Home Loan Question

[ullysses]

I have my 341 in the morning but still am unsure about how my mortgage works.

We are way underwater and the mortgage is part of the BK but we will stay and pay. Are we considered renters? Who are we making payments to? Is our payment going towards principle and interest? Are we still building any equity by making the payments? Can we try to sell the house? Can the mortgage company sell the house while we still make payments?

I realize this series of questions sounds disjointed but my mind is not where it should be.

Thanks, Al...

[LadyInTheRed]

You are not renters. You still own the house.

You should continue to make payments to whoever you made them to before filing unless the mortgage company gives you a new payment address. Payments should applied to interest and principal just as they were before you filed BK.

As long as you keep payments current, the bank is not likely to foreclose. Depending on state law, they may not be legally able to foreclose. In order for the mortgage company to sell the house, it would have to follow foreclosure procedures according to the laws of your state.

You can sell the house, but if you can't get enough money for it to pay off the mortgage or get a buyer who will accept title subject to the existing lien, the bank would have to agree to a shortsale. That would be a big hassle for you. If the mortgage is discharged in your BK and you decide you don't want to continue to live there, it would be much less trouble to stop paying the mortgage, live there for free until the bank forecloses and then walk away.

[ullysses]

LadyInTheRed,

Thanks so much for your reply it really helped my peace of mind. I just returned from the 341 which went well. I will post a thread detailing the process, beginning to end!

ASD...