New Questions about walking away from house.

[Freddy03]

Ok so last week I was 100% sure I wanted to stay in our home for a couple of reasons -

1. Did not want to uproot the kids from their schools.
2. Did not want family to know about the BK.
3. Do not want to run into problems finding a nice rental home after the BK/Foreclosure.
4. We have 2 tiny dogs.


But I was thinking I DO NOT want to come out of BK and a few months down the road we are in the same possition b/c of our high mortgage.

Right now I do love my house, love the location but hate our neighborhood (27 houses - 5 are rented out - 4 are vacant)

We are underwater about 90K (because we stupidly refinanced a few years ago and added all our other debt and car payment to the mortgage).

I have also heard horror stories of people renting then forclosure papers show up and they have 30 days to get out.

So my questions are:

1. What happens if we stop paying our mortgage after the BK?
2. What impact would a FC and BK have on our credit?
3. How hard would it be to rent?

[SMinGA]

The FC would not have an impact on your credit. It would have an impact on when you can purchase a house again, however. The actual FC is not a money/billing matter but a title changing back to the bank legal process. The FC timeline would depend on your state, so you might have a few months or could possibly have much longer to stay in the house before having to move.

Many have posted about having no trouble finding a place, just offering a higher deposit.

You don't really have to decide now. The important thing would be NOT to reaffirm. After that, do what works best for you.

One thing to keep in mind: if you have a HOA, bankruptcy only discharges fees up to the filing. Future HOA fees would be your responsibility until the house changed title.

[Freddy03]

The FC would not have an impact on your credit. It would have an impact on when you can purchase a house again, however. The actual FC is not a money/billing matter but a title changing back to the bank legal process. The FC timeline would depend on your state, so you might have a few months or could possibly have much longer to stay in the house before having to move.

Many have posted about having no trouble finding a place, just offering a higher deposit.

You don't really have to decide now. The important thing would be NOT to reaffirm. After that, do what works best for you.

One thing to keep in mind: if you have a HOA, bankruptcy only discharges fees up to the filing. Future HOA fees would be your responsibility until the house changed title.

Thanks - I haven't even talked to my husband about it yet. I just checked some homes for rent in our zip code and yes the houses are nicer, a little bigger but only about $200 cheaper than our mortgage.

So I can discharge our back HOA dues? That's great news b/c our HOA dues are pretty cheap (only 300 year) but long story short we owe for a few years b/c the ex management co applied payments incorrectly and then ditched us so we stopped paying when there wasn't a board. Still no HOA board.

[tobee43]

freddy, we surrendered our home and have no regrets, however, no small children at this time to figure into the equation. actually the older they get the more difficult the move is...unless you move within the area and rent.

in our case we tried everything before we resigned ourselves that we had to leave after 33 years...it was the place we had every xmas and holiday...where were brought our children home from the hospital all wrapped neatly in little baby blankets...what sweat or SWEET LOL thoughts....UNTIL........

we tried everything to stay ....loan mod that didn't work...borrowing money...getting deeper in it...when one day we woke up and thought??????.......

it needs a new roof...new fence..(at least 15k) new bathrooms, new kitchen....has mold, needs new septic, new well, new wiring....and so on and more.... most likely at least 150k if not MORE worth of work.....holy cow!!! it's sooooo big we had it almost every room closed off except 3 because it was to expensive to heat and cool.

the best thing we did was leave that horror of a house. of course i still have the wonderful memories...they will alway be with us, no matter where we are.

now...if you wait until AFTER the chapter 7 you are leaving yourself open for foreclosure fees...and in some states like the one we were living in, we would have owed the difference between what the bank sold it for and what we owed. additionally, in the state we came from there were no FEE limits set my law for forclosures so we knew people that really honestly were charged between 50k-100k JUST FOR FEES!!!!!

so, for us it was no brainer...but still difficult. looking back now, it was the BEST thing we ever did other than file for bankrutpcy!!

best of luck with your decision...it's a hard one sometimes...do the pros and cons...

also...just to let you know my daughter recently relocated and her home it still for sale. her feeling is she an her husband can care LESS about ever owning a home again because of all the problems...they'd rather have the landlord fix the problems...i'm not certain i agree with that...but you should see the house they live in now..it's absolutely beautiful. she's renting her other place until maybe it sells.

think about it...it's a hard choice!

