Someplace to live

[Lesa13]

After a lot of soul searching, I have decided I am going to have to move out of my house. I am not in foreclosure now, but with my "new" payment plus the payment I need to make under the stipulation my lawyer signed with the mortgage company, I will be paying over 98% of my take home pay to the mortgage company every month - not a good deal

I have been unable to get any input or advice from either my own attorney or any of the 3 other attorneys I consulted about possibly firing my current attorney and retaining a new one. No one would talk to me until I actually fired my current attorney and got his file and he had filed an official withdrawal with court. So much for a legal consultation.

So my question is - what are my options here? I am currently "up to date" - as it were - on my mortgage. I have now learned (the hard way) that it will take 3 missed payments before the mortgage company forecloses. So I have at least another 3 months before I am out on the street.

I need a house - whether rent or own - not an apt, condo or townhouse. I have looked at "owner financing" on homes (or a mobile home), as well as renting. Anything else I am missing or haven't thought of? If I could find an owner financed home, can I do that (of course with court permission on all of this -not running wild JUST yet :>)

Should I do a deed in lieu or let it go for 3 months (or as long as it is after I miss a payment - I can probably do this high payment thing for a month or two) and let the mortgage co foreclose?

I have no equity in the house (besides sweat equity and emotional attachment), so it is more of an issue of just letting the house go back and coming out owing as little as possible and getting on with my life.

Thanks for any input!!

[Minnymouth]

OK,
You did not say whether you filed under the old laws or new laws.....? Did you are file Chapter 7 or 13?
What kind of papers did your attorney SIGN that you DIDN'T??
Have you had your 341 meeting?
Have you paid your attorney in full?

If you have no equity in the home, don't want to keep it, and/or cannot afford the payments its best to surrender it in the BK.....

We need some more info to help!

[poorme]

I'm not sure what agreement your lawyer worked out with the mortgage company, but is sounds a bit like a Forbearance Agreement. Under this, you temporarily increase you payment to include any arrearage (usually spread over 4-7 months) plus your current amount. They do this when they think you have excess income and their fingers get itchy for it.

Truth is, a forbearance CAN actually be spread over many months, but the banks don't like to go out too far. Another option is asking for them to consider a Loan Modification. Under a loan mod the lender can simply agree to tack the arrearage to the end of the loan. You just continue making your normal, regular payment and deal with the arrearage at the end of the deal. It's probably the best option (and least known) - but you have to ask your lender for it...they won't just offer it. If you can get this under control and take care of the rest in your bk...then you could keep your home at a reasonable payment.

[Minnymouth]

poorme is probably correct on this, but your attorney would have had to have you sign also...........

I agree with checking into the Loan Modification and attaching any arrears to the end of the loan.....

Keep us posted.

[Lesa13]

I am in Chapter 13, under old laws. I filed primarily to keep my house out of foreclosure.

Since then, monthly payment has increased due to interest. In addition, mortgage co. screwed up and filed a motion for relief in March saying I was 3 payments past due. I was not past due at all. However, I had not been paying the monthly amount they were expecting (before the interest rate went up) because I did not know about it and mortatge co. had never told me "you need to pay "x" amount." I paid the same amount I was told by mortgage company's bankruptcy department when I initially filed.

All of this was worked out to a stipulation being signed by my atty and mortgage company's attorney, signed without my knowledge or permission - I was sent a signed copy saying "start making payments" starting 4/15 and paying back over 6 months. Stip covers 2 mortgage payments (March/April - not paid per my atty since motion had been filed), all past due amounts (escrow & interest) not paid each month since bankruptcy (amount I was not told until now), 1 mortgage payment for February (I made Feb 1 but they refuse to believe my bank's documentation showing they cashed check) and mortgage company's filing fee and attorney's fee for their motion for relief. Monthly total of about $525 due on the 15th of every month for 6 months. Plus the new increased mortgage payment ($200 over what I have been paying) due 1st of every month. I can't afford it.

Basically, I paid $775 November through Feb based on what the BK dept at my mortgage company told me. Never heard differently. Accordcing to the motion for relief, I was supposed $840 November and December and then $925 starting January. Again, I was never told this by anyone.

