Chapter 7 Lien Stripping in Georgia, appraisals, and 'meeting building code'...

[elenamaria]

I have just had my 341 meeting this past thursday (11/6/2014) and no creditors showed up.

I have a fixer upper house that i bought for 35,000 in 2004.
Obtained a 25k home equity loan in 2005.
i live on the edge of a 'historic district' where homes a few blocks away are 100 and 200k,
but the house right next door to me sold for 6,500 in february this year,
and another house on my street that was slated for demolition sold for a whopping 850 (within this past year)

someone (probably the heloc bank) requested a current market value on my house from a realtor
(i found this out when i had called her, referred by a friend, for the same task... we'd actually met before, we are both artists.
she said..'i'm not supposed to be telling you this but i'd valued your house at 23k, and the company wanted it
to be in a higher range') she didn't tell me what that final range was, though.

my lawyer told me that a formal, paid for, independent appraisal was worth it and he would wait to file for a lien strip until we had some confirmation of house value

here's the thing... the house was originally built in 1897 and expanded in 1922.
It has terrible plumbing, needs the electric redone, AND has a hole in fhe floor from a water heater failure. (that is currently covered by a board and a cabinet. )

When i replaced the water heater, naturally, it could not go back where it was (the joists underneath are compromised, as were the other areas i considered putting one in.)
i ended up putting it in the second bedroom (it's only a 2 br house, one bath, 1200 sf) which i basically use for storage and tools.

i just did not have the money to have all of the joists brought up to level (and mind you, they were that way when i moved in...)
most of the doors in the house did not open or close all the way due to the house settling into the pilons.
the pilons are all solid, the ground is solid, its just that there appear to have been other water heater failures. or something. anyway, the floors are not all level.
i didn't care, it's my first house and it was what i could afford!

so what i am getting at is that there are numerous house issues that 'do not meet code'.

a, will those issues result in a low appraisal (all i would need is one dollar less than what i owe on the house, and the second lien can be stripped, or so i understand)
and b, might those issues endanger my current housing situation (ie, the primary mortgage lender somehow seeing the appraisal and demanding that i make things meet code , or something?
(which i cannot afford to do)

truth be told the electrical system has needed to be overhauled since day one, but i lost my job almost right after buying the house.
i have been able to scrape by because of stellar art skills, but only scraping because of a number of factors; car accident, medical bills, and some serious health issues.

i'd rather not sell the house, and i'm hoping for someone's experience and knowledge in this area

i have also been filling out the forms for the loan modification program for the primary mortgage ... (they're due nov 12)
i have to go read some more posts about reaffirming the loan, i'm a little confused about whether or not that's a good idea...

help! - elena

[frogger]

i didn't care, it's my first house and it was what i could afford!

help! - elena

Actually, it's something that you can't afford. If you have never done this, you probably don't have a clue as to how much money this can cost. IMO, you should get out of this while you can. You have nothing but a money pit.......

[Drazil65]

Hi, first and foremost the house is clearly a danger to live in. I assume you have insurance on it as you have a mortgage but understand if something happens in that house the insurance company can and will fight the claim as the house is in a dangerous state of disrepair and void of code. Somewhere in your mortgage I believe you more than likely have a clause that clearly spells out your obligation to keep the BANK'S COLLATERAL in good repair and in livable condition, so you have probably breached your mortgage contract at this point as well.

So, should you file I would absolutely reconsider any impulse to reaffirm (if you are seriously thinking in that direction) as not only is this house not habitable but under your stated circumstances, you cannot afford it. With your current state of health sounds like you will continue to have medical bills building up and my guess is no health insurance??? Is it possible for you to get a full time job that you can possibly have a chance to obtain health insurance at some point? Although I am sure you are a wonderful and talented artist, if it cannot support you and put a decent roof over your head then I am afraid you seriously need to get a job or two to make ends meet.

That is the reality of your situation as seen from the outside with the information you gave. You need a plan and begin your filing strategy to make it work for you in the best way possible and come out of it with a fresh new start in your financial life. I wish you the best in your decisions.

[elenamaria]

Hi, first and foremost the house is clearly a danger to live in. I assume you have insurance on it as you have a mortgage but understand if something happens in that house the insurance company can and will fight the claim as the house is in a dangerous state of disrepair and void of code. Somewhere in your mortgage I believe you more than likely have a clause that clearly spells out your obligation to keep the BANK'S COLLATERAL in good repair and in livable condition, so you have probably breached your mortgage contract at this point as well.

So, should you file I would absolutely reconsider any impulse to reaffirm (if you are seriously thinking in that direction) as not only is this house not habitable but under your stated circumstances, you cannot afford it. With your current state of health sounds like you will continue to have medical bills building up and my guess is no health insurance??? Is it possible for you to get a full time job that you can possibly have a chance to obtain health insurance at some point? Although I am sure you are a wonderful and talented artist, if it cannot support you and put a decent roof over your head then I am afraid you seriously need to get a job or two to make ends meet.

That is the reality of your situation as seen from the outside with the information you gave. You need a plan and begin your filing strategy to make it work for you in the best way possible and come out of it with a fresh new start in your financial life. I wish you the best in your decisions.

