Two houses..... will I lose them?

[NJdotcom]

Ok heres the situation....

I think I have gotten in over my head possibly and I am looking for a way to save myself.

I currently have a home i live in which I have a mortgage through Country Wide.

I visited a home auction a couple weekends ago and ended up bidding on a home (that was valued at 240K). When the bidding was done I bid 72K for this auction home. I now have 30 days to close on this home and I still have my current home.

I have preapproval through Country Wide for the second home, If I close on the new home with Country Wide.... then file for BK on the first home would this;

#1. Throw up a red flag for BK?
#2. Would this be an issue at Country Wide?

Any comments or suggestions owuld be greatly appreciated.

[Flamingo]

You wouldn't be posting on here if you didn't see there was a problem. First I cannot figure out if you are in financial trouble and are considering filing BK how on earth were you able to qualify to purchase another home through a home auction? You have 30 days to pay for this home purchased via the auction. Then you want to file bankruptcy on your first home that will hold the mortgage on the second home.

Before you purchased the home at the auction, you should have consulted with a real estate expert, financial advisor or received advice from a lawyer, but I know sometimes how we all act as to being impulsive at certain times.

Best of luck to you.

[NJdotcom]

Its not that I am in financial trouble per se....

What the real deal is that I have bought this second home at home auction and it will most likely take WAY too long to sell the home I currently live in. This is the part where I think I should have gave it more thought.

Also the mortgage for the home that we bid on from Auction is a NEW mortgage. Not a Second on the first.

Any suggestions, thoughts, or previous experiences shared would be appreciated.

[keepmine]

I have preapproval through Country Wide for the second home, If I close on the new home with Country Wide.... then file for BK on the first home would this;

#1. Throw up a red flag for BK?
#2. Would this be an issue at Country Wide?

What do you think it'll look like?
Expect CW to complain loud and long if you file bk abruptly and leave them with a deficeincy balance on the first home.

[justbroke]

#1. Throw up a red flag for BK?
#2. Would this be an issue at Country Wide?

This is the perfect case where Tax and/or Pre-Bankruptcy Planning would have been great!

Having wrote that, what Chapter under the Bankruptcy code do you intend to use? Are you actually behind in payments? Are you trying to cure a default? Are you just trying to use Bankruptcy to break the first Deed of Trust (Mortgage/Note)?

What you posted is riddled with issues! If you now have a $240K home that you purchased for $72K... and actually have about $170K in equity, then you have some Bankruptcy-related issues!

You need to consult a good tax attorney and a good bankruptcy lawyer.

I'm not a lawyer, and my case is different than yours (I have a primary residence and a second residence that I rent). In your case, personally, I'd try to do a "Deed In Lieu Of" on the first home. You'll have to actually put it on the market, or have had it on the market for 90 days or so. This avoids Bankruptcy, which should really be a last resort.

That's just my opinion, I could be wrong.

[krielly]

Agreed, all the lending issues aside, if you file BK you now have almost $170K in equity you have to be able to exempt.

I am assuming you may be from NJ (based on your screen name). If that's the case, I don't believe NJ even has a homestead exemption. You would have to use the federal, which is around 20K I believe.

I wouldn't close on that 2nd home if I were you and was contemplating BK....