Left a Good Paying Job to Follow My Dream. Now Laid Off and Facing Foreclosure.

“Dear Andy,

Left good paying job, Manager Financial AD Hoc Reporting, Harvard Univ. 2006 followed dream worked as an Animal Control Officer and then lost job to “regionalization” of the position in 2/2009. In 6/2009 my daughter entered a partial hospitalization program for her mental issues. She was home-bound for 18 months and is now participating in a full-time day program.

I have made maybe 6 monthly payments on my mortgage in 24 months, its really a miracle that we are still here. I am finally divorced after 11 years…we still currently have a protection order on him. I have no resources and no job. Foreclosure date 6/21/2011. This is a 10 acre farm in Amesbury MA. Wells Fargo has added $88k+ onto the principal balance through last minute agreements that I did sign.

I do not believe there is anything anyone can do for us but thought maybe in your experience you might have some ideas. They at one time offerrred for me to rent from them. I am looking for how to get deed in lieu of foreclosure so I don’t also get killed by taxes. Any advice on how to move on as we have no place to go after foreclosure but I understand that is out of your spectrum of services. I am currently working on having my resume “professionally” rewritten….I understand without a job ther is nothing anyone can do but yet we still exist.

Do not believe there is anything anyone can do for us but thought maybe in your experience you might have some ideas. They at one time offerrred for me to rent from them. I am looking for how to get deed in lieu of foreclosure so I don’t also get killed by taxes. Any advice on how to move on as we have no place to go after foreclosure but I understand that is out of your spectrum of services. I am currently working on having my resume “professionally” rewritten….I understand without a job there is nothing anyone can do but yet we still exist.

Becky”

Becky,

It sounds like you really have your hands full right now. Most importantly for you will be finding a steady source of income, regardless of what happens with the home, you will need this. I know it’s not easy here in MA, but keep plugging away, something will pan out.

I’m not exactly sure why WF added $81k into the balance of your loan. That is normally what they do when they modify a loan. They capitalize the arrears (past due) and add it to the balance. Could they have possibly offered you a modification?

You mention a foreclosure date of 6/21. I’m not sure if that means that you have an auction date where they intend to take back the home, or if that is the date that the loan will go into “active foreclosure”. Big difference. If it is an auction date it will certainly limit your options. In order to postpone an auction date with WF you will either need to have your home in review for modification or have the home on the market as a short sale, with an accepted offer in place. That gives you about 6 weeks and if the home is priced right, it’s possible but it would need your immediate attention. If 6/21 is the date that your loan is going into “active foreclosure” than you have more time, in MA the FC process can take 3 to 6+ months and that would allow you to get the home on the market as a short sale, without such a pressing deadline.

To do a deed-in-lieu of foreclosure with WF it requires that you have had the home on the market for at least 90 days, before they will even consider it. They want to see that you have at least tried to sell the home. Even then there’s no guarantee they will approve the deed-in-lieu. Either way, both options involve getting the home up for sale to begin.

As for the tax issues, you should speak with a tax professional to explain the difference between short sale, deed-in-lieu, and foreclosure. I do know that until 12/31/2012 you may be exempt from any tax implications for the forgiven debt under the Mortgage Forgiveness Debt Relief Act. The IRS has put together a great FAQ that answers any questions you may have here.

If you still have questions or would like to keep us updated on your progress please post them in the comment section below. I am subscribed to this post and will do my best to answer any questions promptly. Also seeing that you’re right here in MA with us, feel free to give our office a call anytime. Just ask for me. Best of Luck!

Best Regards,

Andy is a licensed real estate broker in Massachusetts and is the founder of Northeast Properties in Norton, Massachusetts. His brokerage is designed to help homeowners in today’s difficult real estate market, specializing in short sales. Andy speaks with Massachusetts homeowners every day, helping them to address their questions or issues with short sale or loan modification. He enjoys helping consumers arrive at the correct solution to their problem, and believes that the only way to correctly do that is by presenting them with all of their options in an un-biased manner.

If you have a mortgage, short sale, real estate, or loan modification question you’d like to ask just use the online form. I’m happy to help you totally for free.