Walking away from house with 2nd Mortgage

[ufbrad24]

My wife and I received our Chapter 7 discharge in February. We did not reaffirm our house and have been doing a ride through up to this point. Our house is about $100,000 underwater and we are considering walking away or doing a deed in lieu of foreclosure and relocating and renting for a few years. Our 1st mortgage is with Wells Fargo and the 2nd mortgage is with Bank of America ($15,000). My question is what steps need to be taken with Bank of America, if any, if we walk away from the house? Our payments for the 2nd mortgage come out of our account automatically. Should I cancel the auto withdrawal? Any advice would be greatly appreciated.

[tobee43]

My wife and I received our Chapter 7 discharge in February. We did not reaffirm our house and have been doing a ride through up to this point. Our house is about $100,000 underwater and we are considering walking away or doing a deed in lieu of foreclosure and relocating and renting for a few years. Our 1st mortgage is with Wells Fargo and the 2nd mortgage is with Bank of America ($15,000). My question is what steps need to be taken with Bank of America, if any, if we walk away from the house? Our payments for the 2nd mortgage come out of our account automatically. Should I cancel the auto withdrawal? Any advice would be greatly appreciated.

well ufbrad24...i have been attempting to get a deed in lieu for over 2 years with chase, so i don't really know if you will have any better luck with boa. for you sake i sure do! we rented a place first before we vacated our house...and we moved here to florida.

what i would do is this...if you had an atty for the bk....i would give them a call...you know it's been crazy here in florida with the foreclosures and people walking away from their homes. but, if you intend to walkaway...i wouldn't put another dime on the mortgages...however, you need to be really really REALLY careful about the auto withdrawals....go to the bank...do NOT do it on line...we didn't even have auto withdrawal...we just on occasion paid on line and you know what??? they grabbed money out of checking account claiming "auto" withdrawal...i had to go into the bank and show them they were not authorized for auto at any time...i just made on line payments...

so what i found out is, it's harder to stop the banks from taking the money based on that auto agreement. i would make certain you change banks immediately and stop the auto payment.


best of luck to you...also we started a florida discussion group since there are SO many of us here on the forum living in florida!

...http://www.bkforum.com/group.php?groupid=9

[debee]

I agree. Open a new bank account.

[tobee43]

I agree. Open a new bank account.

i would think that the "easiest" way to prevent it! these banks are BAD!

[ufbrad24]

Thank you for the responses. Our checking account is with Suncoast Schools FCU (which we love). Would it be possible to contact Bank of America to cancel the automatic withdrawal? Should I see if they would be willing to settle for pennies on the dollar? I guess I'm looking for a way to get out of the 2nd mortgage/auto withdrawal while staying with Suncoast Schools FCU. Thanks again for any help or suggestions.

[debee]

I don't know if this would work, but could you tell your CU that you have some security concerns and ask for a new account and further specify that you don't want any autopay connections, etc brought over from your old account?

[CCsAreEvil]

I'd say just call BofA and tell them you want to cancel the automatic payments. I'm pretty sure they can't refuse. You have no more legal obligation for making those payments. They can then send you paper statements (if they'll even bother with that hoping you'll keep paying), and then just don't mail in payments.

But maybe you've done/handled this by now already.

[indeep59]

I had auto withdrawal on a second loan about 2 years ago now with B of A. I requested they stop it (call in) and they did, haven't made payment since. Loan has since been discharged (Ch 7) and has since disappeared.

[Willipm]

I have a second with chase and am worried they will do something. I live in colorado and was discharged in february from my chapter 7. They have said it has discharged and may go to collections where the ca could garnish wages. Opinions? Advice? Thanks!

[ItsJustMe]

We are walking away from a house that had auto payments (BofA account, BofA loan). It was IIB 1/10 and hasn't had a payment since 11/09 and BofA hasn't touched our account at all.

[Floridagail]

Maybe the bkrtcy has protected the account by now.
Why take any chances, open a new account. BOA is not the only bank in town, I could not deal with the worry it could happen.
I left a Cu after over 30 yrs, I am happy with my new bank. The CU did not like me anymore.

[Amy26]

Thank you for the responses. Our checking account is with Suncoast Schools FCU (which we love). Would it be possible to contact Bank of America to cancel the automatic withdrawal? Should I see if they would be willing to settle for pennies on the dollar? I guess I'm looking for a way to get out of the 2nd mortgage/auto withdrawal while staying with Suncoast Schools FCU. Thanks again for any help or suggestions.

Definately do not offer them a settlement. Your obligation to these loans were washed away when you did not reaffirm the mortgages. You don't have to pay them anything. I definately agree with the other posters about doing one of two things: Ask your CU if you can open a new checking account and then close the other one or switch to another CU and get a new checking account. I do think you should be able to get the auto payments stopped but you can never be too careful.

After you stop paying them, it could take up to a year before they finally foreclose on the property or three months... hard to stay. In my situation, it took them a little over a year to repossess my condo. Also, because the debt was washed away in the bankruptcy, you should not see any public record hit your credit report for the foreclosure. My home had a first and second mortgage with two different banks and I didn't have any issues.

Also, just remember that if you ever want to buy another home the 2 year wait starts from the date of the actual foreclosure and not your discharge date from your BK.

Hope that helps a little.