Foreclosure Nightmare with USDA/2nd lienholder

[txmomof2]

What is the name of your state? TX.

I wrote some months back (almost a year ago) about the foreclosure on my house that was originally financed through USDA. I also had a 2nd lienholder.

My problem now is this.....

I'm no longer in the house- moved out July of last year. Notified both parties that I had moved (ahead of either of them making me move).

I have received NO correspondence whatsoever from USDA. Not a bill, not a demand letter, nothing. As far as I know, they have not foreclosed.

I did notice on my county's tax website that the 2nd lienholder changed the tax records to reflect them as the owner on the house on 8/2/05.

Fast forward to a week ago. I get an email, then a letter from the 2nd lienholder. The email stated they were sending me a contract to sign, in effect- signing over the house to them, they pay USDA, then fix and flip the house.

What I find unfair is this: The house was evidently vandalized long after I moved (I ran into my old next door neighbor)- but part of this, I feel, is the lack of action on the part of the 1st and 2nd lienholders to not secure the house. When I left, the house was locked. I know that historically, when houses in my neighborhood went empty due to foreclosure (the whole neighborhood was a new subdivision built and financed by USDA- all the houses that have been left have been due to foreclosure, because trying to refinance and/or sell is next to impossible when dealing with USDA), they were vandalized. I notified both USDA and the 2nd lienholder that this was likely.

Now, my house is tax valued at 80,000. A (second lienholder) is trying to get me to sign to an agreement that they will 'buy' the house for 45,500, pay that to USDA, then I'm on the hook for 25,000 (balance- you can live in a house through USDA for 10 years, and you will end up owing more than the original price of the house).

If I don't sign, then USDA forecloses and gets ? How do they determine their asking price?

I emailed A back and asked how the 45,500 figure was arrived at, given the value of the home. He stated it was due to damage that would run in the range of 10,000-15,000 (I don't believe that- looking at the photos he sent me, it looks like sheetrock damage- not structural/electrical, etc).

My option is to sign nothing- and let USDA take the lead. Or, sign and be on the hook ANYWAY.

Problem is, when you finance through USDA and get foreclosed on or behind, they can and WILL take any and all tax refunds, garnish wages, etc. It's not a matter of them suing me, they WILL take their money.

I feel like it's a screwjob, but I'm not sure what to do.

And just for future reference, if I decided in the future to file for bankruptcy, what would or could that do to the balance owed USDA?

[seniorjudge]

Originally Posted by txmomof2

What is the name of your state? TX.

I wrote some months back (almost a year ago) about the foreclosure on my house that was originally financed through USDA. I also had a 2nd lienholder.

My problem now is this.....

I'm no longer in the house- moved out July of last year. Notified both parties that I had moved (ahead of either of them making me move).

I have received NO correspondence whatsoever from USDA. Not a bill, not a demand letter, nothing. As far as I know, they have not foreclosed.

I did notice on my county's tax website that the 2nd lienholder changed the tax records to reflect them as the owner on the house on 8/2/05.

Fast forward to a week ago. I get an email, then a letter from the 2nd lienholder. The email stated they were sending me a contract to sign, in effect- signing over the house to them, they pay USDA, then fix and flip the house.

What I find unfair is this: The house was evidently vandalized long after I moved (I ran into my old next door neighbor)- but part of this, I feel, is the lack of action on the part of the 1st and 2nd lienholders to not secure the house. When I left, the house was locked. I know that historically, when houses in my neighborhood went empty due to foreclosure (the whole neighborhood was a new subdivision built and financed by USDA- all the houses that have been left have been due to foreclosure, because trying to refinance and/or sell is next to impossible when dealing with USDA), they were vandalized. I notified both USDA and the 2nd lienholder that this was likely.

Now, my house is tax valued at 80,000. A (second lienholder) is trying to get me to sign to an agreement that they will 'buy' the house for 45,500, pay that to USDA, then I'm on the hook for 25,000 (balance- you can live in a house through USDA for 10 years, and you will end up owing more than the original price of the house).

If I don't sign, then USDA forecloses and gets ? How do they determine their asking price?

I emailed A back and asked how the 45,500 figure was arrived at, given the value of the home. He stated it was due to damage that would run in the range of 10,000-15,000 (I don't believe that- looking at the photos he sent me, it looks like sheetrock damage- not structural/electrical, etc).

