No reaffirmation of either mortgage loans after Ch 7 discharge

[jpracer37]

Both 1st and 2nd home loans were not reaffirmed after Ch 7 proceedings. Both have been discharged. It has now been 3 yrs since things have been discharged, I just noticed that there was no reaffirmation on either loan. I do believe that we are lopsided on the house and was wondering can we stop paying on both loans, save the money since it isn't getting reported to the credit bureaus anymore since neither was reaffirmed and both have been dischared, save our money, stay here until the bank owns it and try for a Gov. house loan?

[keepmine]

If you didn't reaffirm then, you can stop paying and wait until foreclosure and have no liability for any deficiency balance.
Qualifying for another mortgage will just depend on your lenders criteria.

[AngelinaCatHub]

You are now realizing what most know, the advantage not to reaffirm. At this time, before you stop, may be a good idea to plan where you may stay or what to do once you get thrown out. This could take some time with so many repos going on in our wonderful economy inspired by those who have Hope and Change. Take your change and save for a little hide-away and attempt to pay it off. It won't be fancy, but yours. Only my opinion. 'Hub

[btbeme]

Verify that you are upside down first. Zillow will give you a ballpark figure; if you are close, then get an appraisal done (about $200 or so) if you really want to know.

If you are upside down, you can stop payment and bank the cash. After 3-4 months, depending on state law, the bank will likely move toward foreclosure. You can usually push that timeline out by filing for a HAMP loan modification (wait until you get the notice of impending foreclosure - you will get an "intent to Accelerate" before then). If you get approved for a HAMP, you can decide to NOT pay the 3 months of trial payments - at which point the bank will move toward foreclosure again. Then, you might try a short sale, further delaying your move out, and possibly qualifying for a federal HAFA payout of about $3000 for relocation expenses. Simply said, you can go for quite some time before you are actually forced to move out, if you play your cards right. Bank all the money you would normally pay for your mortgage - you will need that later for a down payment.

As for qualifying for a loan later, the new lender will use the later of the two dates - your discharge, or the date you were foreclosed (or sold) as the starting point for consideration. You qualify for an FHA loan after 2 years from BK discharge or 3 years after foreclosure. There may be an exception given on the foreclosure if you can show hardship circumstances at the time. FHA does not have a clear guideline for a short sale; however, they generally use the three year rule unless you can get a waiver. Good credit practices (rebuilding your credit history) is essential.

It is also possible to find an "owner financed" property, where you can negotiate terms and buy directly from the owner, paying them for 4-5 years until you can get financing from a bank.