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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] When smart people do stupid things - or, how can we avoid becoming homeless, now that foreclosure has occured? (long) Posted by Michelle on November 09, 2001 at 9:38 PM Most of our sob-story probably is unnecessary, but I feel compelled to explain out of pride, stubborness, whininess or whatever. *s* In early 2000, my boyfriend (I'll call him "J", since that's his initial) took advantage of his credit union's electronic payment service. The service had a free three-month trial, then cost a nominal fee after the initial trial. As an e-commerce professional, J assumed the free trial would convert automatically after the initial three months. Well, it didn't. He became aware of this when his gas service was cut off for non-payment. He re-subscribed to the paid service and things seemed to be going fine. What J didn't realize was that a mortgage payment had been missed during the lapse. Because the mortgage company now considered him to be one month behind in payments, they began returning checks. However, the returned checks didn't go back to the auto-pay agent; they went back to J. Thinking he was enjoying the luxury of paper-free bill-paying, J stopped opening the monthly statements he received, depending on the auto-pay agent's online data. He saw that the checks were being issued and assumed all was well. I moved in with J in October of 2000. In late November, two Sheriff's agents showed up with a notice of intent to foreclose. We contacted FreshStartUSA (now DebtBug) and they assisted us in working out a forbearance agreement with the mortgage company. The initial offer involved a 15-month workout period with all payments to be made in certified funds. Getting certified funds involved a forty-mile drive to the credit union each month, so J. opted to increase his monthly payment, and get things rolling with an $8,000 initial payment. (The latter required him to sell off most of his stock portfolio.) This cut the forebearance period down to about 6 months. Things were going fine until April of 2001, when J lost his job. Rather than see this as a bad thing, we decided take advantage of the opportunity to pursue our dream of running a home-based web design and development business. We knew we were desperately under-capitalized, but neither of us could fathom returning to "normal" jobs (more back-story there than is even _remotely_ necessary. *s*). So we went on blind faith. Evidently, we had a bit too much faith, and failed to cut back on our expenses even remotely like we should have. By the end of May, it became obvious we weren't going to be able to make our June mortgage payment. We procrastinated on seeking assistance, counting on a couple of pending contracts to make it all better. Well...(drumroll, please) it didn't happen. At the last minute, we managed to get some money from a family member, but then we got the payment in late, thus defaulting on the forebearance agreement. Well, at that point, we finally picked up the clue phone and realized we weren't going to be able to keep the house, regardless of whether we were able to continue the payments for a while. In our ignorance, we assumed the foreclosure proceedings would start over, thus buying us some time to build our business. Last week, we received notice via regular mail that the mortgage had been foreclosed, is now in possession of the VA, and our redemption period expires on 11/16. We take complete responsibility for screwing ourselves with our head-in-the sand attitude. We do feel we were victims of a variety of circumstances; at the same time, we recognize we could have done a lot of things differently and more responsibly. All that is moot at this point. Right now we need to avoid becoming homeless. Questions: We have letters from real-estate investors. We realize we will have to sell the house for below market value; can we expect to at least pay off the outstanding balance and perhaps come out with enough to put a down-payment on a fixer-upper? (We're both handy and have construction skills and experience.) This is a VA loan; does the VA have any programs to help AFTER foreclosure has taken place? Assuming we are seriously...messed up...how long do we have before we're living in a box? We have very little cash on hand, but that is likely to change in the next 3 months thanks to new contracts, etc. We're willing, though not eager, to rent, but we have two dogs and three cats, and that's an issue. We don't want to give them up if at all possible. For the record: The house is in very good shape. There are some cosmetic issues but they are things we could easily remedy ourselves; less than one week's work at most. Again, this is a VA foreclosure; the house is 3 years old; we are in Kansas (a near suburb of Kansas City); loan balance is probably about $110,000 and comparables are going for $125,000 to $139,000. Any and all information is most welcome. If you'd prefer you can email me at mdspowell@yahoo.com. (I'm so desperate, I'm not afraid of SPAM. *s*) Follow Ups: Re: Why not