My atty's answers to my questions regarding the above were "you didn't follow your contract with mortgage company to the letter" (ie, didn't pay the amount they wanted every month since I had never been told) and so you are responsible for all of this and if you don't like it, tough luck. He also refuses to believe my Feb payment was cashed.

I am wanting to fire him, but have been unable to even speak with another attorney regarding this (tried 3 different attorneys and all refused to speak to me). That's another story.

My questions are, how can I find another place to live before I start falling behind on these payments? I have seen 2 houses that are "owner financing" with reasonable monthly payments but don't know if this will be an option I can take.

Regarding forbearance - my mortgage company will not consider anything over 6 months to pay anything past due back, nor will they do ANY amendments to the original loan, such as restructuring. Believe me, I have been trying that for over a year and actually ended up paying what I thought was a not-for-profit something in the area of $2,000 to get a forbearance agreement worked out. That was not successful and what eventually forced me into BK.

[Minnymouth]

Under Chapter 13, you really are in no position on buy a home right now...... even owner financed, unless they let you rent to own till your out of Chapter 13.

Is your present mortgage payment in your Chapter 13 plan.....??? If so, it should be a flat payment that you and your attorney both knew about..... and the trustee accepted. Now if this mortgage company is raising cain because you aren't paying more, then they need to talk to the Trustee - not you, nor your attorney. If there was a change in your payment plan, your attorney should have notified you by MAIL...... NOT VERBAL....

As far as the payment (Feb.) where they don't accept the statement from the bank, notify the Trustee of the occurance and send him a copy of the cancelled check from the bank.... and a copy of your statement showing it withdrawn..... these documents are legal and binding.

Sounds like you need to get rid of your attorney..... he's getting paid for doing nothing...........

If you fire him, file a grievance with the state board stating the circumstances. Hire you another attorney or go to legal aid for help......

The Trustee is the one that see's that the creditors get paid.......... he's the one your money is sent too.... so he should know about any changes in your payment plan.....
You might want to discuss this with him...... and see what he says....

Keep us posted,

[Lesa13]

Minnie, I am not sure I understand why this would not be acceptable - help me!

Let's say I live in a $200,000 house now with a mortgage payment of $1,100 that I no longer can afford, being in BK.

I instead want to somehow get rid of the house (whether it is deed in lieu, foreclosure, sold, etc.) and downsize into a $50,000 house with a mortgage payment of $400 a month.

Why would the trustee/court have an issue with that? If I could find someone to finance me? If the payment was a mortgage payment or rent payment, wouldn't it just matter what the amount was and that it was not more than your current payment?

[Minnymouth]

You could do this with the Trustee's approval, BUT REMEMBER the difference of what your paying now in mortgage $1100.00 and what you want to pay $400.00 will automatically go to the Trustee in Chapter 13 payments. It becomes available cash for him......
So you may be defeating your own purpose.....
You can run this by your attorney and see what he says or you can give the Trustee a courtsey call and run it by him and ask him what your options are.....
Did you have equity in the house???
Also another thing, is your not supposed to create any NEW DEBT while in bankruptcy...... that's the main reason you may not be able to do this....
I know you can buy a car in Chapter 13..... so I don't know why you couldn't downsize on a house in Chapter 13....

Good question, let me do some research......

Minny

[SinkingFast]

Probably the best thing you could do at this point is convert your Ch 13 to a Ch 7.

If you filed 13 to save a house you can no longer afford, a Ch 7 will take care of any deficit balance you may have if you do a DIL or wind up in Foreclosure. Plus you won't run into having the extra $/month available going straight to the Trustee in plan payments, like Minny said.

[Lesa13]

Probably the best thing you could do at this point is convert your Ch 13 to a Ch 7.

If you filed 13 to save a house you can no longer afford, a Ch 7 will take care of any deficit balance you may have if you do a DIL or wind up in Foreclosure. Plus you won't run into having the extra $/month available going straight to the Trustee in plan payments, like Minny said.

