Not sure how principal residence mortgage is dealt with in chapter 7

[debee]

We only have one mortgage (no heloc) and we are not behind in our payments.

We want to keep our house because we have some equity (at or less than our exemption amount depending which website we reference) and rents in our area and high. It is cheaper for us to own this little shack than to rent.

BUT, our mortgage lender will be a creditor in our bk and we are worried about that.

We are current now and plan to remain current through the bk filing. Does anyone know if there is some way the lender can take our house - for instance, can they refuse mortgage payments we make during the bk and then initiate foreclosure after?

We thought of trying to refinance with another lender prior to filing bk just so we wouldn't have to worry about how our current lender will behave.

Does anyone know?

Thanks in advance to anyone who can help with information/experience.

[tobee43]

just a quick copy and paste answer for you.....you should be just fine....

Federal Exemptions NOT Available
in California (see below)
California Homestead Exemption
Real or personal property you occupy including mobile home, boat, stock cooperative, community apartment, planned development, or condo to $75,000 if single & not disabled; $100,000 for families if no other member has a homestead (if only one spouse files, may exempt one-half of amount if home held as community property and all of amount if home held as tenants in common); $175,000 if 65 or older, or physically or mentally disabled; $175,000 if 55 or older, single, & gross annual income under $15,000 or married & gross annual income under $20,000 & creditors seek to force the sale of your home; forced sale proceeds received exempt for 6 months after; separated but married debtor may claim homestead in community property still occupied by other spouse. (Husband & wife may not double, Almost every state provides protection for equity in the family home, and many states have increased the amount of protection in recent years. Seven states offer unlimited protection. Most states are not as generous.

New Federal Residency Requirement
Under the new bankruptcy law, you must be have lived in the state for at least 40 months (three years and four months) before you can claim any homestead protection greater than $125,000. (If your states offers less than this amount, the law is irrelevant to you.) The law is poorly worded but seems to say that if you move from one home to another in the same state, you can claim that state's homestead protection.

[tobee43]

We only have one mortgage (no heloc) and we are not behind in our payments.

We want to keep our house because we have some equity (at or less than our exemption amount depending which website we reference) and rents in our area and high. It is cheaper for us to own this little shack than to rent.

BUT, our mortgage lender will be a creditor in our bk and we are worried about that.

We are current now and plan to remain current through the bk filing. Does anyone know if there is some way the lender can take our house - for instance, can they refuse mortgage payments we make during the bk and then initiate foreclosure after?

We thought of trying to refinance with another lender prior to filing bk just so we wouldn't have to worry about how our current lender will behave.

Does anyone know?

Thanks in advance to anyone who can help with information/experience.

and you will not be listing the mortgage to be written off or discharged....but as a secured creditor and the house itself is the collateral.

[tcreegan]

Hi debee,

Who is your lender? Do a search on the forum for your lenders name and see what other foks have experienced w/ your lender.

(at or less than our exemption amount depending which website we reference)

tobee has the numbers for CA system 1, 75,000 single, 100,000 joint filing

CA system 2 is only 20,725 but any unused exemption can be used as a "wildcard"

These were the numbers as of Jan 2010

If you are keeping the house, stay current on the payments even during the BK Remember that the lender has restrictions on contacting you once you file, so you have to contact them. Depending on your lender, your online access may be cut off, they might stop sending statements, and your payments may need to be routed to the BK or loss mitigation dept. If any of this happens, contact them, ask where to send the payments, ask to get online access back or statements mailed.

Good luck w/ your filing!

Tom in Colo

[keptdigging]

If you equity is exempt and you keep making your payments, you keep your house. The rest is just logistics.

Foreclosure only happens if you don't make your payments. Moreover, no lender WANTS to foreclose.

Some lenders have special requirements as they interpret bankruptcy law re: online access, billing, etc. My servicer (Citimortgage) has a special message that the statement is for "informational purposes only" and that I can contact them if I don't want to receive "future informational notices." That's them meeting their legal obligation of not trying to collect the debt on me as a person.

[debee]

Lender is USAA. GMAC is servicing. We will be walking away from two underwater rental properties also financed by USAA. One of those is serviced by GMAC as well. I understand that banks don't want to foreclose, but I was worried about USAA because getting stiffed on the rentals might make them want to foreclose on our principal since it's not upside down. Not sure exactly what our equity position is because some home value type websites indicate 30k equity, others as much as 100k. BOA refinance dept plugged our address into their computer and said it was 100K equity. We can exempt that in CA, just wonder if we should be worried about USAA...

[tcreegan]

Hi debee, no experience with USAA but I have dealt w/ GMAC and they seem as incompetent as they come.....

Tom in Colo

[tobee43]

i beginning to believe the MAIN criteria to work in any of this banks are

middle school drop outs
limited of 2 felonies on your records
have a heavy enough accent to assure NO one can understand a word you say
have either drug or alcohol problems


personally, i have never seen such incompetence in my entire life. but i'm certain it IS what the banks what when we call. a dumb person that can't speak or answer any questions we may have.