Statement of Intentions

[jmanford]

On my BK petition, still waiting for my 341 hearing May 11, I checked the box "Other" on my statement of intentions for my 1st mortgage and my 2nd. (heloc) Under "Explain", my lawyer wrote "retain, keep current." Then under that where it says "Property" we checked the box "Claimed as exempt."

I don't want to surrender my home in bankruptcy, because if I do, the bank will foreclose if I stop paying. Then when I apply for an FHA loan in 2 years, and they do a public records search they will find the foreclosure on my last loan.

I have decided that I can't afford to keep my home under the current loan terms. I really don't want to deal with the headache of a loan mod. I would like to just short sale my house so I don't get the foreclosure black eye on my credit report or in any public records database.

So, here is my question, when can I list my house for short sale? I mean I know I have to get lender approval first. When they see my bankruptcy that shoudln't be a problem. Do I wait til after the 341 meeting to get a realtor and start the process? Do I wait til my BK is disharged? Does it matter at all when I start the short sale process?

Thanks everyone

[angles]

Under normal circumstances anyone can list their property at anytime for a short sale prior to the bank’s approval but I am not sure how that would work while your BK is in progress. Its when you have an offer to submit to the bank is when it is reviewed by the bank to be accepted or not. you can also request a DIL if it does not sell and you want the bank to take it back. in a short sale or DIL the bank will ask for your financial information, a hardship letter, etc. if you go that route be prepared for frustration when dealing with the bank and lots of delays.

for the BK part, and I am guessing (trying to use common sense), I would think your lender cannot negatively report the loan if you included it in the BK. you also would no longer be responsible for the loan after filing for BK and as such would not be responsible to sell the property. in fact, if you try to help the bank out and short sale the property after your BK has been discharged and if you did get an offer the bank may want you to sign something saying you will be responsible for the deficiency, thereby sucking you back into debt. And I am willing to bet that piece of information would be buried in the contract somewhere. Personally, I would not take the risk to help the bank because they will not help you.

[jmanford]

understood. I would defintely have my lawyer look over any doc before I sign. I just don't want the property foreclosed on. I know I'm not financially obligated after my BK discharge, however in some database somewhere, it will show a foreclosure if I don't try and do something about it. Like if a lender did a county record search before giving me a loan or something. Thanks for your insight.