9 months in to Chap 13...surrender the house?

[mathom1]

Good day,
We are 9 months into a Chap 13 5 year plan. The house down the street just came up for rent. It rents for $700 under what we pay for our house. We've tried the home loan modification plan. We sent our information to GMAC 3 times and each time they come up with some issue and ask us to resend it. Does it make sense to surrender the home? Can we even do it?
-M

[SMinGA]

Possibly...

You could contact your atty about your intent to surrender and modify the plan. Stop paying mortgage, make arrangements to move and your plan payment would adjust upward due to greater DMI. (Though it would be a time to revisit expenses in case anything has changed.) Would pay more to creditors - though never more than 100% of claims - but at the end of your case you'd be clear of the old house mortgage.

[mathom1]

SMinGA,
Good advice. We're still waiting for our attorney to call us back. Our attitude is this..it contributes more DMI to the trustee which in turn allows us to expedite a 5 year plan down to ~3 years...GO FOR IT!! Thanks again for the feedback.

[mathom1]

Quick question...attny told me to stop making house payments. Said if we plan to surrender the house ...stop making the payments. He estimated we had 7-9 months till foreclosure. My concern is this...we had stopped making payments prior to the Chap 13 filing ..~approx 4-5 months behind. We then filed Chap 13 and had the back payments rolled into the plan. Does the foreclosure process start all over again? Or does it pick up where it left off?
-M

[SMinGA]

Had the actual foreclosure process started before you filed?

I understand they can continue from where they were, but from all I've seen & read it will take some time before the mortgage company responds to the sudden lack of payments.

[mathom1]

Thanks again for the information. One other thought...
We did a lien strip on this property and had the lien strip and the back payments rolled in the Chap 13. If we surrender the house...do the lien strip and back payments fall off what we owe since we've given up ownership?
-M

[mathom1]

Anyone have any insight on my last question?
"We did a lien strip on this property and had the lien strip and the back payments rolled in the Chap 13. If we surrender the house...do the lien strip and back payments fall off what we owe since we've given up ownership?"

[Billssuck]

I don't have an answer to your last question about lien strips. But I have modified my ch13 to surrender my home (which was approved by our trustee). Now I am waiting on BOA to lift our automatic stay and start the foreclosure process. As part of our plan's modification, we had to do a new expense sheet to recalculate our DMI. For us, since my husband's income went down $1K/month and childcare expenses went up, our payment to our trustee remained as it was before surrendering our house. However, I have tried to save my mortgage payments normally made while we are in the house waiting on foreclosure and every single month some new unexpected expense comes up (car repairs, mower blew an engine, dentist, etc.). It just goes to show, we REALLY couldn't afford our home. BTW...I have saved some $ just not what I thought I could...