Some BK CH7-questions concerning Mortgages...
Hi folks,
Well, my mother is thinking about filing CH7 - maybe next year. Our first mortgage is current but the second isn't (the 2nd is totally "unsecured" considering the value of the home and balance of the 1st.).
Since her total debt exceeds the CH13 limits, CH7 is the way to go (unfortunately, no 2nd mortgage stripping). Her income is below median income, no assets and no car. That's why we are aiming for a "pro se" filing.
The ultimate goal is to get rid of the 2nd mortgage. Although not an issue now, I'm sure it will be in a couple of years if we don't take care of it. I told my mother she could file CH7, not reaffirm both mortgages and once the dust settles, try to settle the 2nd mortgage for pennies on the $ (still, will be a lot of pennies because the loan is more than $150K). If they wouldn't agree, she could file CH13 four years after her CH7 discharge and potentially strip it.
Currently, I'm trying to get a whole picture about the consequences of a potential filing. The house we have right now is basically all we have and I'm thinking about all potential pitfalls of this process. Although the loan-amount is much more than the value of the house, most of it is interest-free and not due within the next 25 years - so we are only paying a mortgage of about $1,300/month (incl. taxes and escrow!) on a house that has a zillow rent-estimate of $2,300/month. I certainly don't want to lose this house - and certainly not due to a second mortgage in 10 years or so. So here are my questions so far:
- She would be filing in Florida's Middle-District (Tampa). I've read about a judge in Orlando that requires reaffirmation of mortgages. Any info on that?
- "CH20" is not an option in our district, right?
- Can a lender in our district under any circumstances foreclose on a non-reaffirmed but current mortgage? This is also very important because a "it's unlikely they will foreclose"-scenario won't be an option for us. When it comes to our home, we need legal certainty.
- Are there any legal "grace-periods" under non-reaffirmed mortgages as well? Although we are usually current on our mortgage, The check sometimes reaches our lender 2-3 days "late". Is that enough to foreclose or do we still have the same "right to cure" prior to the actual foreclosure as we would have under Florida law on a non-discharged mortgage? This would be important as well - just like before. We really don't care much about what is likely or not - we just don't want to take any chances.
Being a "what if?"-kind of guy, I informed myself what would happen to our mortgage if something happened to my mother (God forbid!). I found out that there is a federal law called "The Garner-St. Germain Depository Institutions Regulation Act" from 1982, basically saying that I could take over the mortgage and continue payments since I'm her son and living in the house.
- Now, does this law apply to discharged, non-reaffirmed loans as well? And if yes, how? Would I be personally liable by taking over the payments of a discharged mortgage of my mother or would I simply be making the payments without personal liability?
If a discharged loan couldn't be "transferred" to me under this law, I would actually have to aim at a reaffirmation in order to avoid losing the house in a worst case scenario.
In two weeks, we have a free consultation with a local BK-lawyer but I wanted to be ahead of the game by asking the board..
Thanks in advance!
IBroke
Well, my mother is thinking about filing CH7 - maybe next year. Our first mortgage is current but the second isn't (the 2nd is totally "unsecured" considering the value of the home and balance of the 1st.).
Since her total debt exceeds the CH13 limits, CH7 is the way to go (unfortunately, no 2nd mortgage stripping). Her income is below median income, no assets and no car. That's why we are aiming for a "pro se" filing.
The ultimate goal is to get rid of the 2nd mortgage. Although not an issue now, I'm sure it will be in a couple of years if we don't take care of it. I told my mother she could file CH7, not reaffirm both mortgages and once the dust settles, try to settle the 2nd mortgage for pennies on the $ (still, will be a lot of pennies because the loan is more than $150K). If they wouldn't agree, she could file CH13 four years after her CH7 discharge and potentially strip it.
Currently, I'm trying to get a whole picture about the consequences of a potential filing. The house we have right now is basically all we have and I'm thinking about all potential pitfalls of this process. Although the loan-amount is much more than the value of the house, most of it is interest-free and not due within the next 25 years - so we are only paying a mortgage of about $1,300/month (incl. taxes and escrow!) on a house that has a zillow rent-estimate of $2,300/month. I certainly don't want to lose this house - and certainly not due to a second mortgage in 10 years or so. So here are my questions so far:
- She would be filing in Florida's Middle-District (Tampa). I've read about a judge in Orlando that requires reaffirmation of mortgages. Any info on that?
- "CH20" is not an option in our district, right?
- Can a lender in our district under any circumstances foreclose on a non-reaffirmed but current mortgage? This is also very important because a "it's unlikely they will foreclose"-scenario won't be an option for us. When it comes to our home, we need legal certainty.
- Are there any legal "grace-periods" under non-reaffirmed mortgages as well? Although we are usually current on our mortgage, The check sometimes reaches our lender 2-3 days "late". Is that enough to foreclose or do we still have the same "right to cure" prior to the actual foreclosure as we would have under Florida law on a non-discharged mortgage? This would be important as well - just like before. We really don't care much about what is likely or not - we just don't want to take any chances.
Being a "what if?"-kind of guy, I informed myself what would happen to our mortgage if something happened to my mother (God forbid!). I found out that there is a federal law called "The Garner-St. Germain Depository Institutions Regulation Act" from 1982, basically saying that I could take over the mortgage and continue payments since I'm her son and living in the house.
- Now, does this law apply to discharged, non-reaffirmed loans as well? And if yes, how? Would I be personally liable by taking over the payments of a discharged mortgage of my mother or would I simply be making the payments without personal liability?
If a discharged loan couldn't be "transferred" to me under this law, I would actually have to aim at a reaffirmation in order to avoid losing the house in a worst case scenario.
In two weeks, we have a free consultation with a local BK-lawyer but I wanted to be ahead of the game by asking the board..
Thanks in advance!
IBroke
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