What happens if I foreclose on reaffirmed property after the bk is over?

[tlk9]

Hi ,Can anyone on this helpful forum tell me what will happen after my bk closes if a home I reaffirmed goes into foreclosure?I really made a mistake by keeping it and now work is slow in my hometown so I am unsure of how I will keep it up.Thanks for advice

[JeepMom]

My sis and her hubby are in that situation. They have already called the bank and they going to just hand the keys over. It's something called in liue of deed. Not sure of the whole process.

[keepmine]

If you have any equity, you need to sell it now.
Depending on state law, if the home is foreclosed, you may well be liable for any deficency balance.

[JeepMom]

If you have any equity, you need to sell it now.
Depending on state law, if the home is foreclosed, you may well be liable for any deficency balance.

My sister house has been onthe market for 7 months. Only 3 people have looked at it, no one comes to open houses. They fired on realtor and got another and it's still stagnet. The market is dying in a lot of areas.

[SinkingFast]

Generally, in order to get the Lender to accept an offer of DIL, you need to have been trying to market the property for a while first. Same with a Short Sale. You have to demonstrate to the Lender that you've tried, and to date, cannot sell the property.

Since you reaffirmed the debt during BK, you lost all BK protection for discharging the responsibility for the mortgage. You could be held liable for the deficit balance regardless of how you proceed. DIL, Short Sale, or Foreclosure.

Foreclosure is gonna be the most expensive option. The Lender will add all lates, penalties, fees, and interest charges to your principal balance. Then there will also be the added cost of the Foreclosure itself. Foreclosure costs are mainly legal fees as many times Lenders turn over the Foreclosure to a Law Firm to act as Trustee of the Sale. But there's also advertising fees as well. And, if you leave the property well in advance of the actual Foreclosure Sale, the Lender will repair anything necessary to bring the house to code, maintain the yard, and possibly even winterize the plumbing as the weather turns colder.

If you can hang on for a while, try marketing the house on your own, you can then try applying for a Short Sale with your Lender. If Short Sale doesn't work, then offer a DIL. Either of those alternatives is the "cheaper" way to get out of your home rather than go into Foreclosure.

Definitely, be communicating with your Lender from the Get Go on this. The more you talk with them, the better able they are to help you more quickly.