This is going to be long but I want to get all the info out there in order to get some opinions....My bankruptcy chapter 7 was finalized in Nov 2010. We gave up everything except for the house. We continued to pay mortgage and HELOC payment on time each month but never reaffirmed either loan. In Jan 2011 my dad put his house in my name because he is older and doesn't want the state or nursing home (if he needed to go into one) to eat it up. We recently had a bad storm here...had roof damage...turned it in to homeowner's...they basically told us sorry about your luck but the roof was old and needs replaced so they are not paying anything. Decided to go to the bank that holds the mortgage to reafinance and reaffirm to have new roof put on house. The loan officer tells us we have a 10% chance of getting a loan and it would be for roof only. We were going to get a little extra to fix a leaky pipe and the eaves that are rotting. My husband then proceeds to tell the loan officer if we can't get loan we are going to walk away from the property because come winter the roof will leak. The loan officer replies I don't blame you one bit?????????? Now keep in mind we aren't underwater by any means. House is worth about 45,000-50,000. We owe 18000 on mortgage and 110000 on HELOC. So now we have decided to look for another house and plan to use my dad as a cosigner and his house (that is in my name) as collateral. Is there anything the bank can do if we leave here? Like trying to go after my dad's house or us? And what do you think the odds are of us being able to get another mortgage on a different house using my dad as cosigner and his house as collateral?? When we talked to a realtor a bout 2 years ago we were told you have to wait 2 years after discharge to get FHA loan or 4 years for a conventional mortgage...Nov 2013 will be 3years??
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What the realtor told you is consistent with my understanding.
The mortgage company can't go after other assets if you default. Your personal liability is discharged, they can only go after the home that secures the loan.
Is the Heloc really $110,000, or did you add an extra zero? You say you aren't underwater, so I am assuming it's really $11,000. If you have that much equity, why walk away? Why not sell the house?
You can't reaffirm a mortgage after it's been discharged. Refinancing is a new loan, so it has the same effect of reaffirming because it puts you back on the hook. I know it's just terminology, but I want to make sure nobody gets the idea that you can reaffirm a debt after discharge.Decided to go to the bank that holds the mortgage to reafinance and reaffirmLadyInTheRed is in the black!
Filed Chap 13 April 2010. Discharged May 2015.
$143,000 in debt discharged for $36,500, including attorneys fees. Money well spent! -
Yes I meant 11000.00...the house appraises for 45-50 but with the way the market is I am not sure we could get much more than 35 out of it???? And if I can just walk away....why go thru the hassle of trying to sell?? Thanks for your opinion!!!Comment
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How much money would you have if you walked away? Put it up for sale 'as is'.Comment
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Eventhough FHA guidelines allow a mortgage 2 years after BK, the lenders often have stricter requirements. And many underwriters misunderstand the requirements and will refuse to fund a loan if you there was a foreclosure within 3 years, even if it was a discharged mortgage. Letting the house go into forelcosure may very well make it more difficult to get another mortgage.LadyInTheRed is in the black!
Filed Chap 13 April 2010. Discharged May 2015.
$143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!Comment
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My bad, see next post
Keep On Smilin'Comment
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Anything you can get out of it is good- even 10K will go a long way towards the next down payment.
And save you headaches later on.
Keep On Smilin'Comment
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Throwing this out there, if it applies. You say your name is on the other home. Would a new mtg for you have to then be considered a second home for you? Not sure as the new place would become your primary. I just went through something similar and because we own our primary, the new mtg was considered a second home and downpayment and interest rates were not as good as they would have been.
Anyway food for thought and if nothing else ask your lender when it is time.Comment
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