I think I have to foreclose?

[boom2]

Hello everyone. This is my first post. I found this site last night and was amazed at all of the information you all have here! What an incredibly helpful group you are.

My situation is this. I had a chapter 7 bankruptcy discharged in January 09 in Las Vegas, NV. At the time I intended to keep the house for another year or two and then move my children out of Vegas at last.

The mortgage consists of a first, $159,000 to Chase and a Heloc $135,000 to HSBC. The home is worth $135,000 as of this week.

I was just told that a heloc can never be included in a short sale or foreclosure and had a stress attack as I am a single mom of 5 year old twins and know I won't be able to afford rent and a huge deficiency payment both in our new life.

Then I learned that often, when you have a bankruptcy, the mortgages are included and you can actually just walk away and start over freely.

Then I learned that this is true, but there is a time limit and it is different for each bank and I'd better stop paying immediately or the bank will see my payments as an intention to keep the house and redefine the loans as active and I would suddenly be responsible for the full amount again!

I had hoped to stop paying on the heloc now and keep current on the first for another year and then leave, but was told today that if I stop paying on the heloc, they would foreclose, regardless of how much the house is worth, so it would be safer to stop paying both now and just find an apartment for the months remaining until we are ready to leave town. Obviously it would have been easier to only move the family once, but if it means avoiding the danger of being stuck with the heloc amount I guess maybe I should just let it go. What are your thoughts?

[AngelinaCatHub]

Hello everyone. This is my first post. I found this site last night and was amazed at all of the information you all have here! What an incredibly helpful group you are. Welcome, you are correct, we try.

My situation is this. I had a chapter 7 bankruptcy discharged in January 09 in Las Vegas, NV. At the time I intended to keep the house for another year or two and then move my children out of Vegas at last. OK, Did you reaffirm? You are somewhat educated with a Chapter 7 if you had one in January.

The mortgage consists of a first, $159,000 to Chase and a Heloc $135,000 to HSBC. The home is worth $135,000 as of this week. Whoa, outa site.

I was just told that a heloc can never be included in a short sale or foreclosure and had a stress attack as I am a single mom of 5 year old twins and know I won't be able to afford rent and a huge deficiency payment both in our new life. Not enough info about your reaffirm. If you did not, rent a place and let it all go. If not, see a lawyer and leave the place and rent. They can't get blood out of a stone.

Then I learned that often, when you have a bankruptcy, the mortgages are included and you can actually just walk away and start over freely. Again, did you reaffirm your mortgage????? You have to know this and for help so do we.

Then I learned that this is true, but there is a time limit and it is different for each bank and I'd better stop paying immediately or the bank will see my payments as an intention to keep the house and redefine the loans as active and I would suddenly be responsible for the full amount again! If you did not reaffirm, B.S.

I had hoped to stop paying on the heloc now and keep current on the first for another year and then leave, but was told today that if I stop paying on the heloc, they would foreclose, regardless of how much the house is worth, so it would be safer to stop paying both now and just find an apartment for the months remaining until we are ready to leave town. Obviously it would have been easier to only move the family once, but if it means avoiding the danger of being stuck with the heloc amount I guess maybe I should just let it go. What are your thoughts? Thoughts are relative, opinions are many as everyone has one (like bellybuttons, LOL). The second mortgage cannot repo your house before they purchase the first mortgage. If both are with same bank they could merge it paper wise. If it were me, (after talking to a real lawyer) I would unload and start out new. You cannot bk again for some time.

Best of good fortune. Welcome to our Forum. You are with friends here. 'Hub

[boom2]

Thanks AngelinaCatHub,

On the page of the voluntary petition that says Chapter 7 Individual Debtor's Statement of Intention 3 things are listed as "Debt will be reaffirmed pursuant to 11 USC 524(c)
The first mortgage, the heloc, and the car loan. I have received paperwork for the car loan that says I reaffirmed it and signed it and sent it in, but haven't had any contact like that from either home loan. So I am not sure if I reaffirmed them or not. The paperwork I get from them each month says it is not a bill or attempt to collect debt, but this page of the petition makes me very nervous. I can't keep it, can't sell it. This is really my only hope.

