11th hour lien strip

[Houseofcards]

Here goes another question regarding home values VS money owed and what to do:

We are scheduled to be at our attorney's office Monday afternoon. This appointment is for our final paperwork and filing. As of this post we still don't know if we are going to be a 7 or 13 filer.

Home values in Nevada are still dropping. Many homes here are foreclosures being held in "limbo" and not being released to the market. There are rumblings of a large quantity of homes being released for sale very soon. My opinion is that banks are holding back on these houses to keep from "glutting" the market and making values go lower.

our home was valued at 245k in April 2009

our home was valued at 219k in May 2009

these values are based on contact we have with appraissors in our area - we have not pulled the trigger yet on an official appraisal of our house.

we have a 1st mortgage which we owe 211k.

We have a HELOC which we owe 81k

I have a strong feeling that within the next 2 months our home will appraise for 210k or less.

I have this question emailed to our attorney about 10 days ago- he has not yet responded - but every other email question i have asked him he has answered within at least a couple days. I am thinking he doesn't want to answer

SHOULD WE WAIT TO FILE? -or- IS IT POSSIBLE TO FILE NOW AND SAY WE ARE LIEN STRIPPING, THEN GET THE APPRAISAL AT THE LAST MINUTE? -or- CAN YOU FILE A CHAPTER 13 AND AMEND IT LATER TO ADD A LIEN STRIP DUE TO DECREASED PROPERTY VALUES ?

Any input here would be very welcome

[lrprn]

SHOULD WE WAIT TO FILE? -or- IS IT POSSIBLE TO FILE NOW AND SAY WE ARE LIEN STRIPPING, THEN GET THE APPRAISAL AT THE LAST MINUTE? -or- CAN YOU FILE A CHAPTER 13 AND AMEND IT LATER TO ADD A LIEN STRIP DUE TO DECREASED PROPERTY VALUES ?

Discuss getting an official appraisal now before filing with your lawyer so you'll know what your house is worth on the market right now. That will tell you if you can lien-strip the second mortgage when you file or not. It's easier (and less expensive) to include the strip in the first filing than to amend the plan to add it later.

Just so you're aware, every time you amend your plan, all your creditors that filed claims get another chance (usually 30 days) to object to your newly amended plan. Chances are nothing would happen if the creditors didn't object the first time, but why chance it if it's not necessary?

[eddiep]

81k? Yeah I would wait a little longer, that would be great if you could dump the HELOC

[Houseofcards]

yeah - I figure it this way - best to get everything done at once.

We are not in immediate danger of deficiency (sp?) judgements or garnishments.

[Houseofcards]

met with Paralegal today

and have decided to wait on filing yet again.

We updated our paperwork - and asked about the lien strip a 2nd time - the first meeting we weren't even close to a low enough home value.

Today we were very close to the value being under our first mortgage - so close that we have agreed to wait on the appraisal - and file the lien strip.

We did discover that we could file now - and then re-file later to do the lien strip - but that would cost us twice as much.

Will update as we get farther through the process

thanks again for any and all input

[eddiep]

sounds like a great plan. let us know how it works out. Are you going to get the appraisal soon or are you waiting?

[Houseofcards]

will wait up to 2 more months for the appraisal - essentially will wait till the appraisal - then file the BK.

[eddiep]

That is great planning, in the long run that will save you alot of money, hope your value drops like a rock not too many people I could say that to!

[StartingOver08]

Very smart planning - you are in one of the hard hit states (California, Florida, Arizona and Nevada) - at least get the benefit of the plummeting real estate values!