Decision time....

[ace300s]

We're doing #3.....

We filed BK7 (California) in 02/12 and discharged in 06/12. We haven't made a mortgage payment in 15 months and still living in the house.

Nothing in regards to foreclosure yet. Lender did ask a couple of months ago if we wanted to consider a modification. we figured why not see what they come up with. Hoping for a super low interest rate and some help with being under water. If not we'll continue to wait for the foreclosure process to start...

So right now its just stay here and save money. In your case why not just stay and save money as long as you can.....Hope this helps.

[brokeinfl]

I would vote #3 and stay in the house for the following reasons:

1. For getting a new loan in the future- currently there is no difference in lending guidelines between a short sale, FC, died in lieu, etc. a loss on property is a loss on property as per current underwriting rules (there is talk of showing favoritism to a "borrower assisted" loss such as a short sale - but its just talk). So basically, why put yourself through he headache of helping your lender - and it WILL be a headache.
2. Save as much as you can while you stay - I know people that have stayed 2 or 3 yrs....rent free
3. Lender may still offer you some type of modification that is unpublicized/advertised (principal reduction, low rate, etc). If you move out it may be harder to get anything else done with your current loan.

ultimately you may have to move at some point but it could be a while before the lender forecloses (although they will likely threaten to - just remember they have to follow the legal process to take possession then get you out - so there should be plenty of time to coordinate a move)

Good Luck

If mortgage is discharged, does a mod create a new obligation?

[LadyInTheRed]

If mortgage is discharged, does a mod create a new obligation?

No, only a refi can do that.

[brokeinfl]

Thank you. #3 seems like the way to a real new start with some cash saved up, the gnawing fear in the back of my mind is, foreclosure process is nearing it's end, we've got lots of money saved, but then you find no one wants to rent to you due to your BK. I haven't researched this in my area yet, so fears may be unfounded.

[cgfromnc]

Thank you. #3 seems like the way to a real new start with some cash saved up, the gnawing fear in the back of my mind is, foreclosure process is nearing it's end, we've got lots of money saved, but then you find no one wants to rent to you due to your BK. I haven't researched this in my area yet, so fears may be unfounded.

i'm a landlord (a few houses nothing major) and I would still rent to you if everything else checked out...i.e. you were truthful with me during the application process...worst case i may ask for a little more money up front - which you will have b/c you have been saving


if it were me I wouldn't worry about that.......I would say the bulk of the people i have rented to over the last 10 yrs have had some type of credit issues....

[TheBajan]

My vote also goes to number 3. It really is a once in a lifetime chance to just pile up money while you wait for them to foreclose and unburden yourself at the same time. Talk about a fresh start! Wouldn't we all love the chance to start out fresh with no debt AND a big savings account! There are still ways to buy a house when the time comes.

[TheBajan]

Thank you. #3 seems like the way to a real new start with some cash saved up, the gnawing fear in the back of my mind is, foreclosure process is nearing it's end, we've got lots of money saved, but then you find no one wants to rent to you due to your BK. I haven't researched this in my area yet, so fears may be unfounded.

I'm also a landlord and I agree with cgfromnc. It's a non-issue if I know I can trust you. I'm more interested in your character and current financial ability to pay than I am in the BK.

[brokeinfl]

Appreciate the reply. You're not in NE FL. by any chance? Yeah, I was guessing that was the case, since it appears many have gone before us in this crazy process. If it were just myself, no problem, but with a wife and kid...just had visions of sleeping in the minivan.

[Floridagail]

We are doing Number 3, I hate the not knowing of where we will live too, But the upside is, We have saved over $40K in our retirement acct, now that Hubby finally had to file 7 yesterday, we hope to have another 6mos. We are close to 65 and no way wanted to get left with upside down house no way to sell. We are not really worried about finding a place to live. We hve no criminal background and no evictions.

[clunk]

So a quick update our house has been on the market for almost 3 weeks, and we have received two offers. On was 20k below list price and the other came in right at list price. We "accepted" the full offer and submitted the paperwork to the banks...now it's the waiting game I guess....we decided we would give the banks one shot, so if they don't accept this offer with the other one as a backup offer, we will stop paying and let the foreclosure process start....

[Floridagail]

Did you have to submit application to do shortsale with financial info? How will you get release of lein on second? Both my sisters bought shortsales and the owner had to put money on the table at closing, has that been brought up.

[clunk]

Did you have to submit application to do shortsale with financial info? .

Yes, I understand that some people are hesitant to do this, but as we are fresh out of BK the banks already have all this information anyways.

How will you get release of lein on second?

The short answer...I don't know. Our real estate agent, although I brought it up didn't seem concerned about it.

Both my sisters bought shortsales and the owner had to put money on the table at closing, has that been brought up.

We have been very clear from the beginning that we weren't going to put any of our money into someone else's investment. So there will be no cash at closing or settling after the fact. Like I mentioned before this is a one shot deal, if it falls thru due to the bank' we will simply stop paying....whether we would keep it on the market at that point is another question.

[Floridagail]

BOA told us we would have to settle with 2nd mortgage company, that is reason I asked. I see no reason to do shortsale as it shows up on credit report the same as a forclosure. I need the money to save for my future, The bank has already made a killing on me. Good luck with the sale.

[clunk]

BOA told us we would have to settle with 2nd mortgage company, that is reason I asked. I see no reason to do shortsale as it shows up on credit report the same as a forclosure. I need the money to save for my future, The bank has already made a killing on me. Good luck with the sale.

Our HELOC is with BOA and the first is with Chase.....we included the house in the BK and didnt re affirm either loan. So at this point I'm not concerned abôut the credit report aspect. For us we would like to purchase again as soon as we clear the 2-3 post BK milestone, so we opted to attempt the short sale. The forclosure is still a viable option but it will restart the 3 clock vs no additional waiting on the short sale.

[Floridagail]

Shortsales do work out occasionally, My neighbors did one thru BOA , they were never late but wanted out of the upside down house right away. They did have to settle with second. They wanted to buy asap again also.
However another neighbor did shortsale also had to settle second and got their stuff stolen by new tenants. Keep us posted on how it all ends.