Wow, this is totally blowing my mind. So if I would somehow (and I don't know yet *how*) let the house go and rented another house, I could then convert to a 7 and everything would get wiped out and (GASP) I could actually be earning a living and have enough to support myself?

Aside from the moral issues I have with regard to paying back what I owe, this sounds almost too good to be true, so I know I must be missing something.

[Minnymouth]

Do a Chapter 7 if you are not going to keep the home..... best option. Hope you do not have a lot of equity in the home.....
If the house is the only asset you have, then get the home and everything else wiped out in bankruptcy and get a clean slate. Now if you have student loans, they are not discharged in bankruptcy.

If you have no equity in the home or little equity, file Chapter 7, rent for a little while and then buy another home shortly thereafter that is more reasonable that you can afford.

Do not let it go to foreclosure or DIL..... you don't want to get caught owing a balance on it after its sold.... If your going to let it go do it thru a Chapter 7.

Discuss this with your attorney and let us know what he says.......

Keep us posted,

Minny

[Lesa13]

Update to "where will I live"

I have finally decided that I am going to let my house go back to my evil mortgage company and rent a place to live. Once I do that, I will convert from my 13 to a 7.

After speaking to an attorney who was a little more open minded than the current dunce I have on board, she told me there was no way, in her opinion, that I would make it through the 13 and told me that in her mind, 13's are "designed to fail" for pretty much everyone. She feels that 13 should be the choice for very few people, esp under the new law (I am old law). She felt that my continuing to pay something like 88% of my current take home income in order to keep this house is ridiculous. She comfortingly told me I had quite a bit of bad luck and I should really just try for a "clean slate."

I have little to no equity in my house and so have been looking at rentals. Once I get a rental, I move, leaving the house for the mortgage company to deal with. (I can't do a DIL thanks to the mortgage company's past screw ups which means I have a "forbearance" payment in effect plus a regular payment, and they won't do a DIL with anything in "forbearance").

I am nervous about a seeing a great place this Friday - small realty company manages it in a small town that I actually have some community ties with. I hope to impress them with my resume (I look good on paper, anyway ), my volunteer activities and the fact I "interview" well and will be up front about my financial situation as appropriate. Really hoping it goes through.

I have been having a terrible time the past few months, all due to the mortgage company and my p*ss poor lawyer and his (NOT) help. Hope to get things turned around, so everyone keep their fingers crossed for me!

[13inOR]

Lesa, I hope you get the house and enjoy living there as well. I think you are going to be much less stressed once you get out from under the chapter 13 too.

[debtisbad]

Lesa,

Life will get better. A house is not worth that much stress!

[SinkingFast]

Lesa!!

I'm so glad you posted the update!!

I've learned info that might help you out!!

Contact your Lender and ask for the Work Out Dept. Tell them this Ch 13 stuff ain't working for you and you want to discuss doing a Short Sale with your Lender's Work Out Dept.

Basically, you write a SOB story letter about what happened with the payments before. How you were dealing with the BK Dept who did not inform you of the change in your payments. That having to pay the arrears in addition to your current payments is too much.

The Work Out Dept will probably also ask for other docs. Last year's taxes, current pay stubs, your other monthly expenses, etc. It's kinda like applying for the Mortgage in reverse. But the Lender will tell you what the Investor will accept as an offer, bottom dollar. Then you can find an investor who will pay rock bottom that the investor will accept, plus any costs to make the deal happen. Doc fees, Real Estate fees if there are any, any closing costs.

With Short Sale, you cannot make a penny. But you're able to unload the house and dodge Foreclosure being on your Credit Report. Your Credit Report will show "Sold" with a deficit notation. But it beats the heck outa Foreclosure.

Hopefully that's a suggestion that might work for you. I know you're pretty beat up at this point. And taking a Foreclosure is the easy thing to do. So if you wanna let it go at that, I'd certainly understand. Just trying to help you salvage something of your Credit.

You're right to find another place to live before you file a Ch 7. No Landlord will touch you if your looking to rent while in an active and open Ch 7. They know you can discharge any Creditor in that 90-120 day period after you file.

Good Luck!! Keep your chin up!! and Keep us informed of how you're doing and what's happening with you!!