Letting the House Go? Renting?

[ItsJustMe]

Thanks! That is a huge relief for me. I was actually able to modify the mortgage (3.25% step rate w/5.25% max for 40 years) but we're already counting down the days until we can sell and move elsewhere (we love our house, but our neighborhood has gone downhill fast). I'm just starting to think that rather than waiting 3 years to move and hoping the market has rebounded enough to sell (we will hopefully be breaking even at that point, but will need a chunk of equity to cover the cost of selling!) that maybe it makes more sense just to cut our loses and go rent for a few years.

[aljohnson007]

I would not change MY statement of intentions (SOT) from reaffirm to surrender. Just leave it as is, don't sign any agreement and do not change your SOT as it is not necessary. The debt will be discharged including any insufficiency and you may be able to stay put for a long time. Remember, only the legal owner of the property can have you evicted and the banks are in no hurry to change the title where there are HOA fees and taxes due. JMO.

[ItsJustMe]

Thanks!

So if we continued to pay (past discharge) but never reaffirmed, would the 'foreclosure date' be discharge or our last payment?

[aljohnson007]

Foreclosure is not connected to your discharge date. If I intended to not keep the house, I wouldn't make any further payments and just let the foreclosure make its way through the system. You may be able to stay rent free for up to a year, depending on your location. Talk to your attorney.

[ItsJustMe]

Okay. I thought I read (in the foreclosure forum) that the date of discharge is considered the foreclosure date (if house is included in BK).

[aljohnson007]

Banks/Lenders are not required to ever foreclose on a property. If it is not in their best interest, they can just let it sit and have the owner of record pay HOA fees, yard maintenance and other fees/fines. The only thing bk does for the debtor is relieve you of the mortgage debt.

[goblue]

We are in this same situation, although our home value is only about $30K below the amount of our total mortgages.

I need my mortgage payment to qualify for Chapter7 - but I honestly don't know that we want to keep our house. I wasn't sure if there would be any ramifications (ie -dismissal, fraud, etc) if we changed our mind after stating we intended to keep the house. Do you do this at the 341 meeting? A few days after? Anytime before the discharge?

We are 3 months behind on mortgage so we have to get ourselves current before we can file Chapter 7 if we plan to keep the house, right?

I'm very concerned about finding a suitable rental house that will accept our credit and my 3 dogs! I'm so afraid to let the house go and then find we cannot get a rental property.

It it matters, our first is through America's servicing Company (Wells Fargo) and our second is thru EMC Mortgage (Chase).

Decisions, decisions....

[SPalin]

We are now just three months behind... attorney stated we need to have all payments current before we discharge (possibly 2/2010). Since we are over $120,000 in the hole on our mortgage and the market is not even bottomed out yet here in California! I have called around to several large apartment complexes and asked about if they would accept someone with a resent Bk discharge and 90% yes, but with a larger deposit. I also have a cat and large dog so that limits me at some of the apartments. I also called several privately managed/owned homes that are for rent and that was not much of a problem to rent with a recent Bk... only issue is you might move in and have to move out a few months later due to that owners going into foreclosure (which is increasing here in California). My boss is renting and the owner has missed three payments, so now my boss has paid the bank directly so she doesn't have to move, it is a crazy time!

[momtoroxy]

The attorney wants you to be current before discharge if you are keeping the house, correct?

We are not going to keep the house. We are though, going to keep our intentions the same and if asked at the 341, we'll say we're keeping it. Our 341 is NOV 18...payment was due on the 1st, so I don't think we have to worry with the grace period. That will be our first missed payment. We don't want to mess up our schedules. Our lawyer didn't seem worried in the least. She just said that we should say that it is our "intention to keep the house"