Both mortgages discharged after Ch. 7, now qualify for FHA loan.

[jpracer37]

OK, I will try and make this as clear as I can without being to long. Both mortgages (BOA & Citi) were discharged in our ch. 7 and were not reaffirmed. We now qualify for a FHA loan. We have still been paying on both mortgages and are still current and up to date, which helped to show a good payment history. Now my question is, since we qualify for a new loan and other mortgages were discharged and IIB, what happens when we are ready to close and leave our old house? The mortgages have been discharged and they can still do the foreclosure proceedings, but cant sue us for any defiencies from what I've read and 2 lawyers have told me. Had to get 2nd opinion just for peace of mind. Can they report it as a foreclosure? Can we call both mortgage companies and tell them we are no longer going to pay and they can have the house? What about a Deed in Lieu of foreclosure? Can this trigger something where we would be liable for any kind of defiencies if we were to go this route just so we an get our name off of residence so we wont be liable for any kind of injuries or something if we move?

[tobee43]

a deed in lieu of foreclosure would what you were want IF you were not already approved.

most people have to wait 3 years AFTER their foreclosure dates to be able to obtain a FHA loan. since thus far there as been no foreclosure, it sounds like you are one lucky person... so if you have been approved now, i would GRAB it as quick as possible and then the subject of the what to do about the other mortgages since this new loan lender must already know about your bk and everything listed as IIB, it would really be mote, if, in fact they did foreclose after the fact. (that fact being you already rec'd a new loan).

i have heard it both ways, some report and others don't. i understand they are not suppose to since it's been already discharged, but i know or have heard it happening and being listed; you'd have to fight to get it off since they are foreclosing after the bk.

[jpracer37]

BK and Foreclosure

I'm trying to understand something here. My wife and I did not reaffirm either mortgage in BK 7, we are still current. We were pre approved for a FHA loan and had to do a conference call with both mortgage companies since our payments arent being reported to neither reporting agencies. Things I've read on here have me concerned. We were going to stop paying on old house when/if we move and call the mortgage companies to let them know they could have the house. But the things I've read sounds like a foreclosure proceeding trumps a Bk filing of a non reaffirmed mortgage that is IIB after you stop paying on it. And instead of waiting the 3.5 yrs to qualify for a FHA loan after BK filing, looks like they go 3 yrs after foreclosure even after the house was included in BK. 2 attys didnt mention this and loan officer and underwritier said nothing either. But we were still approved for the loan

[tobee43]

again, take the money and run! worry about the IIB mortgages later. ( i certainly would had i been approved.).

if you take this new mortgage and buy a new house and then let the other places go into foreclosure how do you think it effect you. after all, your bk is still on your credit report, for a total of 10 years and a FC is 7 years. so either way, they would both disappear at the same time.

what exactly are you confused about?

[jpracer37]

not worried about credit report, just worried about possible issues after new home loan and letting others go into foreclosure, even after being given the go ahead with fha loan

[tobee43]

not worried about credit report, just worried about possible issues after new home loan and letting others go into foreclosure, even after being given the go ahead with fha loan

if the foreclosure has not taken place prior to your closing on another property then there is no foreclosure to deal with. the lender i'm certain has done their due diligence prior to your loan approval. if you listed those mortgages on your petition and they were included in your bk and your bk is discharged and closed, that's it. it's done. you can walk away. you would and will be safe for any deficiency or tax ramifications since your bk is done. didnt' you say in your other thread that you also ran this by your atty???

[jpracer37]

just alot of thoughts going on right now because we dont want to lose this oppurtunity to get a better place for same amount of money we spending now on two mortgages. Was pretty much thinking once new loan went thru that nothing could be done with others since they were included in bk and discharged with no reaffirmation. Thanks alot for your comments. I feel more at ease now

[tobee43]

good, i would just jump on that loan ASAP!

best of luck to you!

[OutofTime]

I'm in the same boat except we are still doing the pre qualifying. Did your lender have issues with you not reaffirming your loan? Apparently mine was shocked I didn't reaffirm. Either way I plan on walking out of my home because I'm at a variable rate and owe more than it is worth.

[jpracer37]

Lender had no issues. I had to do a conference call w/ BOA and Citimortgage with credit service to show i was up to date and current with old mortgages. They hadnt heard of a situation like we had after BK7 since we didnt reaffirm and everything was discharged. Now we qualify for fha w/ a 3.375 FIXED rate. All I can say is stay current until you get approved so they can see your payment history.

[laurannm]

I'm pretty surprised you qualify for a loan given the situation your in....sounds like you are doing a "buy and bail" which most lenders don't allow, including FHA mortgages. Are you making enough income to support both your current and potential new mortgage?

[OutofTime]

I'm pretty surprised you qualify for a loan given the situation your in....sounds like you are doing a "buy and bail" which most lenders don't allow, including FHA mortgages. Are you making enough income to support both your current and potential new mortgage?

Wouldn't a buy and bail apply for those that never filed a bk, get a new loan, and short sale the old house? As for me, I'm trying to qualify for both homes and since my current mortgage was never re-affirmed then I plan on either letting it go via foreclose or short sale it since I owe more than it is worth.

[LadyInTheRed]

Can this trigger something where we would be liable for any kind of defiencies if we were to go this route just so we an get our name off of residence so we wont be liable for any kind of injuries or something if we move?

No. Your personal liability for those mortgages, including any deficiency, are discharged forever. The only way you could be back on the hook is if you refinance and get an entirely new loan to pay off the discharged loans.

Are you making enough income to support both your current and potential new mortgage?

If not and the new loan is actually funded, it would be the first we heard here of that happening. What we have heard is people being excited that they were approved for a loan after BK but before the old house was foreclosed on and then later coming back to tell us funding on the loan was denied. Just because a loan is approved now, does not mean it will get past underwriting.

jpracer37, I hope you do get the loan. Please keep us posted.

[jpracer37]

We went and got pre approved for new mortgage and like i said before we had to do a conference call to show we were up to date on mortgages. Got the letter last week that said we qualified for loan. Even before we went thru process we told lender about situation after BK7, told them about no reaffirmation agreement. Talked with my lawyer and he said to either short sale or do a deed in lieu. Got second opinion and they saidsame thing. I was worried about the foreclosure issue myself but doesnt seem like there is a clear answer, some say they will report it as a foreclosure some say they shouldnt be able to. But for now everything has been thru underwriter and nothing said.

[OutofTime]

Seems like it shouldn't be a problem then since you were able to show you kept up with your mortgage even though you technically could have bailed a long time ago. The reason why I would lean towards foreclose than short sale myself is that you have to still be approved for short sale and I don't have such a hardship than most people have due to buying a home at the wrong time. I'm only 50k under what it's worth but with a variable rate, i'm forced to refi and be on the hook for this house again which will not make sense since I'm at a negative. Trying to find another home with today's rate of 3.5% is the best thing we can do esp. nowthat my wife is working and we have a dual income unlike pre-bk. Please keep us updated!