Let the House Go?

[toojerm]

I am in 3 years into a 100% plan. $2250 to the trustee, with my $1300 mortgage outside. I just relocated to take a new job, and it looks like my house may not sell. I called the lawyer to see about surrendering it, but he said to just stop paying on it. My wife (who did not file) is concerned that we will not ever be able to buy a home in our new location if we let it get forclosed. I am current now, but between the mortgage, the rent ($1250) , and utilities for both, I have cut to somewhere. So, I guess my question is, how much longer am I preventing myself from buying a house in my new town after the CH13 if I let the one in the old town go?

[justbroke]

No matter what, a foreclosure will cause at least 2-3 years waiting before you can buy another home.

I believe that your attorney's "just stop paying it" strategy may be really good for Washington (State). Washington is primarily a non-judicial foreclosure state and deficiencies are not usually granted in that type of foreclosure. This basically makes it a non-recourse foreclosure. However, remember the foreclosure will cause issues for you for at least 2-3 years.

I have to ask, but which one of you is really concerned about owning so quickly?

[tammygirl1]

No matter what, a foreclosure will cause at least 2-3 years waiting before you can buy another home.

I believe that your attorney's "just stop paying it" strategy may be really good for Washington (State). Washington is primarily a non-judicial foreclosure state and deficiencies are not usually granted in that type of foreclosure. This basically makes it a non-recourse foreclosure. However, remember the foreclosure will cause issues for you for at least 2-3 years.

I have to ask, but which one of you is really concerned about owning so quickly?

justbroke, would this also be true in California?
Thanks

[justbroke]

justbroke, would this also be true in California?

California is a non-recourse State if you did not refinance. The technical aspect is that California does not allow deficiency judgments when it's a "purchase money" loan. Unfortunately, refinancing destroys the "purchase money" characteristics after you purchased the home, and makes the loan a recourse loan.

[toojerm]

I have never refinanced it. I tried, but by the time the trustee approved it, my rate lock expired and interest rates spike, making it too expensive for too little saved. The concern with ownership in the future is that we don't want to relocate our kids over and over again as they get older. So just forgetting about it won't impact my ch13? Also, what about the utilities and insurance? Should I just turn them off? As I mentioned, I am not, nor have I ever been behind, but if it won't sell I have to stop paying to keep up with the ch13 (23 months left) and continue to live. The attorney said I shouldn't even bother notifying Citimortgage, just stop paying them. One last point, my wife's name isn't on the house, I bought it before we married.

[newbie2]

I have never refinanced it. I tried, but by the time the trustee approved it, my rate lock expired and interest rates spike, making it too expensive for too little saved. The concern with ownership in the future is that we don't want to relocate our kids over and over again as they get older. So just forgetting about it won't impact my ch13? Also, what about the utilities and insurance? Should I just turn them off? As I mentioned, I am not, nor have I ever been behind, but if it won't sell I have to stop paying to keep up with the ch13 (23 months left) and continue to live. The attorney said I shouldn't even bother notifying Citimortgage, just stop paying them. One last point, my wife's name isn't on the house, I bought it before we married.

I'm wondering why your attorney would advise to not surrender the home within your plan? A Chapter 13 mortgage doesn't give you a discharge of secured debt if the payments on the debt are supposed to continue post discharge. It seems to me the tidy and less stressful way to handle this is to modify your plan to include this home, and then get on with your life.

[justbroke]

I have never refinanced it. I tried, but by the time the trustee approved it, my rate lock expired and interest rates spike, making it too expensive for too little saved. The concern with ownership in the future is that we don't want to relocate our kids over and over again as they get older. So just forgetting about it won't impact my ch13? Also, what about the utilities and insurance? Should I just turn them off? As I mentioned, I am not, nor have I ever been behind, but if it won't sell I have to stop paying to keep up with the ch13 (23 months left) and continue to live. The attorney said I shouldn't even bother notifying Citimortgage, just stop paying them. One last point, my wife's name isn't on the house, I bought it before we married.

Adding on to what newbie already posted... why not just get this dealt with now. As for disruption to the family... that's already done. It is very noble to want to have structure, but the reality is that you will need to move and you will not be able to purchase a new home for several years.

If your spouse can qualify for a mortgage on her own income and credit score, then you could use that to purchase a new home. I just don't want you to leave this board feeling that a box -- to which you are indentured to by a promissory note and mortgage -- is not a home. I can tell that you're trying to build a plan so that there is some "security" in your residence and that is exactly how you should be thinking. However, you need to think of the realities of the situation and hope for the best, but prepare for the worst.

You should put the place on the market. You should then contact the lender about a deed-in-lieu -- once it's on the market for a month or two. If the lender accepts, you would be able to move into a new home. I think there was one poster here on BKForum who received conventional financing and was able to do a deed-in-lieu (DIL) and purchase a home at the same time. The key was that they didn't get foreclosed upon and that they were not behind in payments. Once you go behind in payments on your mortgage, your hopes of getting a new mortgage quickly, diminishes with each passing month.

I am glad that you're thinking about your strategy, but I think you are thinking too "short term".

[toojerm]

The house has been on the market for a month. I called the attorney to discuss modifying my plan, if it came to that. He was pretty quick to conclude that I should just stop paying now. I appreciate the responses. The next payment won't be late until Nov 16th, so we'll see if there is any interests.

[newbie2]

The house has been on the market for a month. I called the attorney to discuss modifying my plan, if it came to that. He was pretty quick to conclude that I should just stop paying now. I appreciate the responses. The next payment won't be late until Nov 16th, so we'll see if there is any interests.

Did he say whether the "stop paying now" also meant that the plan should be modified to reflect this?

[toojerm]

Nope.