[tobee43]

You don't really have to decide now. The important thing would be NOT to reaffirm. After that, do what works best for you.

One thing to keep in mind: if you have a HOA, bankruptcy only discharges fees up to the filing. Future HOA fees would be your responsibility until the house changed title.

well, i would decide prior to submitting your petition because otherwise the mortgage will not be discharged...

and that is most certainly correct about those HOA fees...and some are very high!

[SMinGA]

HOw do you mean?

If you do not reaffirm the mortgage - and file ch. 7 then the mortgage gets discharged. Just not the security interest, so you either keep paying or ultimately give the house up.

well, i would decide prior to submitting your petition because otherwise the mortgage will not be discharged...

and that is most certainly correct about those HOA fees...and some are very high!

Regarding the HOA fees, I know fees prior to filing can be discharged - but if you do not decide in advance what your final intention is on the house that can be a problem. As in, if you don't resolve the past due fees the HOA can move to foreclose even if you're not behind on the mortgage. Sounds like your HOA is disorganized, not sure it would happen, but it COULD. If you give up the house though, you'll owe the $300/yr until the title changes hands...

[Freddy03]

HOw do you mean?

If you do not reaffirm the mortgage - and file ch. 7 then the mortgage gets discharged. Just not the security interest, so you either keep paying or ultimately give the house up.



Regarding the HOA fees, I know fees prior to filing can be discharged - but if you do not decide in advance what your final intention is on the house that can be a problem. As in, if you don't resolve the past due fees the HOA can move to foreclose even if you're not behind on the mortgage. Sounds like your HOA is disorganized, not sure it would happen, but it COULD. If you give up the house though, you'll owe the $300/yr until the title changes hands...

ok I'm confused (nothing new) I have def decided NOT to re-affirm the house. We planned on staying just keep making the mortgage payments.

So what happens after the house is paid off in 30 years is it ours?

What happens if the housing market does (miraculously) picks up in a few years and we could sell it?

Is it ours to sell?

What happens if we can't keep up with the payments after BK?

Thanks

[Freddy03]

Oh yeah I know all about HOA moving to foreclose. Our first year in we had that happen over $150. Thats when there was a board and management co. Right now there is only a treasuer b/c everyone quit. I have told him about our $$ and have been making small payments here and there to him. I still don't feel right about giving him the money (b/c who knows what he is doing with it).

[ccsjoe]

ok I'm confused (nothing new) I have def decided NOT to re-affirm the house. We planned on staying just keep making the mortgage payments.

So what happens after the house is paid off in 30 years is it ours?

What happens if the housing market does (miraculously) picks up in a few years and we could sell it?

Is it ours to sell?

What happens if we can't keep up with the payments after BK?

Thanks

Freddy, you need to think of this as two separate items. Item 1 is the mortgage, which is a loan that you may seek to discharge.

Item 2 is title to the house. The discharging of the loan does not alter title by itself. It merely takes away the mortgage company's ability to collect on the loan against you. There is still a lien on your house and your name on the deed.

Yes, if you finish paying it off, the title will be cleared and be all yours.

I know it may be confusing, it is to me, but mortgage and title are two separate animals.

Hope this helps

[Freddy03]

Item 2 is title to the house. The discharging of the loan does not alter title by itself. It merely takes away the mortgage company's ability to collect on the loan against you. There is still a lien on your house and your name on the deed.

Thanks!

So what if something happens and we can't pay the mortgage after the BK? Do we owe the balance? Or just walk away when they kick us out?

[ccsjoe]

You walk away when they kick you out. Here's how it normally goes: You stop paying, they will eventually move to foreclose via sheriff's sale or public auction (depending on which state you're in) or they will ask you to execute a deed in lieu. If you start asserting your rights to them, nicely, and the economy is still as messed up, you might be able to negotiate C4K (cash for keys) to surrender the house without destroying it. When will this happen? You've read as much as I have about how quick or sloww banks are moving to foreclose, some take months/years, other take weeks.

[tobee43]

Thanks!