My option is to sign nothing- and let USDA take the lead. Or, sign and be on the hook ANYWAY.

Problem is, when you finance through USDA and get foreclosed on or behind, they can and WILL take any and all tax refunds, garnish wages, etc. It's not a matter of them suing me, they WILL take their money.

I feel like it's a screwjob, but I'm not sure what to do.

And just for future reference, if I decided in the future to file for bankruptcy, what would or could that do to the balance owed USDA?

You defaulted on two loans and abandoned a house.

Why should anyone want to work with you?

[txmomof2]

Originally Posted by seniorjudge

You defaulted on two loans and abandoned a house.

Why should anyone want to work with you?

How helpful, thanks so much.

Evidently, you have never dealt with USDA- I tried to work with them for a good 18 months before being foreclosed on. I paid for two appraisals to try and get the house refinanced, I did research on USDA's Rural Housing website and in their handbooks to resolve this issue as best I could. Problem is, USDA doesn't follow their own policies.

So the situation turned into a problem where I couldn't stay in the house and had to move. I would rather have moved, and had it resolved quickly rather than have the house sit empty for almost a year. I tried dealing with USDA in regards to listing the house- but maybe you didn't read above that no house in my particular subdivision has ever sold successfully when dealing with USDA. This has been confirmed not just by history, but the realtor I talked with a year ago, the refinance people I talked with over a year ago, etc.

Point is, I certainly don't need to be reminded of what I did or didn't do- I don't see how that resolves ANYTHING.

thanks again.

[pojo2]

Point is, I certainly don't need to be reminded of what I did or didn't do- I don't see how that resolves ANYTHING.

Proves you are not a very reliable solution for those dealing with you because as stated you defaulted then walked away. Perhaps, perhaps not your only choices but thems the facts.

I feel like it's a screwjob, but I'm not sure what to do.

Did they screw you or did you screw yourself? Do now what you should have done over a year ago and hire an Atty to see if there is ANY resolve for you.

[txmomof2]

Originally Posted by pojo2

Point is, I certainly don't need to be reminded of what I did or didn't do- I don't see how that resolves ANYTHING.

Proves you are not a very reliable solution for those dealing with you because as stated you defaulted then walked away. Perhaps, perhaps not your only choices but thems the facts.

I feel like it's a screwjob, but I'm not sure what to do.

Did they screw you or did you screw yourself? Do now what you should have done over a year ago and hire an Atty to see if there is ANY resolve for you.

My point is, what I did or didn't do is irrelevent NOW, isn't it? I didn't just 'walk away' one day - I did many MANY things to resolve this issue so that I could KEEP my house- the ONLY option an atty gave me when I called one LAST YEAR was to file bankruptcy.

As far as the screwjob- a little of both I suppose. I screwed myself by even buying a house through USDA/Rural Housing. They screwed me in the sense that I now "owe" $17,000 MORE than the original loan value when I bought the house in 1994. Let's not misunderstand, I didn't buy this house and leave it or lose in 2-5 years. I was there almost 11 years. I didn't intend, when I bought it to lose the house. My "leaving" voluntarily wasn't so much me 'abandoning' the house as it was not being willing to come home and lose my things for being locked out.

I don't think anyone who comes on these boards come to be told what they did wrong- I asked a question- what to do in regards to the contract sent to me by the 2nd lienholder. Who enjoys foreclosure? Who can say WHAT someone's individual circumstances can be down the line?

I believe the rate of foreclosure has actually continued to climb ..... and do you believe this is just because people 'walk away'? No.

anyway, so if anyone can give me a simple answer- or at least some advice as to what to ask an atty (oh, and as far as your recommendation to hire an attorney which is what I should have done LAST YEAR- hmmmm, let's see, if I'm in foreclosure- where do you suppose money for an attorney comes from?).....

[seniorjudge]

Originally Posted by txmomof2

My point is, what I did or didn't do is irrelevent NOW, isn't it? I didn't just 'walk away' one day - I did many MANY things to resolve this issue so that I could KEEP my house- the ONLY option an atty gave me when I called one LAST YEAR was to file bankruptcy.