consider a BNK 13 plan? NJDave 2:28 PM, 11/10/01 (1) Re: Why not consider a BNK 13 plan? Michelle 6:25 PM, 11/10/01 (0) Post a Followup: Name : E-Mail : Subject : Comments: : Most of our sob-story probably is unnecessary, but I feel compelled to explain out of pride, stubborness, whininess or whatever. *s* : In early 2000, my boyfriend (I'll call him "J", since that's his initial) took advantage of his credit union's electronic payment service. The service had a free three-month trial, then cost a nominal fee after the initial trial. As an e-commerce professional, J assumed the free trial would convert automatically after the initial three months. Well, it didn't. He became aware of this when his gas service was cut off for non-payment. He re-subscribed to the paid service and things seemed to be going fine. : What J didn't realize was that a mortgage payment had been missed during the lapse. Because the mortgage company now considered him to be one month behind in payments, they began returning checks. However, the returned checks didn't go back to the auto-pay agent; they went back to J. Thinking he was enjoying the luxury of paper-free bill-paying, J stopped opening the monthly statements he received, depending on the auto-pay agent's online data. He saw that the checks were being issued and assumed all was well. : I moved in with J in October of 2000. In late November, two Sheriff's agents showed up with a notice of intent to foreclose. We contacted FreshStartUSA (now DebtBug) and they assisted us in working out a forbearance agreement with the mortgage company. The initial offer involved a 15-month workout period with all payments to be made in certified funds. Getting certified funds involved a forty-mile drive to the credit union each month, so J. opted to increase his monthly payment, and get things rolling with an $8,000 initial payment. (The latter required him to sell off most of his stock portfolio.) This cut the forebearance period down to about 6 months. : Things were going fine until April of 2001, when J lost his job. Rather than see this as a bad thing, we decided take advantage of the opportunity to pursue our dream of running a home-based web design and development business. We knew we were desperately under-capitalized, but neither of us could fathom returning to "normal" jobs (more back-story there than is even _remotely_ necessary. *s*). So we went on blind faith. Evidently, we had a bit too much faith, and failed to cut back on our expenses even remotely like we should have. By the end of May, it became obvious we weren't going to be able to make our June mortgage payment. We procrastinated on seeking assistance, counting on a couple of pending contracts to make it all better. Well...(drumroll, please) it didn't happen. At the last minute, we managed to get some money from a family member, but then we got the payment in late, thus defaulting on the forebearance agreement. : Well, at that point, we finally picked up the clue phone and realized we weren't going to be able to keep the house, regardless of whether we were able to continue the payments for a while. In our ignorance, we assumed the foreclosure proceedings would start over, thus buying us some time to build our business. Last week, we received notice via regular mail that the mortgage had been foreclosed, is now in possession of the VA, and our redemption period expires on 11/16. : We take complete responsibility for screwing ourselves with our head-in-the sand attitude. We do feel we were victims of a variety of circumstances; at the same time, we recognize we could have done a lot of things differently and more responsibly. All that is moot at this point. Right now we need to avoid becoming homeless. : Questions: : We have letters from real-estate investors. We realize we will have to sell the house for below market value; can we expect to at least pay off the outstanding balance and perhaps come out with enough to put a down-payment on a fixer-upper? (We're both handy and have construction skills and experience.) : This is a VA loan; does the VA have any programs to help AFTER foreclosure has taken place? : Assuming we are seriously...messed up...how long do we have before we're living in a box? We have very little cash on hand, but that is likely to change in the next 3 months thanks to new contracts, etc. We're willing, though not eager, to rent, but we have two dogs and three cats, and that's an issue. We don't want to give them up if at all possible. : For the record: The house is in very good shape. There are some cosmetic issues but they are things we could easily remedy ourselves; less than one week's work at most. Again, this is a VA foreclosure; the house is 3 years old; we are in Kansas (a near suburb of Kansas City); loan balance is probably about $110,000 and comparables are going for $125,000 to $139,000. : Any and all information is most welcome. If you'd prefer you can email me at mdspowell@yahoo.com. (I'm so desperate, I'm not afraid of SPAM. *s*) Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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