Giving Up Home After Discharge

[AZFiler]

We are discharged (3/9/09) chapter 7 but paid through on our first and second mortgages. They are both current. We found a great rental home that is way cheaper and decided to move. What is the easiest/quickest/best way to give back the home we own?

[LuciluS]

You didn't supply enough information for anybody to respond.

Did you sign Reaffirmation papers on your 1st & 2nd Mortgage? Do you have HOA fees?

If your home value underwater?

Luci

[AZFiler]

Additional Info

You are correct, sorry about the lack of info.

No reaffirmations were signed. The house has a 183K first and 17K second. It's worth about 165K. As of right now we are current on both mortgages and HOA fees are up to date.

[LuciluS]

I know you can walk away from the house if you didn't sign any reaffirmation papers; however, I'm no so sure about the HOA monthly debt. I believe you have to pay it up until the date you move, but I'm not sure.

So gonna bump this post and maybe one of the Gurus or Moderators will answer your question.

Luci

[LuciluS]

Here's your answer on HOA dues.

http://www.bkforum.com/showthread.php?t=38678

[flnybk]

So I have my 341 Tuesday and wait until I am discharges in July....then i can walk away from my 1st and 2nd loans on my house since i am $100,000 upside down? Is it considered a foreclosure. If I stop paying, do I still owe them the money? Or can I just apply it to rent and move on with my life.

[StartingOver08]

If you get your discharge and have not reaffirmed your loans/mtgs on the house, yes you can walk away without paying the mtg debt. The lenders can not come after your personally for repayment of the mtg debt once you have been discharged from bankruptcy.

Once you stop paying, the lender will start the foreclosure process (usually when you hit 90+ days you will get a Notice of Default). The lenders have to proceed with a regular foreclosure in order to properly take over the asset (your home). The foreclosure process itself takes quite a while, depending upon where you are located.

Please note, this foreclosure will not go on your credit as you have already had the debt discharged in bankruptcy. If it ends up on your credit, you need to just dispute with the CRA's to remove it as your mortgage loans should read iib and zero balance (included in bankruptcy = iib).

The HOA fees need to be paid until the transfer of the title of your home to the lender. This can be many months. You will want to monitor the transfer - you can do that through the public records of your county as most counties are on line now. The issue with HOA fees is they can come after you personally for post petition HOA fees as well as put a lien against the property. In the past the HOA's were most likely to just lien the property, but I have noticed over the past year or so the HOA's getting much more aggressive. You may want to check with your attorney to see how the HOA's are handling it specifically in your district.