You may wish to consider the information provided on this Blog...http://www.trulia.com/blog/hannah_fliegel/2010/03/what_is_a_
"If you are considering defaulting on a mortgage.. in order to protect your credit you want to send your lender or servicer a Qualified Written Request. This must be sent to the Customer Service Department of your lender or servicer. This is incredibily important that you send the Qualified Written Request correctly to the lender and to the correct department.
If the lender does report a borrower late while the QWR is in action, the lender will have a penalty of $1,000. due to the borrower. I had two borrowers with two mortgages, the lenders reported the borrower's late seven times. Each borrower was awarded with damages of $42,000.! "
There seem to be many quality control checks in the makinghomesaffordable.gov process which adds to delays and frustration. I would assume at the 7 th trail payment you are at the last stage of the process.
The bottom line is if you are looking for a principle and interest payment less than 31% of your gross income, that will not happen under the Obama plan. It will not make much differnce what else you try or want. There are specific restrictions / guidelines that the servicers must follow or else they will loose. The reason for the Quality Contol Checks are to ensure the plan will pass and audits!
If you can avoid foreclosure I sure would do that, because that will be with you for a long time (5-7 years) and effect your credit by 200-300 points. Look at your other options and if the modification makes sense, hold on and get it approved.
First Weber Group
Certified Distrssed Property Expert
You can try the government's new mandatory mediation program. Its a $200 fee to select. It may or may not be helpful to you, or at least they can help you get approval for a short sale which may take less of a hit on your credit. There is talk the new rules will allow you to go back to mediation, and have a guaranteed outcome one way or the other.
Also, there is talk that with so many people in this situation, that credit rules may (in the future) accommodate people who had to sell their property as a short sale, rather than let it go to foreclosure, allowing you to buy in again in a much shorter period of time.
If you'd like me to recommend a short sale expert in your area, don't hesitate to contact me.
Rosen & Company West
You live in Josephine County, so your closest contact, for foreclosure help by county, would be Grants Pass. The number to call would be 479-2601. This is the ONLY free loan modification and foreclosure prevention counseling certified by the State of Oregon for Josephine county. Any other loan modification company can claim they will help you for free but it is not true.
You may or may not know, but the trial period loan modification does report your mortgage payment was not made in full and your credit report already reflects the delinquency. In 2005, the FACT ACT became law and you may now request a free copy of your credit report once per year. You must do this through one of the 3 main credit bureaus directly. You can do this here http://www.experian.com/consumer/facta.html
Wells Fargo is pretty clear you must your home listed on the market for 90 days before they will entertain a short sale but a short sale is better even if the wait time, to purchase, is the same time frame as a foreclosure. Reasons are mentioned in Bob's answer... when applying for a mortgage loan, you will be asked if you ever have directly or indirectly been obligated on a loan which resulted in foreclosure. If by chance you are a veteran, it is a 1 year waiting period, if extenuating circumstances has occurred such as loss of employment or a medical issue, otherwise, after 2 years. Facts need to be verified if due to extenuating circumstances out of the borrower's control. If the previous foreclosure was on a VA loan, full entitlement will not be given. Whatever remaining entitlement (from the previous VA Certificate of Eligibility, is all the veteran can use for the new loan.
To clarify some information, you live in a USDA approved area. Your buyer can purchase your home for zero down as long as they qualify for the program & your home is not a manufactured home. In addition, regardless if you short sale or go through foreclosure, USDA allows for a zero down purchase after 3 years as long as you qualify for the remainder of their guidelines.
Ambient Home Lending - Lending throughout the State of Oregon
You do not want to walk away check this out:
Ramifications of Foreclosure, Short Sale or Deed-in-lieu-of-foreclosure
Here are some of the ramifications of foreclosure, short sale or deed-in-lieu-of-foreclosure, there are many more like your job, yes employers are checking credit records these days.
Your credit score will be reduced by 200-400 points, short sale a little less 100-200 points.
All forms of foreclosure stay on your credit report for 10 years.
After you have gone through foreclosure, short sale or deed-in-lieu-of-foreclosure there will be what is known as the "waiting period", this period of time varies for each and can be reduced if you had some type of extenuating circumstances that caused the foreclosure:
Waiting Periods to Buy After Foreclosure
* Buying After a Foreclosure
The waiting period is 5 years up to 7 years.
* Buying After a Foreclosure with Extenuating Circumstances
The waiting period is 3 years up to 7 years.
* Buying After a Deed-in-Lieu of Foreclosure
The waiting period is 4 years up to 7 years.
* Buying After a Deed-in-Lieu of Foreclosure with Extenuating Circumstances
The waiting period is 2 years up to 7 years.