So what if something happens and we can't pay the mortgage after the BK? Do we owe the balance? Or just walk away when they kick us out?

if the mortgage is listed and discharged on the 7 and there is no distribution of assets ordered....then NO...you have no financial resposibility at all to the bank for the balance of the mortgage. and..........we could have stayed another 2 years without paying a dime...they, the bank, STILL has not forclosured or had a sheriffs sale as yet... so you can stay and just save money as long as possible..

however, the deed .....NOT the title still remains in your name or you and your spouse...so it will not have clear title until your names are removed which happens either with a warranty deed and a release...or a transfer once the actual sale takes place...since the bank cannot resell the house without a clear title.

[neverlearn]

I have to say that after going through 14 months of pure hell getting a loan mod with chase. They charged off the second mortgage to a CA and then getting a permanent mod $600.00 more per month than the original loan, was not fun.

Just having your name on a mortgage statement and being a glorified renter of the banks property and still being underwater is not the American dream.

As long as you have a roof over your head any place you live you can call your home.

When I am ready to file BK I will not reaffirm with chase...

[tobee43]

I have to say that after going through 14 months of pure hell getting a loan mod with chase. They charged off the second mortgage to a CA and then getting a permanent mod $600.00 more per month than the original loan, was not fun.

Just having your name on a mortgage statement and being a glorified renter of the banks property and still being underwater is not the American dream.

As long as you have a roof over your head any place you live you can call your home.

When I am ready to file BK I will not reaffirm with chase...

it was well over a year with them for us with the loan mod and NO ANSWERS....and while we were in loan mod they served us with foreclosure!!!

we called up the loan officer and he says...o...they weren't suppose to do that...duhhhhhh.....well it gave us 30 days to answer or get out....we got out after 33 years...

although our atty said lock it and leave it...i couldn't do that it's not in our make up. so i both called and emailed this loan officer and he was sooooooo pissed off at us for leaving and why didn't i call him blah blah blah....

i'm like look here....if one hand doesn't know what the other hand of your bank is doing that's not our fault...and why didn't i call you...ASS...it was a summons....so i called an atty...and by the way the summons was from U!!!

they were absolutely terrible, although the loan officer was good, but his hands were tied up in the red tape. it was at the "beginning" stages of the loan mod craze and although the newspapers headlines everyday about how great these wonderful NEW programs are in place to help...we knew NO ONE that got one...ever..you're the first i heard...LOL!!! and it's been now over 2 years...

[neverlearn]

it was well over a year with them for us with the loan mod and NO ANSWERS....and while we were in loan mod they served us with foreclosure!!!

we called up the loan officer and he says...o...they weren't suppose to do that...duhhhhhh.....well it gave us 30 days to answer or get out....we got out after 33 years...

although our atty said lock it and leave it...i couldn't do that it's not in our make up. so i both called and emailed this loan officer and he was sooooooo pissed off at us for leaving and why didn't i call him blah blah blah....

i'm like look here....if one hand doesn't know what the other hand of your bank is doing that's not our fault...and why didn't i call you...ASS...it was a summons....so i called an atty...and by the way the summons was from U!!!

they were absolutely terrible, although the loan officer was good, but his hands were tied up in the red tape. it was at the "beginning" stages of the loan mod craze and although the newspapers headlines everyday about how great these wonderful NEW programs are in place to help...we knew NO ONE that got one...ever..you're the first i heard...LOL!!! and it's been now over 2 years...

chase was terrible to deal with, you could call one cubicle and get an question aswered then hang up. Call back and get the next cubicle and that person would tell you a different answer to the same question. It was so frustrating you had to do nothing but laugh.

It was like living in the movie Groundhog Day making calls to them. Finally I just gave up, cancelled the land line. 8 months later they put me on a trial plan for four payments on the first loan at $800.00 below the original loan payment. I made four payments as agreed then waited. Three months after the last trial payment they sent me perm mod for $600.00 more than the trial payments. But at least now it's a fixed rate and no more I/O ARM that could adjust 2% per year.

They charged off the second loan of a 108K 6 months after the last payment. The CA tried to deal with me but I sent them a letter telling them to prove they own the loan and that it is really my loan. That was this past Feb and I heard nothing yet.

When I talk to BK atty here this month that is one thing I need to bring up, this CA could have a lein so I may have to go 13 to strip it then go 7. The lein means nothing since the first is still underwater but they can lein for up to 25 years...