Chapter 13 Mortgage Lien Strips.

[Lajazz947]

Who actually determines my home value? Broker opinion or appraiser or both?

If I used Zillow my house is worth more than my first. House done the block a little smaller sold for much less.

House across the street , missed 34 payments, on short sale , little bigger but nicer, worth much more than mine.

Who knows what house is worth but with so many different values and choices what can I expect?

Thanks,

[justbroke]

Anyone can determine the price. You or I could come up with a price. However, is that best evidence? The more experienced and licensed an appraiser is, the best his/her "expert" testimony would suffice in a trial in court. An appraisal on the Uniform Residential Appraisal Report (URAR) form with the necessary license information trumps a BPO, a CMA, and Zillow anyday of the week. In court the sworn testimony of the most reliable witness is usually the best evidence.

My personal opinion is that if you're going to do a lien strip, then get a full appraisal performed by a licensed appraiser (for your State) and on form URAR. When you present Zillow and other valuations (including BPOs, CMAs and even property tax assessments) they almost always will be challenged. An appraisal sets the bar short of testimony of a licensed professional in court.

I think it's worth the $250-400 for the appraisal for a lien strip. Some people will use a CMA (comparative market analysis from a realtor) for an initial estimate, but submit a URAR as evidence (attached as an exhibit) to the lien strip request.

[ms67]

Got a Lien Strip - Now might be moving

We are in Maryland, filed a 13 to catch up on arrears on 1st and strip 2nd. No objection from 2nd. House was appraised at 250k. owe approx 375k on 1st. 2nd that was stripped was 84k.
Have a possible job opportunity out of state. would have to move (and rent). Can I drop the 13 and let the 1st have the house? What happens to the 2nd?

Majority of the 13 is the arrears - only a couple of other small debts that I could cure.

Thanks,

[HHM]

You might not be able to just "drop" the 13. The Goal of BK is a discharge, and you NEED to get a discharge one way or the other.

So, you have 2 options.
1. If your new income will allow, convert to chapter 7, surrender home, and get your BK discharge.
2. Stay in chapter 13, modify your plan to surrender house, and adjust payment accordingly.

Just simply dismissing your case is probably a bad idea. If you do, the debts become alive, and when the house eventually forecloses, you may be responsible for the difference. As such, your goal right now is to figure out how to get to your BK discharge in the least costly way as possible.

[ms67]

So even if the only thing left in the BK is less than $5,000 in debt it is still better to keep the BK in order to not be responsible for the mortgages on the house? That makes sense. Thanks

[patrickmead]

Chapter 13 bankruptcy is for two situations: (1) You don't qualify for a chapter 7 (your income is too high); or (2) You are in foreclosure and need to pay back arrears.


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[patrickmead]

Also, 85% (according to the NACBA) of ALL chapter 13 Plans fail because people just stop paying. No one knows the reason!

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[jrny2freedom]

I am 4yrs into my Ch13 (exactly 12mos repayment to go). When I filed I provided the required appraisal of my home. I had a Wellsfargo HELOC and was current on the payments. It was NOT included in my plan (not sure why it was not as it was submitted as a loan). For some reason the loan went away from my list of loans on my online account. I have been recently told by a friend who is a WF Bank manager that it was most likely stripped, though I did not ask nor go through the process to have it done. Can anyone tell what could have happended to it? Will I get a surprise when I reach the end of this long road in 12mos?

[justbroke]

It could not be stripped unless you filed a Motion to Determine Secured Status and Avoid (Strip) Lien and the motion was granted. Since you are in bankruptcy, the lender stopped reporting the status of the loan in order to prevent any issues with the Automatic Stay. When I filed Chapter 13 and for the 20 months thereafter, my lender never reported anything "new" on my mortgage. It was listed as, and still is listed as, included in bankruptcy (IIB), and has been since I filed.

If you want to know for sure, ask your attorney.

[jrny2freedom]

OK. Thanks Justbroke.

[lg11105]

I got Appraisal from Property Appraiser for 165K on my Primary Residance in Palm Beach, FL and my 1st Mortgage is 195K and 2nd HELOC from a Credit Union.
I just finished 341 Meeting and wiating for my Plan Cofirmation but the Credit Union filed objection for Lien Strip.
What could be the result ?

[LadyInTheRed]

I got Appraisal from Property Appraiser for 165K on my Primary Residance in Palm Beach, FL and my 1st Mortgage is 195K and 2nd HELOC from a Credit Union.
I just finished 341 Meeting and wiating for my Plan Cofirmation but the Credit Union filed objection for Lien Strip.
What could be the result ?

Your plan will probably not be confirmed until the lien strip is resolved. There will be hearing where both sides present evidence regarding the vale of the property. The judge will decide which evidence is more convincing and make a ruling. If the judge does not grant the lien strip, you will probably need to amend your plan to pay the 2nd as a secured creditor. Or, you might also decide to abandon the home.

[lg11105]

Thanks LadyInTheRed for your reply.
Do I need to go to the hearing personally or my attorney should take care of it.

[LadyInTheRed]

Thanks LadyInTheRed for your reply.
Do I need to go to the hearing personally or my attorney should take care of it.

You most likely will not have to go. But, ask your attorney to be sure.

[dmc-2008]

Lady, would the payment go up that you have been paying or would it come out of current payment? Thanks so much!