[eddiep]

OMG you owe more than twice what it is worth!

I wouldn't freak out too much about that page, it sounds like you may have done a "ride through". where you listed your intentions as keeping rather than surrendering, on the petition you only have two options, keep or surrender. But if you did not sign the reaffirmation paperwork you are not obligated to keep paying the mortgage and you will not be responsible for the difference.

Call your lawyer, call the bank and ask them, if they said you signed it ask for a copy of the signed agreement, but I suspect you did not based on the "not a bill or attempt to collect debt" statement.

Oh yeah run!!

[boom2]

Never ever thought I would feel grateful or relieved about walking away from my house. I love that place. I fought to keep it for so long, but now that the time has come I just kind of want to walk away with a little dignity and start planning the rest of my life.

Thanks for your insights, guys. I've got to go for now, but I'll check back in for sure tomorrow to see if anyone else adds any thoughts to this.

[boom2]

Yes, I owe more than twice what it's worth. Amazing isn't it? I still am in shock. Honestly had no idea that this was ever even remotely possible. I remember the talk of a "bubble" in the housing market and thinking "A bubble, how bad can a bubble be?"

I remember listing the house to sell a few years ago and the first or second day a man offered me $350,000 for it and I decided that since that happened so fast and my neighbor's house just sold for $370,000 that I should wait a bit and see if I got a better offer. Over the next week or two things suddenly dropped and I never got another offer that would cover my loans. Some big freakin' bubble!

[StartingOver08]

Wellllll, sounds like the information you received about the HELOC came from a collector!
The second can foreclose, but in order to do so, they would have to pay off the first mortgage to successfully protect their interest. Why would they spend another $159k to protect $135k that has already dissappeared with no hope of recovery? (Since the value is no longer there, they can only sell the house for market value - the second/HELOC is out of luck). These collectors will say anything to get you to pay. You probably have discharged the debt, but please check with your attorney first.

I would then try the Ch 7 lien strip. It does not exist in the law, but there are several on this board attempting it:

There are people that are keeping their homes and continuing to pay on the FIRST ONLY. They stopped paying on the second (if the mortgage was discharged). After several months of not paying, you will then be able to negotiate with the second for a lump sum payoff (some are working on a 10% of the balance). When you do this, make sure the HELOC (2nd mtg) lien is removed at the time of payoff. To do that you must get a written satisfaction of mortgage from the lender at the time of payoff to remove the lien/satisfy the mortgage. Record it in your county so it shows as paid. Check Liz's posts and some of the others. This opportunity exists right now because of the housing market. You might be in much better shape than you think.

[CCCrazy]

Question about CatHub's response...both my mortgages are with Wells Fargo and I have stopped paying my 2nd...so if WF wanted to, they could say hey, this guy is paying his first consistently and has no intentions of stopping, so we'll just merge the two loans together and he'll pay us the whole thing that way? I have never heard of this...if they did that, wouldn't I be seeing a huge increase in the principal owed on my 1st mortgage statement? Surely a bank can't do this...

[StartingOver08]

Question about CatHub's response...both my mortgages are with Wells Fargo and I have stopped paying my 2nd...so if WF wanted to, they could say hey, this guy is paying his first consistently and has no intentions of stopping, so we'll just merge the two loans together and he'll pay us the whole thing that way? I have never heard of this...if they did that, wouldn't I be seeing a huge increase in the principal owed on my 1st mortgage statement? Surely a bank can't do this...

I'm not HUB, but ...Just because Wells services both loans it does not mean they own both loans. Most of the time there are different buyers for first and second loans. They can NOT merge the loans together. In fact, usually the servicing of the first and second are handled by different departments, even if they are the same servicer (in this case WF).

[OhioFiler]

It looks like the OP reaffirmed her car but not the mortgfages. That is fantastic news for her! I'd stop paying both the 1st and 2nd immediately and live rent free for as long as you need. It would take some time for the foreclosure process to get you out.

[boom2]

Thanks very much, everyone! It is so nice to have the benefit of all of your experience. It does help give me peace of mind. Well....I guess I've made a decision. I'm going to stop paying and pray that I am actually protected by the bankruptcy. It is really the only viable option I see at this point.

Best of luck to you all!!