Automatic Stay-Auction Sale

[nmsilv335i]

HI! Question: My 341 Meeting (California) is 2 days before my Foreclosed Home Auction Sale. Is is still posssible to do Short Sale? To do a Loan Mod? or should we just let the house "go"? Can the Bank do anything before I am officially discharged? please advise!

[nceguyfromne]

my thoughts

HI! Question: My 341 Meeting (California) is 2 days before my Foreclosed Home Auction Sale. Is is still posssible to do Short Sale? To do a Loan Mod? or should we just let the house "go"? Can the Bank do anything before I am officially discharged? please advise!

If your only concern is that they will sell the house on the day of the auction for less than you owe and come after you for the remaining balance prior to your discharge, you can rest easy. Unless your BK were to be unexpectedly dismissed later on, the bank will never (now or in the future) be able to collect a penny from you on the mortgage. I assume the bank petitioned the BK court to lift the automatic stay so they could continue their foreclosure process? This only applies to repossessing the collateral (your home); it does not enable them to collect on the mortgage loan, which will remain subject to the automatic stay pending discharge. The collateral and the mortgage are two entirely separate things.

The only benefit a short sale might offer is to make your mortgage show as "settled" on your credit report rather than foreclosed or discharged in bankruptcy. You're going to have bankruptcy on your credit report for the next 10 years regardless, so I don't see a foreclosure harming you very much in the grand scheme of things. It's probably not worth your time, effort and possible expense to try to sell the property at this point just to get a different disposition status on your credit report for your mortgage account.

If you are considering trying to re-affirm your mortgage so you can keep your home, be sure the bank is offering you a really good deal and also be sure you are doing it for the right reasons: because you want to keep it and it makes good financial sense to do so. Please don't put yourself in another bad position that you can't get yourself out of for another 8 years. You have an opportunity to walk away and have a fresh start. Make sure you take advantage of it.

I am by no means an expert so if someone else has a different opinion, feel free to chime in.

[angles]

CA is a non recourse state. Personally I would not try to short sale, DIL, or anything in that I would have to sign documents for the bank. They may include deficiency statement that you would otherwise not be responsible for.

Like posted above, they are trying to lift the stay so they can take your house. I hear it is common in CA for a bank to do that. I would not worry about it.