Has anyone had their house foreclose due to the current housing market?

Question

I bought my home two years ago, when the market was hot. I was in a two year fixed loan. However, the market fell and now the value of my home is upside down and I can't refinance. It went up over 1000 in one full swoop and there is just no way I can afford it now. Is there anyone who can relate?
By the way, I live in California.

By the way. I knew what I was getting into. I wasn't one of these people with stated income and just signing my life away. I write contracts for a living. At the time, my area was appreciating by 100K a year. My intent was to refinance with all that equity and have no problem doing so. I already own two homes. One I bought when the market was normal 150K 2000 sqr feet. The second home is 2600 sqr feet and 600K. I could afford my home with the normal payment. I make a six figure income. But, with the rate jumping from 5.25, to 9, is just rediculous and leaders shouldn't even be allowed to do this. Not even people making a decent salary like mine could afford that. It should be monitored and against the law.

Answer 1

This is what is going on all over CA. But, you saw this coming, you could have sold or refinanced earlier. You choose not to do anything.

BTW, you had an adjustable loan, fixed loans NEVER change.

Answer 2

A lot of people in California and nationwide can relate. You bought a house and assumed that, in a crisis, you could always just refinance the loan and get back ahead.

Very few homeowners actually believed the price of their home would drop and they'd owe more than it is worth. Even if they planned for no growth or very small appreciation, almost no one planned in the event property values went down. It hadn't happened in years, so there was no reason to expect it to happen now.

So don't feel too bad. You're now a victim of a system that was set up to take as much of your wealth away as possible. Just do whatever is in your and your family's best interests, and move on from there.

Answer 3

Call the lender first thing on Monday, their phone number is on every invoice that they send you. They won't do anything major until you are at least 60 days behind but, then it happens pretty quickly. See if they will consider a modification of your loan agreement. Some lenders are actually renegotiating the loan. I had one company drop the interest rate by 4% recently. Not that your's will but, it's worth the conversation. They are going to want some information from you, too. The same kind of financial information that you provided when you applied for the loan. Write a letter explaining what happened and why you are behind on your payments. Let them know ifyou think you can come out of it or what you are hoping for. You DON'T want to be talking to the collection department-they get paid to collect! You DO want to be speaking to the loss mitigation department -they try to workout solutions see? If you can't get it done in the next few days-drop me an e-mail and let me help-no charge to you. Lenders pay me to get this done. Meanwhile good luck!

Answer 4

WHICH housing market?? Do you think that EVERY local market is in the same exact situation??? Housing markets vary according to what side of the street you live on in some areas. Lastly, if you think that the bubble markets are going to reach 2006 levels anytime in the next few decades, you are delusional.

Answer 5

Rest assured you are not alone.

I tried my very best to talk three friends out of buying with a CREATIVE mortgage. Now they are upside down and facing foreclosure.

People who wouldn't sign a blank check, who wouldn't sign a blank car rental contract, who wouldn't think of having car repairs without an estimate in writing and the list goes on will sign a 30 year mortgage without ANY IDEA of what it is going to cost in the end.

It may sound harsh but you and my three friends have something in common. All four of you have no one to blame but yourselves. Like you, they had a FIXED mortgage but for only three years. During that time they were in reverse amortization. Their down payment is gone, as well as all the moneys they gave the mortgage company. They will lose their house and still owe the mortgage company because they owe more than the house sold for and that they agreed to pay.

A lot of people are just sitting ducks for these things. They are very close to a scam. You, and my friends, have one hope. In this welfare state that we live in, there is a very good chance the government will take money from me and other tax payers and bail you out. The thought of my tax dollars paying for other people's ignorance galls me.

Like I said earlier, this may sound harsh but you and thousands of others grabbed a bunch of "FREE" money and now someone somehow is going to have to help you. If it were up to me, you and all the rest could pay for their mistakes themselves. Sorry, but I will bet you have a nicer house than I and your payments are lower than mine and I will be forced to make up the difference caused when you had to have a house you COULDN’T afford..

Welfare really works great, but only if you are on the receiving end.

