Surrendering Home AFTER Bk Discharge

[IzzyB]

Hi all,

Our bk was discharged June 28, 2007. We intended on keeping our home, maintained payments, never late. We did not sign a reaffirmation agreement, and our lawyer said that we could walk away from our home at any time b/c it was included in the bk. My husband is being relocated to Florida and the real estate market is awful, no equity in the house. We've got our house up for sale but no buyers yet. Could we just walk away at this point? Would this be considered 2 hits on our credit, or would it still show included with the bk?

Thanks,
IzzyB

[Beach Bum]

I've heard that it could be two hits and I've heard that the bank can only report it as IIBK. So who knows?
We're doing the same. Discharged in August, intended to keep the house, but our Opt Arm is resetting and we've decided to just walk. Our Attorney actually advised us to do it this way in order to pass the means test. Crazy.
It may be tough to get into another mortgage until after 2 or 3 years pass, but the market should start to turn around by then anyways. You'd be crazy to buy anything now anyways. Just try to secure a nice home to rent for a few years.

[IzzyB]

Thanks, BeachBum. We're actually planning on moving in with my in-laws in Florida for a while, saving up some money, and then renting for another year or so before trying to buy in 2009. I'm hoping the market will stay pro-buyer for a while. I'm just so ready for this whole experience to be behind us.

Anyone know how long we have to get out of the house if we stop making payments?

[HHM]

Even though you did not sign a reaffirmation agreement, since you maintained payments through the BK, odds are the foreclosure will be reported...but what option do you really have? So, how it will look on your credit report is the least of your concerns because its not like you can take a different course of action. (but, like BeachBum said, it will probably continue to be reported as IIB, included in Bankruptcy).

But yes, you can simply walk a way...if you want to try to do so quickly and just be done with it, you can offer the bank a Deed in Lieu of Foreclosure. Or, you can live in the house rent free duing the entire foreclosure process which could take anywhere from 4-8 months depending on what state you reside in.

[IzzyB]

So what happens then? If we decide to walk away, do we call the mortgage company or our lawyer and let them know? Or do we just stop making payments, leave, and let the mtg co figure it out?

I read somewhere else that since we didn't reaffirm the house, the mtg co isn't reporting our payments anyway. Is that right? So really what's the point of even trying to sell it? Is there any advantage to selling vs. letting it go?

Thanks again,
IzzyB

[Minnymouth]

Its best if your going to surrender the house to notify the mortgage company so they can make arrangements to take possession. This way you are no longer responsible for anything........after they take possession. No taxes, insurance etc. Until the home is back in the possession of the mortgage company you are still responsible for everything - living there or not.....

Going to the trouble of selling it? If you had lots of equity in the home, I would say - yes............... no equity, don't bother wasting your time and efforts.