Having moved back in early 2013, (we were away 10 years), we promptly went to work to buy three short sales as the prices at the time were very opportune.
In our new neighborhood, we met a family and over the course of time, found out they were in financial distress.
Much to my surprise, I was told they had stopped making payments a year or two prior so at least in 2012.
As I was purchasing short sales, I did suggest this but the idea went nowhere with them.
Needless to say, over the past five years, I developed a reasonable relationship with the father of this family. We would occassionally talk about a wide range of topics including real estate.
When I asked how they managed to avoid foreclosure for 5-6 years, he would say things along these lines:
my wife takes care of this
or “we went to a seminar where an attorney told us if we resubmit loan modification documents” that the bank would restart the clock on the foreclosure.
He also made a cryptic comment that some government program might be paying the mortgage when they submitted the modification documents.
I don’t think they filed for bankruptcy but it has just intrigued me that they managed to put this off for so long. For a while I thought perhaps the bank had defective documents and couldn’t foreclose but they finally did in December and now the house is being resold. The bank is Wells Fargo which bought it but the original loan was a Bear Sterns loan from 2008.
I’m tempted to call a broker at Wells Fargo I used to work with who may be able to provide some background.
Has anyone heard of a foreclosure being delayed so long in California?
Delaying a foreclosure that long is almost routine when you have a homeowner intent on delay and a disorganized bank team. More common in the 2008-2012 period however.
Ultimately the bank benefited by getting the property in 2018 instead of 2013. The homeowner might even get some cash after the sale if it covers the loan and costs.
We tried to buy a house when we moved back here that was on the verge of being foreclosed on. The mortgage was held by the wife, who, after a divorce, had gone to live elsewhere, with the ex husband and kids remaining in the house. He became a squatter, alleged that the house had been transferred in trust to the kids, filed for bankruptcy 2-3 times and I can’t remember what else. We gave up after a month or two of the shenanigans and bought another house in the neighborhood. Later the house was purchased at a foreclosure sale and the owner evicted him. This guy had more tricks up his sleeve than most. In my mind, the bank was reluctant to actually take a stand, but maybe they knew what they were doing ….
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