Good luck, I really hope all of you find a way out. I really have nothing personal against you or others in the same fix. I am just tired of bailing out everyone that gets into trouble by their own hand.

Answer 6

This happened to the daughter of one of my colleagues a little over two years ago.

She bought a condomimium that was ridiculously over priced in San Jose California..

She lost the condominium when the lender foreclosed because she was not able to make the payments when the loan adjusted upward.

I referred her to my real estate attorney and my real estate appraiser and my private investigator.

My real estate appraiser showed that the property was ridiculously over priced when she bought it.

My investigator found that this real estate broker and mortgage broker had been engaging in behavior that appeared to be fraudulent.

My real estate attorney helped her file a complaint against the real estate broker and the mortgage broker with the State of California Department of Real Estate.

At that time there were apparently no other complaints against this real estate broker and mortgage broker.

Subsequently this real estate broker and mortgage broker have been the subjects of numerous complaints with the Department of Real Estate.

My attorney also is in the process of suing the real estate broker and mortgage broker for damages on her behalf

Recently this real estate broker and mortgage broker were the subjects of several front page articles by our local paper, the San Jose Mercury News .

Apparently this real estate broker and mortgage broker were working together an commiting fraud aganst unspohisticated buyers.

Apparently this real estate broker and mortgage broker continued to commit fraud even after my attorney had contacted them and filed complaints against them.


My observation is that if they put you into a mortgage that you cannot pay after the rate has increased they are guilty of malpractice at best and more likely they are guilty of fraud.


The standard underwiting guidelins on all of these loans requires that you be able to make the payments when the loan adjusts.

I would be willing to bet that if a good real estate attorney and a good private investigator investigated this, they would find that the mortgage broker committed fraud on the lender to convince the lender to give you a loan that you cannot afford.

I recommend that you contact an attorney who specializes in real estate law. Bring all of the documents that you have regarding this transaction.

Bring copies of the closing papers that you received from the title company.

If you have misplaced those documents, contact the title company and ask them for a duplicate set of the closing documents.


Contact a real estate appraiser who is a Member of The Appraisal Institute. Tell him or her that the purpose of the appraisal is to determine whether or not the property was over priced when you bought it.

Also get a copy of the lender's appraisal if you do not already have one. Ask you appraiser to do a field review of the lender's appraisal to determine if it was done in a competent manner.

I have found that many of the lender's appraisals when they are reviewed are not done in a competent manner.

I recommend that you ask your attorney to recover damages from the real estate brokers, mortgage brokers, and appraisers that were involved in your transaction.

Although this is very traumatic for you right now, there are many people who are very concerned by the fraud that has been committed by real estate agents, real estate brokers and mortgage brokers in the past few years.

This is particularly true now that their fraudulent behavior is having a very damaging effect on the credit markets, our economy and the lives of good ordinary working people who just wanted to own a home and were taken advantage of by these cretins.


I know that it is very unpleasant now, however if you will pursue my recommendations to you, I expect that you will be able to recover at least some of your damages.

Answer 7

Boy I can relate. Unfortunately what I ended up doing is giving the house back in Lieu of Deed. Therefore it won't effect my credit. I had no equity left in it and had it on the market for over a year and a half and couldn't sell it. If you don't want to give it back, work with your mortgage company on a repayment plan. Most mortgage companies are more than willing to work with their customers now, in lieu of getting another house they have to put on the market themselves and bruising their credability. Good Luck, and I live in Wis.

Answer 8

3 homes you where an investor trying to make a killing on the market, with investment comes risk, with high profits as you where looking for comes more risk. This time you lost, you made the gamble, you knew the risk, and in this case you lost. Like the stock market lick your wounds and take it. Greed is what caused this not the lenders.

Answer 9

Hi, I help people in your shoes in California on a daily basis. As others stated, your best bet is to contact your lender and see what options they can provide you with. If what they offer is no good to you, you can sell your home, even if the value of your home is lower than your loans.

Regards

Answer 10

Best thing to do is contact your lender, and have them work with you on a repayment program, its tough right now espically if you are upside down in this market, good luck