Day 31: First Opportunity for Notice

Credit Score: 759
Phone Calls: 9
Emails: 1
Mail: 1

First order of business, my credit score is up a point! Perhaps there’s a delay between opening a new line of credit and getting any benefit from it. It’s still only one point, but the long-run is the higher priority here, and that extra line of credit should keep my score a little more afloat.

We’re also up to a more expected level of contact from the bank. We’re getting one phone call per business day from them (generally between 10 and noon for some reason), and for some reason, they missed last Tuesday. But, it’s really manageable for us. The clever ploy of changing my contact number to the land line is paying off as the calls have only gone there thus far. We’ve turned the ringer off. :) The messages have all been exactly the same too. All recorded messages saying they have a message for me, please call back. No thanks.

Also of note, today was the earliest opportunity to receive the Notice of Default. But, since the bank didn’t contact me on Day 1 (which would’ve been silly anyway), the actual earliest day will now be Day 41 (30 days from the first phone call). However, there’s no maximum for when the bank has to give notice. Their foreclosure clocks don’t start ticking until one step after this notice. They can take their time, and they generally do. Usually that’s fine with all parties, because most often, people who have defaulted are doing it because they can’t afford it anymore, and generally want to keep their homes. When a bank delays, it means more time in their beloved home, and more time to try to negotiate.

In our case though, because we want to leave, delay isn’t so helpful. Telling the bank that, though, is even less helpful. So we wait. However long they take, we’ll stay here and stash away the money we’re saving by not paying the mortgage to save for the taxes we will eventually owe. I will be interested to see how close the two numbers end up – the tax amount and the savings.

I did more research and have determined that, unless the mortgage forgiveness bill is extended, we will definitely owe taxes. I had thought for a while that because Washington is a non-recourse state, the amount forgiven would not count as income, as suggested by the IRS.  I talked to an H&R Block guy who was entirely unhelpful. He said, pretty much, that if that was true, he wouldn’t be seeing so many taxes due on people’s forgiven loans. (That assumes the banks are doing this correctly AND that he’s doing his job correctly. Bad logic.)

I got my hopes up that maybe, even if the bill wasn’t extended, we wouldn’t owe tens of thousands of dollars in taxes. BUT, all hope evaporated when I got a little more detailed information. The loan has to be considered non-recourse when the loan was created. Because the bank has the option to pursue a judicial foreclosure – meaning they sue us for the full value of the loan – it is not non-recourse debt. It’s considered recourse debt until the bank makes the decision to pursue a non-judicial foreclosure. We’re staying under the radar hoping that happens, and we’ll know it has happened when we get the Notice of Trustee Sale on the door. The bank can still change their mind after that, but won’t as long as we don’t give them any reason to.  The earliest that could be is Day 61, but more likely it’s months and months away, maybe a year.

Until then, I keep counting phone calls and checking my credit score. Just for the sake of creating data.

PS.  We didn’t win the lottery. Saaaaad. Although, if we had, I probably wouldn’t tell you. ;)