As far as the screwjob- a little of both I suppose. I screwed myself by even buying a house through USDA/Rural Housing. They screwed me in the sense that I now "owe" $17,000 MORE than the original loan value when I bought the house in 1994. Let's not misunderstand, I didn't buy this house and leave it or lose in 2-5 years. I was there almost 11 years. I didn't intend, when I bought it to lose the house. My "leaving" voluntarily wasn't so much me 'abandoning' the house as it was not being willing to come home and lose my things for being locked out.

I don't think anyone who comes on these boards come to be told what they did wrong- I asked a question- what to do in regards to the contract sent to me by the 2nd lienholder. Who enjoys foreclosure? Who can say WHAT someone's individual circumstances can be down the line?

I believe the rate of foreclosure has actually continued to climb ..... and do you believe this is just because people 'walk away'? No.

anyway, so if anyone can give me a simple answer- or at least some advice as to what to ask an atty (oh, and as far as your recommendation to hire an attorney which is what I should have done LAST YEAR- hmmmm, let's see, if I'm in foreclosure- where do you suppose money for an attorney comes from?).....

Q: My point is, what I did or didn't do is irrelevent NOW, isn't it?

A: It is still exceptionally relevant.



Q: anyway, so if anyone can give me a simple answer

A: The simplest answer is to pay your bills. If you can't do that, then declare bankruptcy and the rest of us will pay your bills.

[txmomof2]

Originally Posted by seniorjudge

Q: My point is, what I did or didn't do is irrelevent NOW, isn't it?

A: It is still exceptionally relevant.



Q: anyway, so if anyone can give me a simple answer

A: The simplest answer is to pay your bills. If you can't do that, then declare bankruptcy and the rest of us will pay your bills.

That's exactly why I didn't file for bankruptcy SIR/MAAM.....Duh.

Once again, I tried to refinance and was stonewalled by USDA. Not because I didn't have the credit to do it, not because the house wasn't appraised high enough, but because USDA doesn't follow their own policy when it comes to refinancing a loan.

I could sit and list out the number of times I called, dates, times, who I spoke with and the number of DIFFERENT answers I received each time, the number of emails, etc. I never once gave an impression that I didn't want to get all this taken care of without having to 'walk away' or file bankruptcy.

I could sit and provide information in regards to the appraisals, and the information gathered when trying to put the house up for sale, rather than have it foreclose. This wasn't all done when I got notification from the 2nd lienholder- oh no- I started that process a good year before all this even happened.

Getting a layoff notice from your job will make you get up and start trying to figure other things out BEFORE the layoff takes effect.

I'm not sure why so judgemental- I suppose when people come in here in desperate situations, they should be expected to be berated for LIFE happening to them. But thanks again, your words of support are exceptional and help loads.

[pojo2]

I believe the rate of foreclosure has actually continued to climb ..... and do you believe this is just because people 'walk away'? No.

No, it is because the majority are irresponsible in handling their financial affairs. No, it is because some people want to live waaaay beyond their means then cry foul when it catches up.

for LIFE happening to them.

Life happens to everyone and the difference is those who would whine "poor ole me" and those who get off their asses and do something about it.

Want to hear something funny, that Atty who told you to file BK was probably giving you VERY GOOD advice! Heck what is one more load of debts for us to all assume!

[txmomof2]

Originally Posted by pojo2

I believe the rate of foreclosure has actually continued to climb ..... and do you believe this is just because people 'walk away'? No.

No, it is because the majority are irresponsible in handling their financial affairs. No, it is because some people want to live waaaay beyond their means then cry foul when it catches up.

for LIFE happening to them.

Life happens to everyone and the difference is those who would whine "poor ole me" and those who get off their asses and do something about it.

Want to hear something funny, that Atty who told you to file BK was probably giving you VERY GOOD advice! Heck what is one more load of debts for us to all assume!

Obviously, I'm not going to get an actual answer/opinion or advice. Pojo2, I'm not sure where you are from, but I know that in my area- many have lost homes, cars, etc- due to loss of jobs and other unforseen emergencies. Please believe, it wasn't all people who are trying to keep up with the Jones'......I hope you aren't inferring that was my problem, since I have no car payments, etc- but I guess getting laid off of a job due to privatization is MY fault, right?

I sure hope that nothing like that ever happens to you**************

As far as the bankruptcy- obviously, I didn't want to do that- I'd rather not give you more loads of debt to "assume"......can't you see that?