I have a couple house/mortgage questions...

[indebt00]

at what point does the trustee think your mortgage is too much? is it a % of your net or gross? My family member is worried about that because they bought their house about 1 yr ago at our neighborhood's high point.
the payment is about 40% of their net income.
they absolutely want to keep the house...should they be concerned??

along those lines...they rent out their old house because the market tanked. they plan on giving it up but what happens with the rent money (is it considered in the past income???)

and what about the renter...can they break the lease early and tell them they have to move out???

thanks for any insight you guys have.

[justbroke]

at what point does the trustee think your mortgage is too much? is it a % of your net or gross?

There is no magic number. Mine is like 45% of my income, including principal, interest, taxes and insurance. Not even a blink by the Trustee. This will vary by District and Trustee. I'm paying nothing (0%) to unsecured creditors. I thought someone would complain, but no one did.

along those lines...they rent out their old house because the market tanked. they plan on giving it up but what happens with the rent money (is it considered in the past income???)

Yes, to the extent that it offsets the expenses of having that "old house". For example, if the rent is $1,000 and their debt service for the "old house" is $750, then they have a net income of $250 a month.

and what about the renter...can they break the lease early and tell them they have to move out???

I wouldn't do anything until they actually file.

[winona55987]

Related question.

I am trying to reaffirm with former countrywide mortgage current BofA to reaffirm my first mortgage. Does anybody have recent experience as to when we receive the reaffirmation agreement.

thanks

[DeadManCrawling]

Related question.

I am trying to reaffirm with former countrywide mortgage current BofA to reaffirm my first mortgage. Does anybody have recent experience as to when we receive the reaffirmation agreement.

thanks

Expect to receive the paperwork sometime between now and the sounds of the trumpets of the Four Horsemen Of The Apocalypse.

Seriously.

I have been working with BoA/CW on a mod since last November. They have us on record, now, as having received four mods. Oddly, they have never sent us paperwork. We have sent them tons, to about 6 addresess. We have also faxed and emailed the same documents.

All I can say is good luck and God help you!

[lrprn]

Related question.

I am trying to reaffirm with former countrywide mortgage current BofA to reaffirm my first mortgage. Does anybody have recent experience as to when we receive the reaffirmation agreement.

thanks

Winona, please stop posting the same question more than once in different threads or starting a thread to ask a question you've already asked. It's against our forum rules.

In the future, please start only one thread or ask the same question only once in one place. Spreading the same question around in different threads just confuses everyone and in the long run you get less quality responses.

[indebt00]

There is no magic number. Mine is like 45% of my income, including principal, interest, taxes and insurance. Not even a blink by the Trustee. This will vary by District and Trustee. I'm paying nothing (0%) to unsecured creditors. I thought someone would complain, but no one did.

Yes, to the extent that it offsets the expenses of having that "old house". For example, if the rent is $1,000 and their debt service for the "old house" is $750, then they have a net income of $250 a month.

I wouldn't do anything until they actually file.

they are actually in the negative by $300 a month...mortgage is more than lease. does this help them any???

[justbroke]

they are actually in the negative by $300 a month...mortgage is more than lease. does this help them any???

It hurts them. You can not use a negative amount on the means test. In other words, on the Means test, there is a spot for rental income. You deduct the cost of maintaining the property (principal, interest, taxes, and insurance and maintenance costs) form the amount received as rent. If it's negative... you put "$0.00" on that line.

[eddiep]

Related question.

I am trying to reaffirm with former countrywide mortgage current BofA to reaffirm my first mortgage. Does anybody have recent experience as to when we receive the reaffirmation agreement.

thanks

I think our bk was closed today (I don't have pacer) but BOA never offered a reaffirmation agreement, I wanted one too. Oh well

[eddiep]

at what point does the trustee think your mortgage is too much? is it a % of your net or gross? My family member is worried about that because they bought their house about 1 yr ago at our neighborhood's high point.
the payment is about 40% of their net income.
they absolutely want to keep the house...should they be concerned??

along those lines...they rent out their old house because the market tanked. they plan on giving it up but what happens with the rent money (is it considered in the past income???)

and what about the renter...can they break the lease early and tell them they have to move out???

thanks for any insight you guys have.

I dont know if this helps or not, but I have heard that if you file with a lawyer there is not a hearing to determine whether you can "afford" the house if you file pro se they would have a hearing to decide whether it is a hardship.

[rrockinggramma]

reaffirmation only matters if you file a chapter 7 and then only if you are insistent about the loan reporting to the credit bureau. IMO I would never sign a reaffirmation agreement because you never know what lies ahead and should you have to walk away you would owe the difference if a reaffirmation had been signed.

And in a lot of cases, the loan company will still refuse to report the payments to the credit bureau because they are afraid of violating the bk reporting laws. And with White vs Experian now in place the credit bureau's are removing many accounts that are included in Bk to avoid being sued by you.

So if you filed a chapter 7 and didn't sign a reaffirmation, don't fret about it.

[indebt00]

It hurts them. You can not use a negative amount on the means test. In other words, on the Means test, there is a spot for rental income. You deduct the cost of maintaining the property (principal, interest, taxes, and insurance and maintenance costs) form the amount received as rent. If it's negative... you put "$0.00" on that line.

wouldn't it be helpful to have a "zero" rental income...therefor no additional income?
I am confused a bit by your statement.

their mortgage on the rental is $1400 and the leasee pays them $1200...just to be clear. so they lose money each month

[justbroke]

wouldn't it be helpful to have a "zero" rental income...therefor no additional income?
I am confused a bit by your statement.

Since this is the Chapter 13 section of the site, this is how it hurts them.

For example, say that they have a rental property with a lease of $1,200/month and $1,400 in debt service. Let's say that their total monthly income is $6,000. Let's say that they have $5,800 in allowable expenses.

The $200 a month loss on the rental each month, can't be used as an expense so they would have to use part of their allowance to cover it.

Having negative cash flow is generally not allowed and I'll state a reason why. First, the unsecured creditors could (maybe they won't but could) challenge your confirmation. They'll say that since you can pay $200 out of your allowances to cover the negative cash flow in the rental, then you should be able to give the same $200/month to the unsecured creditors. Either these unsecured creditors or the Trustee will argue that your plan is not in good faith. Whether that would actually happen is anyone's guess, but it does put you in a bad start to begin with. Especially from a Chapter 13 budgeting standpoint.

[indebt00]

Does this all matter even if they are giving up the house???

wow...this all sounds bad for them.

we already did the online means test and their payment is only roughly about $500 less than their takehome pay...so this will be tight.

[justbroke]

Does this all matter even if they are giving up the house???

No, it wouldn't. They would not need to fund the additional $200/month out of their "budget".

wow...this all sounds bad for them.

we already did the online means test and their payment is only roughly about $500 less than their takehome pay...so this will be tight. [/COLOR]

That's precisely why rentals that are not "income producing" are not a good idea in a Chapter 13, unless you have significant income from other sources to offset.

[indebt00]

Their plan is to give up the extra house, they don't want to be in the hole during a ch 13 for another house.

so....if they are giving it up....are they ok as far as not having to worry about additional income being used to figure out their payment??? the 6 month look back??

thanks for taking the time to answer my questions....