? about mortgage

[basketsbears]

Hi,

I have read that sometimes lenders will change the terms of auto loans (redemption?) to correct being upside down and better interest rates. Will mortgage lenders do that too? We have never been late on our mortgage, are not planning on reaffirming debt, but wondered about if there was a redemption. I know there are a lot of programs out there for people that are behind, but wondered how BK (hopefully chapter 7) could perhaps lower our interest rate. We are probably about $20,000 upside down on house.
Our mortgage is with Union Savings Bank - has anyone dealt with them? I had tried to refinance, but house was appraised less than what we owe, and credit at that time was border-line (mid 600's).

Also, I have thought (haven't talked with DH about this) of finding a rental home instead that perhaps we could purchase (rent to own or something) that we would like better than this home. The biggest problem with that probably would be we have 3 dogs & 2 cats. Is that a good idea?

I also wonder, is it better to let home go back, be foreclosed on sooner than later, so pretty much everything (BK & foreclosure) is close in time so in the future if we want to purchase a different home the 2-3 year wait for BK and foreclosures would be over. If this would turn out to be our plan, is it better to find rental home now, or wait until after Ch 7 is filed and stop paying and save $? We are OK staying here, but we had always planned on getting a home closer to retirement (we are both 54) that would be better suited for us. Or, is it just better to wait for economy to turn around and sell home for maybe a profit and just buy a different home at that time?

I would appreciate any thoughts/experiences others have had. Just trying to see what is available out there.

Thanks again for all the great experience and knowledge!

Lynn

[lrprn]

I have read that sometimes lenders will change the terms of auto loans (redemption?) to correct being upside down and better interest rates. Will mortgage lenders do that too?

The bk law specifically includes a path for auto owners who have owned their cars for more than 910 days before filing bk to drop the car's loan value to the car's current market value. However, the bk law includes no such rules for home mortgages

The chances of getting your mortgage lender to change the terms as a part of your bankruptcy is very, very low. Changes to your mortgage can be done outside of bankruptcy (HEMP, for example). However, you need to do this by dealing directly with your lender BEFORE you file. Some lenders are more likely to work with you than others. Overall, the members in this forum have had very mixed experiences getting their mortgages adjusted to something you can live with long-term before or after filing. Most report not being able to get their mortgage company to come to the table and make any changes quickly. Most drag the process out for many months and only a few end up successfully getting better terms in the end. I wish I could be more optimistic.

Our mortgage is with Union Savings Bank - has anyone dealt with them? I had tried to refinance, but house was appraised less than what we owe, and credit at that time was border-line (mid 600's).

I don't recall seeing another member mention this particular mortgage lender. Members....any of you with experience attempting a mortgage adjustment with this lender?

Also, I have thought (haven't talked with DH about this) of finding a rental home instead that perhaps we could purchase (rent to own or something) that we would like better than this home. The biggest problem with that probably would be we have 3 dogs & 2 cats. Is that a good idea?

If you've already retained a bk lawyer already, this is a great question to ask him/her. If you haven't, then add this question to the many you intend to ask when you start interviewing at least 3-4 experienced bk lawyers in your area.

Renting with pets - especially this many pets - can be a challenge. You are more likely to have better luck with a private home or condo owner than you will with a corporate-owned apartment complex. It will also help if you are able to put down a sizeable damage deposit to cover the wear and tear your pets will put on a rental space.

One more thing to keep in mind - if you do end up deciding to surrender your home as a part of your bk, then talk to your lawyer about staying in the home without payment as long as possible. Many members have been able to stay in their homes while the foreclosure process moves forward for many months, sometimes even more than a year. Prepare ahead of time to find and be ready to move into a rental immediately you're notified about a date for auction being set. Your lawyer can give you a better idea of what his/her other filers have been experiencing when a home that is up to date on payments on filing day.

Or, is it just better to wait for economy to turn around and sell home for maybe a profit and just buy a different home at that time?

A 20K difference in your home's current value against your first mortgage isn't much depending on if your home is located in an area that is again increasing in value after the crash. If you can keep making your payments and your home is located in an area where the home values are indeed currently increasing, it may make more sense to try and stay in your home. If the home values in your area are not increasing, then it may make more sense to let the home go. Again an experienced bk lawyer can give you a better idea of what to expect in your unique situation with your current financial issues, income, assets, and expenses.

Keep us posted how things are going and best of luck! Hope all turns out well for you and your family!

[basketsbears]

Thanks for the answers. We probably will pay and stay. I will make notes and check with attorney.