The house is NOT a danger to live in, it's just that the electric doesn't meet code (not enough outlets in the rooms). The hot water lines were all redone, when the water heater was replaced, with PEX, but the cold water and the drain pipies are needing replacement. It will not be a major big deal, this is a small house. It just hasn't been done yet. The water heater is not in a lived in room, but if i build a closet around it, it will 'meet code'.

I DO have health insurance now (i did NOT, then) and though i did not have money to rewire the house in the past,
there is substantial improvement in my financial situation (especially when the bills from the car accident get discharged)
btw i have not missed a payment nor been late on a payment in the ten years i have owned the house.

as far as 'being a money pit', i disagree, because this is a neighborhood that is on the fringe of a very GOOD market. it's just that... it's still on the fringe.

So, again, will the first mortgage holder be privy to the appraisal info?

i don't think they can reclaim my house if the things that need to be fixed 'get fixed'.

anyone else have thoughts on this?

elena

PS thank you for the reaffirmation recommendation, i read a lot more about it and i am in agreement. i will be in a better place to refinance after the bk discharges.

[elenamaria]

actually you are basing your reply on a lot of assumptions. thanks for sharing your opinion, though it has nothing to do with the questions i asked.

[elenamaria]

Actually, it's something that you can't afford. If you have never done this, you probably don't have a clue as to how much money this can cost. IMO, you should get out of this while you can. You have nothing but a money pit.......

actually you are basing your reply on a lot of assumptions. thanks for sharing your opinion, though it has nothing to do with the questions i asked.

[elenamaria]

actually you are basing your reply on a lot of assumptions. thanks for sharing your opinion, though it has nothing to do with the questions i asked.

i cannot figure out how to delete this post. when you click 'edit' the only choices you get are 'cancel' or 'save'. wasn't trying to post twice, just realized i hadn't hit the 'reply with quote' button to comment on frogger's post.

[Drazil65]

(truth be told the electrical system has needed to be overhauled since day one, but i lost my job almost right after buying the house.
i have been able to scrape by because of stellar art skills, but only scraping because of a number of factors; car accident, medical bills, and some serious health issues. )

Not assumptions, you clearly state that you have just been "scraping by" for what is stated as 10 yrs since you purchased the home. What you describe is life and it happens so if you have been like this for 10 yrs then you CLEARLY cannot afford this home, period. Although that is not your question it is probably something you should consider when figuring out if you should sink anymore money into this house.

( as far as 'being a money pit', i disagree, because this is a neighborhood that is on the fringe of a very GOOD market. it's just that... it's still on the fringe.)

Its already been 10 yrs and could take another 10, 15 or 20 years for the fridge to move in your direction (if it does), your appraisal will not reflect "on the fringe" but will reflect exactly what is going on in your immediate, surrounding neighborhood for the most part.

( So, again, will the first mortgage holder be privy to the appraisal info?)

There is always the possibly they will get the information at some point and as stated previously you have an obligation to keep the BANK'S COLLATERAL in a state of good repair and livable (bad wiring and plumbing is not good repair and the if your water heater is gas there are rules where that can be placed as well). Will the bank do anything if they do get the information is anyone's guess, maybe they don't care as long as the mortgage is paid, who knows. Research to see if there is any obligation for the 2nd to share information with the 1st under your state laws when it comes to mortgages etc. But if you file they will be notified of that and who knows what they will find out once that door is opened.

BTW, just because you have a small house does not mean it will not be a big deal to fix the bad wiring, plumbing, drains, level the floors, cuz once those things are opened up you will be shocked at what else they find that need to be "brought up to code" and fixed. Have seen it over and over, just sayin....

[elenamaria]

Not assumptions, you clearly state that you have just been "scraping by" for what is stated as 10 yrs since you purchased the home.
"What you describe is life" and it happens so " if you have been like this for 10 yrs then you CLEARLY cannot afford this home, period. "

thanks for your opinion, but yes, your interpretation of my words (bereft of full detail) is ALSO an assumption.
and though there is not a need to 'defend' my choices, you have no idea what my "life" is like NOR what i mean by 'scraping by'.
Perserverance has seen many people reach success despite others opinions and judgements.


so thank you for your unsolicited advice. duly noted..



( So, again, will the first mortgage holder be privy to the appraisal info?)

There is always the possibly they will get the information at some point and as stated previously you have an obligation to keep the BANK'S COLLATERAL in a state of good repair and livable

as i may have mentioned,... it was that way when i moved in. nothing i have done has denigrated the 'bank's collateral'.. i was not required to improve the property in order to get the loan (as is the case in things like HUD houses etc..

(bad wiring and plumbing is not good repair and the if your water heater is gas there are rules where that can be placed as well). Will the bank do anything if they do get the information is anyone's guess, maybe they don't care as long as the mortgage is paid, who knows. Research to see if there is any obligation for the 2nd to share information with the 1st under your state laws when it comes to mortgages etc. But if you file they will be notified of that and who knows what they will find out once that door is opened.


Clearly a forum is not the place to share personal info, only a place to ask technical questions.
...too open to everyone's opinions, projections, and misinterpretations.
so, for your opinion as to my bit of technical questioning, thank you very much and i do appreciate your time and experience.

[frogger]

Clearly a forum is not the place to share personal info, only a place to ask technical questions.
...too open to everyone's opinions, projections, and misinterpretations.
so, for your opinion as to my bit of technical questioning, thank you very much and i do appreciate your time and experience.

Clearly....... then you're probably at the wrong forum.