file it with your taxes next year.

After a foreclosure - when there is a second mortgage on a property. The lender is going to be trying collect what you owe. Expect them calling day, morning, night......did I mention night, morning, day... and day day, morning and night night...

Similar to a credit cards - this is an unsecured dept. They will harass you!!! Because you state is primarily a non judicial state - I am not sure how long this could take to get to the courts. If this debt remains unpaid, the worst they can do is file a judgment. Then a sheriff can confiscate personal property to action off (car, TV, furniture, etc...)

Again you waited to long to be able to do something positive. The only thing you could do to help your self, is negotiate a lower payoff with your second mortgage.

In your state I have experience with home owners saving their homes from forecloser. I also have a few deed in lieu's under my belt, where the home owner walked away from the property, after a short-sale did not sell.

Option One Mortgage is one of the worst lenders to try and do a loan modification with. Heard that they set up a website, listing a 1-800 number directly to a customer service department in India. Home owners would be connected to an Indian speaking rep reading off an English script. They would try to ask questions, the the Indian rep would would start from the beginning again.

You mentioned Capitol One your credit cards? I have heard of people negotiating their balanced down to as low as 7% of what they owed. This is considered an unsecured revolving debt. By settling a lower amount, you how to paid off the full amount at one time for the amount your are settling for.

Additionally - I guess you know you could of filed a chapter 13 bankruptcy to save your home. but you didn't. Through an attorney - from the sounds of your situation, you might still be able to file a chapter 7 bankruptcy, washing away all your unsecured debt (2nd Mortgage and Credit Cards). It might cost a few dollars for legal help, but it will be cheaper in the long term.

My advise to you - is to focus on a goal!!! My need to have a family meeting and decide on one goal that everybody pursues. From your description of your family - you really need organization!!! Start by scheduling your self. Start with short term goals, and then long term goals.

Learn to reinvent yourself - if you don't take care of your self, no body will....

G.L.

:):)

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Edited by 2ndTimeAround
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Wow! This is waaay above my pay grade! I suggest you post in 'Legal Issues- Is There a Lawyer in the House'. You need to do something fast to head this off and that's where you're apt to find legal advice pertaining to your situation.

Your being on public assistance may work to your advantage in regard to legal assistance, but you'll need to act quickly. A solution is out there, but it's up to you to find it. Wish you and your family the best of luck!

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The debt doesn't go away on the 20%. They are suing you personally for the deficiency. They can sue either or both of you for the remaining debt. There are MANY people out there who have the impression that foreclosure magically makes the debt disappear. In most states and on most mortgage debt, this isn't the case.

BUT, from the sound of it, you have no non-exempt assets (is this correct?), so you're likely judgment proof. So why be concerned? You have nothing to give them. And if it bothers you, then file a bankruptcy. It isn't unusual for a Chapter 7 to follow a foreclsoure.

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Our last payment to them was Oct 2007. I was on bedrest pregnant with our last child. I had been on bed rest for nearly 6 months at that point. He was delivered in Nov. 2007. They foreclosed Feb 2008. I nearly died during that pregnancy and needed 3 blood transfusions.

Our problem is the we've always been too honest with them. As soon as my husband lost his good job we called them and told them we were having difficulties....they took advantage of the situation. We tried to negotiate over and over again with them and set up a plan...we even tried to refinance and modify the loan...rejected. Even our church was willing to help with a couple of payments. The mortgage company refused the last payment because it was 2 days late.They said they would re-do the plan if we paid $3000 within 4 days and increased our payment from $1400 to $2100 per month. Impossible for us. We have only heard from this mortgage or this lawyer 3 times in the last 2 1/2 years, since they foreclosed. We tried the short sale...they refused. It's not that we waited so long...we were told by many people to just ignore it...so we did. We didn't choose to no longer pay...we couldn't pay because they increased the payment and my husband lost his $4500 a month job and was only working for $1700 a month when we couldn't do it anymore. There was no way to make it work.

I guess we'll just have to answer the best we can and do what we can. We have no real assets. We're just worried that they can mess up our checking account. What little money we do earn from temp jobs goes towards our bills (housing, utilities). We only have 3 weeks left of unemployment also.

Anyway, thanks for listening. We'll just try our best.

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cloudy, the advice jq gave you is excellent! Bankruptcy is not a quick-fix, but it's much better than letting someone roll over you, for sure!

Sooner or later (hopefully sooner) your situation is going to improve, so try to set yourself up for that next time by minimizing the damage done by this mess.

The heavy-handedness of the financial sector is going to come back to bite them in the end. I know you can't see it right now, but maybe they did us a favor, in the long run, by showing everybody what worms they really are. IMHO, they are trying to grab something of some real value to replace the worthless junk that they bought into. Anyway, I predict some cheap property in the future, so try to position yourself to take advantage of that.

The folks that survived the Depression didn't trust bankers, and avoided debt, for a reason! I must have listened, although not closely enough to totally avoid the trap, unfortunately.:cry:

Take this opportunity to educate yourself so the next "rainy day" is not so devastating. And fight back, what ya got to lose? Best of luck to you and your family!

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We had a chp 7 bankruptcy in 2005 for medical and a failed home business. We bought the house in 2006. (The real estate agent whom we had called for rental listings said that it was the perfect time to buy that we were in the "window" to qualify...and we did surprisingly). Our credit before the Bankruptcy was excellent. After the bankruptcy it only went down to 680, so qualified us for the loan, albeit a tricky loan.

Anyway, I spoke with our bankruptcy lawyer yesterday. She said we can do a Chap. 13 with a very minimal monthly payment. We're considering it. We've been told that this company is very ruthless and will require an inventory of all our household goods to determine if there is anything they can take. We really just need these people to go away so that we can start over. It's been a very difficult decade for us. We just need the opportunity to begin again and try to manage some sort of secure life for our children. If the 13 will allow us to do that, then I suppose that is what we should do.

And just for the record, we managed our finances quite nicely and had a savings and a budget before my husband lost his good paying job. We've never had boats, atv's, luxury vehicles, jewelery, big screen tv's or any other luxury items. We've always been very simple people. The savings is depleted now and we have no real assets of any kind. He's had to start all over with school as well. His degree was in Business Management, he now is having to learn an entirely new profession and going into Pharmacy.

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Been there done that. I had a CH7 followed in 6 yrs by a CH13. My CH13 was a "Zero % plan" which meant my unsecured creditors got NOTHING!!!! (Mostly the IRS was getting paid along with a vehicle loan.)

I would go for the 13. After I did that, I went w/o credit for years and living cash only was actually a real stress free way to live!

God Bless Ya sweetie! You can get throught this!xangelx

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