Post BK/Pre FC - looking for advice

[LetsClose]

I understand the basic timeline requirements for being able to obtain a mortgage after Ch7 are as follows:
2 years from bankruptcy discharge for a VA loan
3 Years from bankruptcy discharge for a FHA loan
Somewhere between 4 and 7 years for “conventional” financing
Furthermore, one needs to have been “post-Foreclosure” or “post deed in lieu “ or ”post-short sale” for at least twelve months. This is presuming it is not a rental-type property where one would be dealing with a % of rental income, etc. This would mean you are off the deed of any other non-supportable property for a year.
Finally, one needs to show twelve months of positive payment history as it pertains to their current housing situation.
So here is where I search for a little advice. My current situation is as follows:
First ($ 1 million) and second ($ 300,000 HELOC) mortgage (originally both with Lender A) included in Ch7 bk. Filed in Dec 2009. Closed in March 2010. Last payment made in Nov 2008. Lender A started FC proceedings in June 2009. I was working with Lender A during FC process on loan mod agreement. Before agreement finalized, Lender A sold first mortgage only (Sep 2010) to Lender B.
Lender B unable/unwilling to establish loan mod with me. They now have offered me cash for a DIL. I believe that whatever cash I am being offered will be consumed in the required settlement of the second and unpaid RE taxes.
The new lender has made no recording of the assignment of the first mortgage, and has not been replaced in the FC lawsuit as the new party plaintiff.
I guess I am trying to balance the added delay in getting a mortgage in the future, as a result of staying on this current deed and not establishing a payment history, versus incurring the expense to move into an undesirable rental and begin making payments (which I am not making in the current house). How crucial is the payment history aspect to all this? Is there any other way of getting off the deed?
Thanks in advance for your thoughts.

[drowning123]

Speaking from my little experience, I called a couple of real estate agents and lenders and they all told me 2 years from BK for any type of loan program. I told them I'm still in the house and it's not foreclosed, and they all told me to save, save and save. From what I gathered from them, it doesn't matter if I've been renting or not, or that the deed is still in my name. I stopped paying in April 2010, got served a complaint in May 2011 and I didn't answer. My loan was also transferred to an affiliate of my mortgagor. Like you, the affiliate offered me a Deed in Lieu and the option to short sale. I didn't respond.

[LetsClose]

Thanks, 123. I did respond, and start discussions on DIL. It is just too difficult to work with first lender (lender A) on 2nd mortgage release. I presume it is best just to wait it out as long as possible "rent-free" and deal with the situation when the FC is final.

[drowning123]

I agree about waiting it out. That's what I'm doing. I have hypertension. Don't want a stroke. I know what it is when one's mind is not at ease. LOL. Best of luck.

[cltmoto]

From what I've heard and researched, you can't get a new loan for 2 years (FHA) or 4 years (conventional) until after the final date of the foreclosure. In your case, and again - I'm not a lawyer - the clock hasn't even started ticking yet until the foreclosure/DIL/shortsale is completed.

[Charlie777]

Everything I've researched says the rule is that the clock doesn't start ticking until the transfer of the property is complete. There are at least three options, in preference order as I see it:

The Deed-in-lieu gets the fastest removal from the deed. You could try to negotiate a lump-sum payment ("cash for keys"). You might even try to negotiate to stay in the house and help facilitate its sale as well, you would seek to have the DIL recorded immediately then live rent-free until sold with 30-day vacate clause. The house stays in better shape occupied, but is a question mark to the bank as far as how well you'll stage it for showing.

Stay rent-free as long as possible, but understand you are going to be unable to finance a home for three years from when the foreclosure is completed and the deed transferred.

The Short Sale is the worst of all worlds, IMHO. The clock is stopped indefinitely while you're at the bank's mercy in terms of how fast they will process (and perhaps not accept) a short sale offer.

A "hybrid" to try for might be this:
1. Agree to try a short sale, get the price the bank agrees to accept in writing and require them to respond to all offers in 20 days.
2. Bank to accept and record a DIL in some period if the property hasn't sold (180 days?)
3. You vacate the house 30 days after acceptance of an offer or 30 days after recording the DIL, with Cash for Keys of a stated amount ($7,000 might be a starting point to negotiate)