* Buying After a Short Sale
The waiting period was just upped from 2 to 3 years. However, if a seller does not have a 60-day late pay, that seller may immediately buy another home. It's a reason to stay current on your payments while the home is on the market as a short sale.
In addition to the waiting period, most loans require a minimum down payment of 10% and a minimum FICO score of 680. The home purchase must also be the principal place of residence, not a rental nor a vacation home.
Lastly, most loan applications will ask the dreaded question "Have you ever been foreclosed on?" this stays with you for life, many think that because it will not show up on the credit report after 10 years they can answer "no", well lying on a loan application is a felony that carries a major jail term, so be aware.
There are two types of foreclosures. Non-Judicial or Judicial. In your state of Oregon if the property is located there, most likely the lender will foreclosure by Non-Judicial foreclosure process which is better if you are doing a "strategic Walkaway"
If your loan is a non-recourse loan such as a purchase loan and you only have one loan on the property then yes..if you walk away you are free and clear. UNDERSTAND. If your lender forecloses by Non-Judicial Foreclosure and you have a Non-Recourse loan then you are off the hook without a deficiency. The lender has NO legal right to come after you. You need to look at your loan documents to confirm what type of loan you have and confirm how the lender in your state forecloses.
If your loan is a recourse loan...refinanced you have two or more loans on the property then you are not off the hook without the possibility of a deficiency judgment. The lender can foreclose and then go after you for a deficiency if the lender has the legal right to go after you they will...they have the obligation for the investor on the other end.
It would be in your best interest to grab your loan docs and head down to the Hud Office in your area to speak with a Hud Counselor.
They can assist you in understanding what type of loan you have recourse or non-recourse and provide you with a recommendation of a short sale, or loan modification.
In my opinion it always makes more sense to attempt a short sale vs. a strategic foreclosure. Here is why.
FOR FREE, you will have an advocate negotiating the short sale process for you. They speak with the lender for you, negotiate the debt for you, assist you with the short sale packet to present the bank. You typically get more time in the home rent free. You also get an opportunity to negotiate the debt for FREE to you. This way if you do have a recourse loan you can possibly get out of debt moving forward. Regarding credit, a short sale is less of a credit hit especially if a QWR is sent with the short sale packet to the lender. Finally, you can get a new institutional mortgage 24 months after a short sale or sooner whereas, you have to wait 36 months after a foreclosure FHA. Therefore, you can return to home ownership quicker this way.
The Credit Repair Expert
Certified Buyer Representative
Senior Real Estate Specialist
Century 21 Princeton Properties
Your best bet is to sell the home. Even if it's not worth what you owe, a good short sale negotiator can make sure that when the sale closes you are not only forgiven for any responsibility to the debt (on both a 1st & 2nd), but they can also make sure that you will also have no further liability for the deficit in the form of a 1099 to declare as income. This route will help your credit bounce back a little faster so that when you get back on your feet again, you will hopefully be able to purchase another home sooner than a foreclosure will allow.
I work with a company by the name of LHI Real Estate and you may want to give them a call. They do what they can to try to keep people in their homes and don't charge you anything for that conversation and may have some options for you. They specialize in distressed properties. If they can't help you stay in the home, the next step they can help with is negotiating the short sale on your behalf with your bank. The fee for that service is paid for by the buyer so again costs you nothing. Call and talk to Jim Lerman @ 503-892-1966 and tell him I gave you his number. He's done some amazing things for my clients!
Kelly Gebler, Broker
Keller Williams, Realty
Q. I have heard conflicting information regarding the banksâ€™ ability to have a deficiency judgment against the seller of a property in a short sale and the banksâ€™ recourse against that seller/borrower. Will you please clarify and address Oregon Law regarding recourse vs. non-recourse?
A. There is no recourse or non-recourse in the â€œdeficiency judgmentâ€ sense in a short sale because there is no judicial foreclosure. A short sale involves the voluntary modification of a legal debt obligation and therefore can contain any terms the parties want. Recourse and non-recourse is about the ability to seek a deficiency judgment in a court of law under state foreclosure statutes. In a voluntary modification (like a short sale) the "deficiency" is the unpaid balance of a note. A note holder can sue on the unpaid balance of a note unless the maker of the note bargains for and gets "full satisfaction" of the note instead of just the note holder's agreement to waive their lien and not foreclose. To get full satisfaction you usually have to ask for it. Otherwise, the lender can waive their lien, forego foreclosure and continue to hold the note. With the note comes the right to the unpaid balance as personal debt no longer associated with real property. The reason you hear conflicting information is that the difference between foreclosing on property and bargaining for modification of a debt witnessed by a note is not well understood.