Question about Home Discharged in BK7

[ace300s]

I talked with my lenders central point of contact regarding a loan modification. Because my home is so far underwater, I told him any modification would have to include a principle reduction. He told me he has never heard of a principle reduction in their modifications (citi).

He then wanted to talk about other options like short sale or deed back to the lender (they'd give me a couple of thousand)....He said this would be better than a foreclosure on my credit.

My question is if I had the home discharged in the BK7, why would there be any advantage to me to bother with a short sale or a deed back to the lender? Wouldn't it take them months to foreclose?

Also, if the home was discharged in BK7. Would a foreclosed home do anything to my already damaged credit?

Just trying to figure out my best options......

HELP!

[justbroke]

The only advantage to a short sale or a deed in lieu (DIL) is that you could get the transfer of the property done sooner so that you can qualify for a conforming government-backed loan quicker!

Otherwise, it's a waste of time and your personal energy!

On another note, I thought that CitiBank was part of the group of banks which settled with the Department of Justice and the several State Attorney Generals and is now offering principal reductions? I know that Bank of America is offering principal reductions as part of the settlement.

[ace300s]

The only advantage to a short sale or a deed in lieu (DIL) is that you could get the transfer of the property done sooner so that you can qualify for a confirming government-backed loan quicker!

Otherwise, it's a waste of time and your personal energy!

On another note, I thought that CitiBank was part of the group of banks which settled with the Department of Justice and the several State Attorney Generals and is now offering principal reductions? I know that Bank of America is offering principal reductions as part of the settlement.

Good point on the settlement with the Department of Justice. I'll ask them.

Also, I agree, why waste my time. For me I think its better just to live rent free as long as I can.

[Floridagail]

We are in same boat with you, In our 60's , Our home lost value big time. We lost in 2008 stock market crash also. Our retirement is bust now.
We stopped paying our mortgage 25mos ago, only way we will agree to mod is if they lower principal. Which BOA will not do. The Banks lie, they want you to pay for 6mos and then they will decide if they will modify.and in some cases they forclose in meantime. We will not do a shortsale , Our neighbors did it , and it was a big hassle and 6mos of headache, the bank wanted them to put 5000 on table at closing also and they had to pay off the second mortgage.