Do you agree with my attorney?

[capamando]

Hello,

It has been a few weeks since my last post...so here is an update for those who are just starting the process.. I also need some perspective concerning my first mortgage.

Okay, so at the moment what seems to be delaying my filing is that we transferred some $$$ from our stock account to an HSA and to our Roth IRA..Our attorney wants to wait at least three months or more before filing. In the meantime we are getting daily phone calls from our creditors. They are even calling our cell phones ( I thought that they weren't suppose to do that). We have for the most part ignored the calls except for a few calls when I advised them to call our attorney. Our attorney provided us, at our request, with a letter stating that we have retained them and are in the process of filing for bankruptcy protection. We will be sending this letter to all our creditors...by the way our attorney assured us that the calls will continue either way until we actually file for Chapter 7. I guess it will make us feel better to let them know.

So here is our situation that we hope to receive some perspective from this great forum.... We have continued to pay our first mortgage..not the second. We are not reaffirming neither at filing time but we were planning to keep paying our first mortgage in the hope that in the future we could negotiate with the second mortgage lender. Our attorney understands that rents in our area are just as much as what we are paying to our first mortgage lender so our plan to keep paying the first makes sense from our perspective. However, he is advising to stop paying the first mortgage after we file and plan to move out at some point in the future which could take several months or even longer. Our attorney feels that in the eyes of the lender and perhaps the courts, the fact that we did not reaffirm the note indicates to them that we are relinquishing our Florida home exception and should be in the process of moving out of our house. So continuing paying the first mortgage is a contradiction that may complicate matters in the future. Sorry, for this long explanation.... Do you agree with my attorney? By the way, I have no problems with our attorney...just looking for other perspectives from the generous people in this forum..

Thanks again.

[HHM]

It depends on the goals here...

If your goal is to not keep the house, then the attorney's advice is fine. However, not sure you need to keep paying the first if the goal is to ultimately surrender the house.

If the goal is to keep the house, then obviously, you shouldn't stop paying the first mortgage. Your attorney is probably right, it probably makes no sense to keep the house so might as well cut the chain sooner rather than later.

[capamando]

It depends on the goals here...

If your goal is to not keep the house, then the attorney's advice is fine. However, not sure you need to keep paying the first if the goal is to ultimately surrender the house.

If the goal is to keep the house, then obviously, you shouldn't stop paying the first mortgage. Your attorney is probably right, it probably makes no sense to keep the house so might as well cut the chain sooner rather than later.

HHM,

Thanks for your reply. I guess that our concern has more to do with any adverse consequences if we continue to pay the first after filing for chapter 7 and not reaffirming the note. We were looking for a way to stay as long as possible. We would take our chances with the second mortgage lender since it would make no sense for them to pursue foreclosure considering that they would not receive a penny for their effort and expense. Our house is presently worth less than what we owe to the first mortgage lender. We owe $100k+ on our first and $65k on our second... the house is worth around $85k at the moment. One more question, if we were able to negotiate with the 2nd mortgage lender and have them release the lien, could we not then stay in the house indefinitely as long as we continue to pay the first? or the fact that we are not reaffirming leaves us at risk that the 1st mortgage lender can foreclose at anytime that they find beneficial to them?

Thanks HHM

[HHM]

I am sure some of our Florida contingent will chime in.

You are correct, if you stay current on the first, that leaves open the option of settling with the second after the BK and keeping your home. I don't think mortgage lenders in Fl are really pushing for reaffirmation agreements, so you can probably retain and pay the first mortgage with no risk of foreclosure. No matter what, DO NOT reaffirm the 1st or the 2nd. You are better off leaving yourself the option to walk away with no financial consequence.

[psquared]

Capamando,

I am in Central Florida and I did not not re-affirm. In fact from my conversation with Wachovia Bank it appears they don't want to re-affirm. I owe about $95+k and its worth about $60k, but the mortgage payment is less than any rent in the area so it makes sense for me. It sounds like you may be in the same situation.

Just because you do not re-affirm your first does not mean that you won't be able to keep paying the first and stay in the house.

I did not have a 2nd so not sure if that makes a difference or not but I would think your 1st doesn't care as long as it is not them as well.

P2

[SMinGA]

No rule against calling on cell #s, as far as I know. They can (and will) call on any # they can find for you. And your atty is right, some calls will come in up until you actually file - though they may slow a bit. (Perhaps not daily calls from the same company!)

The atty may be recommending the house as not worth keeping since you are upside down no matter what. Perhaps tough love, telling you what you need to hear rather than what you want to hear. On the other hand, if you cannot rent for less than the 1st mortgage payment and you're confident the 2nd will not move to foreclose, then you seem to be going about things the right way in terms of paying the 1st & not paying the 2nd. I think some wait til after filing, or perhaps even the 341, to stop the 2nd - especially if the 2nd payment is needed to show no dmi.

[capamando]

Hello,

HHM, SMniGA and psquared thank you for your sound advice. SMniga, we have already stop paying the 2nd... sorry but what is dmi? So, what I am gathering from all of you is that if we want to keep the house for as long as we can, paying the first and taking our chances with the 2nd is ok....and it will not have any effect prior/after filing nor at the 341, even if we are not re-affirming.... am I right? We just want to keep the option of not losing our house if we can negotiate something with the 2nd. mortgage lender after chapter 7 is finalized, because we are only 10k or 15k under water with the first and that is more financially acceptable.


Thank you again.

[SMinGA]

DMI = disposable monthly income.

If you have too much DMI, you may find it hard to file ch. 7. I am not certain if you can claim the 2nd mortgage as an expense if you are not paying it.

[researchnerd]

It's telemarketers who are now allowed to call your cell. People you have an existing agreement with can call you on whatever phone numbers they can find.

[frogger]

No rule against calling on cell #s, as far as I know.

The "rule" is that cells should not be called using an auto-dialer.

[frogger]

It's telemarketers who are now allowed to call your cell. People you have an existing agreement with can call you on whatever phone numbers they can find.

And all of your information is for sale to telemarketers and every other bottom feeder out there.

You ever give your cell number and name when ordering a pizza? If so, you probably got sold...