Appraisel now what?

[IBA]

I spoke with the lawyer last week about our issues. My pay has been reduced... He advised me to get an up to date appraisel on our property. I contacted the same guy who performed the appraisel when we purchased the home 5yrs ago. When we purchased the home it was $144,500 today it came in at 112,000...We have a secound that is 24,000 & 1st is 143,000...He is going to try to strip the 2nd on a 13 with about 7k in credit card...Now I am considering should I just let the mortgage company have it back...We do like the home & location however unsure what to do...I have a meeting with lawyer next week...You have any input? Thanks

[debee]

If you take the house through BK, you will *probably* have to reaffirm.

IBA - If the lender does not insist on a reaffirmation agreement (& most don't) you don't have to sign one. Most debtors just indicate "reaffirm" on the Statement of Intentions and then continue to make payments without ever signing an agreement. This allows them to stay in the house without being personally liable for the debt anymore. The first and second mortgage holders would both still have liens on the property. However, in your case, since it's underwater it's unlikely that the 2nd would foreclose anytime soon.

If you elect this "stay and pay" route, the 2nd won't go away by itself. What works for some people is this: stop paying the 2nd and wait for a long time. Then offer them 5-10% of the loan amount to remove the lien. Most lenders take it because it's better than what they're currently getting which is nothing.

Another option would be to stop paying the first and second both and live rent-free while waiting for the foreclosure process to run its course.

These are some option to discuss with your attorney. Best of luck to you in this process.

[IBA]

Well we had the meeting with our lawyer yesterday after getting the appraisal done...Spent about 3hrs filling out paper work & answering several questions. We did not qualifiy for chapter 7 only 13...The estamated pay back was going to be around 2k each month...we do not think we can afford that...We are not going to keep the home being that we are 59k under water. We plan to ride the forsclosure out as long as we can. He advised us to return to his office in 3-4 months...At this time my pay will have taken another hit which will hopefully allow us to reach chapter 7 guidelines...Anyone have any suggestion on what we can do until then...I expect the phone will be ringing off hook now...