Some Option – Modify, Short Sale, Deed in Lieu

From K. in Holland, MI

Thanks to everyone who has reported on this site in reading other peoples reports of problems with HFC it is comforting to know we are not alone. We too got stuck in a bad loan from HFC that we could not afford after my husband had cancer and our credit had tanked we were stuck in an ARM by a predatory lender and felt we had no option but to take the loan. They have now increased our payment to over $1800.

I tried twice to modify and was told we have $2,000 a month in disposable income. I asked them to show me how they are figuring this out he said “Well we don’t count car payments”. My reply was they must not expect me to feed my children either!

They have never provided any documentation both times I called repeatedly and was told the modification was pending then told didn’t have paperwork I sent in…..just a huge run around over all. So I called about short sale they advised me they no longer require proof of hardship are not going after deficiencies in any state but will 1099 (my home is about 60,000 over mortaged) and will pay me $2500 to get out. Then they also advised just deed in lieu as it was easier with the same benefits. I had already listed the house and so I started the short sale process a month later I called because neither myself nor the realtor had heard anything and they said “Oh yeah you should list house a lot less than you are currently” and gave me a bottom line amount they would accept.

A week later they called and wanted to start the deed in lieu process and check and make sure my title is clear. I’m completely baffled by this I wanted to make things right and was willing to pay on my home as long as it is reasonable it just seems like such a waste. So we are now trying to complete the deed in lieu process.

To anyone this has happened to there if you get a 1099C from a bank make sure you talk to a accountant there is a form with IRS valid till 2012 you can use that will exempt the debt on a primary home that was 1099’d of course you will still most likely get hit with state taxes so be prepared!