Parents completed Ch 7 approx 2 years ago. Home and 2nd NOT reaffirmed. Payments current on first, no payments made on 2nd. First is approx $50k more than current market value of $125k. Payment monthly is $1400.
Reason parents have stayed in the home and made payments is that, given the tax benefits the cost has been about par with renting at $1100/mo. Dad makes decent money and they are doing well after shedding $90k of CC and $50k second mortgage caused mostly by health problems.
Dad is working 2 weeks on and 1 week off but health makes him want to ratchet down to 1:1. Looking to get monthly housing expense down between $500-$700/mo. They have about $90k in 401k now. I could step in and buy a home if they front the down and they could live in it and pay me the mortgage as long as they could afford. I know the whole BK process has been very difficult on my Dad's pride and me stepping in would be hard on him and he would like to take me out at some point.
My questions are about the affect on their current credit of walking away from their current residence. Of course the BK did it's job on the credit, but will walking away show a fresh late pay on their mortgage, which has never been late, or did their BK discharge stop that? Will a foreclosure, assuming ~12mo from the day they stop paying, be fresh on their CR and again basically trash their score again at that time? It would be my advice for them to stop making payments, bank the cash for a down and plan to move in 6-12 months. Would they be looking at 3-4 years before being in a position to finance anything?
I can't imagine that it would be logical for the current first on there current home to foreclose and agree to sell to me upfront to get rid of 2nd and then bring down to at least current market value?
Advice?
My dad has had 2 heart attacks in past 15 years, luckily none in about 8, but I need to get him working less at the age of 68 so he doesn't die on the job. I have to figure out a housing plan for them but paying into this home is not economical with him working less, nor is there a future in it.
Reason parents have stayed in the home and made payments is that, given the tax benefits the cost has been about par with renting at $1100/mo. Dad makes decent money and they are doing well after shedding $90k of CC and $50k second mortgage caused mostly by health problems.
Dad is working 2 weeks on and 1 week off but health makes him want to ratchet down to 1:1. Looking to get monthly housing expense down between $500-$700/mo. They have about $90k in 401k now. I could step in and buy a home if they front the down and they could live in it and pay me the mortgage as long as they could afford. I know the whole BK process has been very difficult on my Dad's pride and me stepping in would be hard on him and he would like to take me out at some point.
My questions are about the affect on their current credit of walking away from their current residence. Of course the BK did it's job on the credit, but will walking away show a fresh late pay on their mortgage, which has never been late, or did their BK discharge stop that? Will a foreclosure, assuming ~12mo from the day they stop paying, be fresh on their CR and again basically trash their score again at that time? It would be my advice for them to stop making payments, bank the cash for a down and plan to move in 6-12 months. Would they be looking at 3-4 years before being in a position to finance anything?
I can't imagine that it would be logical for the current first on there current home to foreclose and agree to sell to me upfront to get rid of 2nd and then bring down to at least current market value?
Advice?
My dad has had 2 heart attacks in past 15 years, luckily none in about 8, but I need to get him working less at the age of 68 so he doesn't die on the job. I have to figure out a housing plan for them but paying into this home is not economical with him working less, nor is there a future in it.
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