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 Foreclosure limbo: Staying without paying.

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jamesbradley

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Posts : 58
Position Held : Int'l Corporate Transactional Attorney

20110610
PostForeclosure limbo: Staying without paying.


Les Christie, On Thursday June 9, 2011, 9:45 am EDT

Charles and Jill Segal have not made a mortgage payment in nearly five years -- but they continue to live in their five-bedroom West Palm Beach, Fla. home.

Lynn, from St. Petersburg, Fla., has been living without paying for three years.

In Thousand Oaks, Calif., an actor has missed 30 payments, and still, he has not lost his home.

They're not alone.

Some 4.2 million mortgage borrowers are either seriously delinquent or have had their cases referred to lawyers to pursue foreclosure auctions, according to LPS Applied Analytics. Of those, two-thirds have made no payments at all for at least a year, and nearly one-third have gone more than two years.

These cases can go on and on. Nationwide, it takes an average of 565 days to foreclose on borrowers in default from their first missed payments to the final auction. In New York, the average is 800 days and in Florida, where the "robo-signing" issue is particularly combative, it's 807.

If they want to fight evictions hard, borrowers can remain in their homes even longer while their cases are being worked through.

The Segals have been doing that -- in court. They bought their home in 2003 with an adjustable rate mortgage. After a few years, their monthly payments tripled to $3,000, just as their home-inspection business was cratering.

The Segals want the bank to modify the mortgage so payments are affordable, and they think the court will agree that their lender put them into a toxic loan.

"The evidence will show that we were defrauded," said Jill Segal.

If they lose, of course, they'll finally have to leave. And, unfortunately, more than 50 months of missed mortgage payments hasn't translated into big savings.

"It's very hard to save," said Jill Segal. "Our company's billing is 90% off and my husband is only working about four days a week."

Lynn, who didn't want her last name used, purchased a two-bedroom on Tampa Bay in 1998 for $135,000.

As the waterfront property's value skyrocketed, eventually reaching $750,000, she refinanced twice (once to expand a business), and took out a second mortgage. She now owes more than $600,000 on the home, which is worth only $235,000.

Living in this foreclosure limbo is "Hell," Lynn said. "I feel like I'm locked in a box. I work for a financial organization and if this came out, it could cost me my job."

She's still hoping to negotiate the loan. In the meantime, small things bother her. "A couple years ago, I lost my dog and I can't decide on getting a new one," she said. If she has to move, she can't be sure she'll go somewhere that allows pets.

The actor from Thousand Oaks, Calif. began having problems during the screenwriters' strike in late 2007, followed by a threat of a strike by the Screen Actors Guild.

He's working with his lender toward a mortgage modification, submitting page after page of documents, which the bank has often misplaced or waited so long to examine them that they had grown too old to use.

His ideal outcome is get the loan modified and get all his late fees waived. He feels entitled to that because the bank advised him to stopped paying in the first place to qualify for one of the government's foreclosure programs. Before that, he had missed only one payment.

Meanwhile, he has cobbled together some income streams -- small acting parts, teaching acting classes and even handyman work.

"In a way, I feel like I'm lucky because I haven't had to pay any 'rent' for 30 months," he said.

But he feels like he's always under a cloud. "I haven't slept in three years," he said. "It's terrifying. I have to have the ultimate poker face in front of my kids."

Ruben Martinez, a Staten Island, N.Y., man trapped in a particularly bad adjustable rate mortgage, stopped paying more than three years ago. His attorney, Robert Brown, has managed to stave off one foreclosure.

Martinez, still struggling to find work, has little in savings despite the missed payments. He's earning some income as a pastor and consulting for a non-profit family counseling organization.

"There's pressure on me every day," he said. "I have a wife, three daughters and two grandchildren. Where are we going to live?"
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Foreclosure limbo: Staying without paying. :: Comments

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Re: Foreclosure limbo: Staying without paying.
Post on Sat Jun 11, 2011 2:50 am by cmanlarry
James,
very interesting article.
Thanks, Larry
Re: Foreclosure limbo: Staying without paying.
Post on Sat Jun 11, 2011 4:03 am by luie1177



Great article truly a pleasure to read.
This gives insight to many issues we are facing today in our society. James I
would like to speak to you about the direction of the company and the topic we
were discussing during our phone conversation. Very exciting developments have
been happening in the company. We have been receiving leads from property
owners that are looking for property management but are having trouble
converting. It's important that we build the flexibility in our business model
to accommodate other rental opportunities. Keep up the great work it's
important to share these great thoughts with others.

Foreclosure Limbo
Post on Sat Jun 11, 2011 9:47 pm by chloe07
Another thought on the matter too, as so many homeowner's are facing foreclosure there are probably a great many who also own duplexes, triplexes and quads who may also be facing foreclosure. There are many banks and lenders who then have to hire a management company to manage the properties until they are sold. Then the new owner becomes a potential client for our services.
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Re: Foreclosure limbo: Staying without paying.
Post on Wed Jun 15, 2011 11:08 am by jamesbradley
The purpose of posting this News Article is to educate everyone with the reality of the market; the problems, what the banks and mortgage companies face, and theservices & opportunities it creates. As pointed out, there are alot of people out there who needs someone to resolve their problem. If we position ourselves properly, put together a flexible business plan, allow for multiple directions, get our ducks in a row, and get properly capitalized, we can resolves some of these issues; make a name for ourselves, establish a national presents, and create Good Will both with Banks and the general public.
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Re: Foreclosure limbo: Staying without paying.
Post on Wed Jun 15, 2011 11:14 am by jamesbradley
Yes Luis, we need to talk further about what we discussed. And we need to put in place protection before discussing it with anyone else. Otherwise the idea can be stolen and you could be circumvented and/or someone having capital can run with the idea.
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Re: Foreclosure limbo: Staying without paying.
Post on Thu Jun 16, 2011 1:06 am by tropicpc
interesting article. I work with a great deal of homes that are in the foreclosure process or already forclosed. It is a very long and difficult path especially if the owners want to make it a difficult path.
 

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