Foreclosure after Chapter 7 and loan mod....Can I still walk?

[Dansky1978]

First I would like to say thank you to all of you on here. I have been lurking for a year and a half. This site got me threw my chapter 7 last January. We kept the house in the bankruptcy, and BOA finally after 2 years of making trial payments, gave us our modification. In the end it only saved us $200 a month, but our interest was locked in. Our chapter 7 was finalized January 7,2010. Looking through out Petition filed with the court. On form 8 "Chapter 7 Individual Debtors Statement of Intentions", under our home loan the "other" check box is filled in and it says"Debtor will continue to make regular monthly payment". The "Redeem the property", and "Reaffirm the debt" check boxes are blank. My question is can I still walk away? My wife still cannot find work, and all of my overtime was cut. Didn’t think it would last this long. Thanks Again!

[Charlie777]

I think you need to ask your BK attorney.

The debt was discharged, you don't owe but the bank has the security interest in the house. In order to reaffirm, you and the bank would have had to sign an agreement which would have to have been approved by the judge before your discharge.

What's murky to me, is that you made a loan modification with the bank after discharge. I don't know whether that reaffirmed the debt - I don't believe it should have, but this gets tricky.

[goodyphilips]

Yes BK attorney would be best placed to help you. but yes even i think you got some magic wand of sorts which let you strike loan modification with the bank after discharge.

[Dansky1978]

Thanks for the feedback. I talked to my attorney this morning and he said that he never reaffirms hoam loans because most people realize afterwards that the should of surrender the house. He said even with the loan mod I can walk away tomorrow, or walk away 5 years from now. Basically I am making a rent payment, and get to keep the house after 30 years.

[helpme2010]

I spoke with my attorney about this as well. If you did not reaffirm the house, you can get a loan mod and walk away at any time without any commitment to the loan. I am attempting a loan mod post bk as well and I think this is the smartest thing you can do. If you get the loan mod, you can continue living at a reduced payment amount for a longer period of time. If you can't make the payments, you can ride it out a little before having to go rent someplace else.

[goodyphilips]

that's really cool and wonderful to know!!!!!

[upward]

So glad to hear some of this. We were discharged Feb. 2008 did not reaffirm home loans. Stayed in the house. Stopped paying on the 2nd with Wells Fargo a year ago. Firgured, why was I still paying them 550 a month for an under water mortgage. They have not sent a statement or done anything. We owe 340K on the first with Aurora and 75K on the second. The house is currently worth about 240K. We have a 5 year rate freeze on the first and have been paying interest only. Just received a letter saying we are now responsible for principal and interest and payment will be increasing about 600.00 a month. We can't afford that! They told me to fill out the loan mod paperwork. I definitely don't want to sign anything that would reaffirm me on this debt. Figure we'll start the paperwork on the loan mod and possibly start short sale process to stall out the bank and save up some money. I was wondering about the loan mod and having the reaffirm the loan. Lived here 16 years. I know we could probably rent something bigger and better for what our current payment is. Just wondering if they will send NOD if we stop making payments but have turned in loan mod paperwork?
This forum has helped me through some pretty dark times. I continue to come back and find it so helpful. I recommend it to anyone who is in financial distress.

[qsr]

That statement of intentions form is basically meaningless. If you don't reaffirm the mortgage, then you have no obligation to keep paying for it. It's at the discretion of the Lender to let you stay in the house. I know--I lost mine today almost a year after filing Chapter 7. They refused to consider me for a mod because they were out of time and knew they would need to re-file the paperwork if they waited on the sale.

This does make me worry about the car, though. I didn't reaffirm. My lender just asks me politely to pay them every month and I continue to do so. I hope I still own the car at the end of the term? If not I'll go buy a new car and pay usury rates.