Can I still walk away from my house?

[readytofile]

We were discharged in January, we've been very good. Re-established a little bit of credit in hopes of getting my score to 700 next year when we want to relocate and rent a house until we're able to be approved for another mortgage. My husband just hurt himself at work and is out of work. Workers comp pays his salary but only 2/3 of it which makes things a bit tight. Chase offers a loan modification program. The question is, if I go for the loan modification program and get approved for it, can I still walk away from the house(did NOT re-affirm) next year when we want to move out of state?

[readytofile]

Anybody have an idea?

[goingcrzy]

Did you use a lawyer for your bk? If you did, it might be a good idea to have him read over the modification documents to make sure there is no wording that makes it a new loan.

However, for the most part you should be ok - just learn the rules for FHA. IE -two years after foreclosure (not the day you walk away but the day the bank takes the house back) to get a new loan.

[blessed]

Why not try to sell instead of walking away when you know you're moving? Put a for sale by owner sign in the yard and see if anyone calls about it.

[readytofile]

Because the house is worth 176k and we owe 215k

[blessed]

Well that makes sense!

[WC Nurse]

Our Ch. 7 was discharged in July 2009 and we just got our permanent loan mod with Chase last month, with the first permanent payment due today, 5/1/10. We did not reaffirm and could still walk away if we wanted to but are extremely happy with our mod and plan to stay in this home for a long time. The permanent loan mod docs state: "To the extent your original obligation was discharged, or is subject to an automatic stay of bankruptcy under Title 11 of the United States Code, this notice is for compliance and/or informational purposes only and does not constitute an attempt to collect a debt or to impose personal liability for such obligation".

If I were you, I'd at least try to get a modification, although you have to realize it will take a long time for it to be finalized if your approved. It took us over 6 months. Good luck!

[readytofile]

Thanks for the info! I'm not sure if we'll qualify now actually. Although my husband is out of work, according to his union contract apparently they have to pay him his regular salary so we won't be taking a pay cut afterall

[HHM]

Generally, a modification will not act to re-create the mortgage debt so that you are personally liable for the loan, only a refinance does that. However, this hasn't really been tested in courts to my knowledge, but at the same time, no bank seems to be pushing the issue; (at least their BK advisory attorneys seem to understand how this works )

When are you relocating? Is there already a known date? If yes and it is within the next 12 months or so, why waste time with the modification, just stop paying, possibly pursue a short sale.

[readytofile]

We want to move to NC next June. If we decide to definitely go through with it, I'm considering stopping mortgage payments next spring and putting that money aside for rent and relocation expenses.