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How to leave house 2 years post Ch 7 d/c

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    How to leave house 2 years post Ch 7 d/c

    We will be 2 years post ch 7 discharge in August. We have remained in our home and paid the mortgage, service by Nationstar, but never reaffirmed. Our 2nd mortgage is owned by United Guaranty and we have taken our chances and not paid it since we filed for bk two years ago.
    At some point in the next year we will be receiving a large lump sum of money- not *exactly* sure how much, but at least enough to make a 20% down payment on another home.
    We hate our neighbors, our house needs a lot of work, is probably about 60k undewater at least, and we really do not want to stay here. Since we are discharged of our financial obligation to this house, I don't really feel like fixing it up and selling it.
    How would it work for us to walk away from this house and purchase another one if we can put a decent down payment on it? Would we have to let the first mortgage foreclose, or is there some way we can just surrender the home to them, and if so which is better for our situation?
    Is there anything else I am not considering in this situation that I need to be? (I realze the better our credit is, the better home loan we can get, etc). If we let the home foreclose, does that go on our credit report since the debt is discharged?
    Since we are nearly 2 years post bk discharge, would there be any amount of time that would need to pass beween letting this hous go and gettinga new loan?
    TIA!

    #2
    Originally posted by sealpup View Post
    We will be 2 years post ch 7 discharge in August. We have remained in our home and paid the mortgage, service by Nationstar, but never reaffirmed. Our 2nd mortgage is owned by United Guaranty and we have taken our chances and not paid it since we filed for bk two years ago.
    At some point in the next year we will be receiving a large lump sum of money- not *exactly* sure how much, but at least enough to make a 20% down payment on another home.
    We hate our neighbors, our house needs a lot of work, is probably about 60k undewater at least, and we really do not want to stay here. Since we are discharged of our financial obligation to this house, I don't really feel like fixing it up and selling it.
    How would it work for us to walk away from this house and purchase another one if we can put a decent down payment on it? Would we have to let the first mortgage foreclose, or is there some way we can just surrender the home to them, and if so which is better for our situation?
    Is there anything else I am not considering in this situation that I need to be? (I realze the better our credit is, the better home loan we can get, etc). If we let the home foreclose, does that go on our credit report since the debt is discharged?
    Since we are nearly 2 years post bk discharge, would there be any amount of time that would need to pass beween letting this hous go and gettinga new loan?
    TIA!
    If you foreclose on your current house you can't buy another one for 3 years. You pretty much have to sell or be able to afford both mortgages.

    Comment


      #3
      If they are going to foreclose anyway.....You might be better off stopping all payments and saving your money. In for a penny in for a pound ....
      or try to get that second settled. What's the balance?

      Keep On Smilin'

      Comment


        #4
        Stop paying now and save your money until they foreclose. You may have to wait awhile to get a new mortgage, but that just gives you time to accumulate a larger down payment. If you had only the first, you might have a shot at being offered a Deed in Lieu or short sale. I don't think that's likely to work when there is a second. It also may not be any better than a foreclosure other than perhaps moving things along a little more quickly.

        Or, as I think keepsmiling is thinking, you could put some of that money towards settling the second and making up any deficiency left on the first so that you can sell the house as-is. That will cost you more money. So, you need to decide whether it is worth spending the money to qualify for a new mortgage sooner. I think I'd let the bank foreclose and rent for a while while waiting for enough time to pass to qualify for a new mortgage. Definitely the better financial decision.
        LadyInTheRed is in the black!
        Filed Chap 13 April 2010. Discharged May 2015.
        $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

        Comment


          #5
          The balance on the 2nd is aprox $70k. What are banks settling for these day? Would they do like 10k?
          I would stop paying the first and flat plan on leaving, however, there are not many rentals in my area and I don't know how long it will be until we get this windfall of $ (less than a year though). We have 4 kids and 4 dogs, so preferably it would be good to have a time frame of when we would need to leave and plan for it.

          Comment


            #6
            Some have settled for 5%, quite a few reports of that.
            Def stuff to think about. Those dogs do complicate the process.
            Take a look and see how long it's taking for foreclosures in your state. NJ is still at 900 days. Could be a nice saving opp, maybe even enough to make a decent offer. Money talks, whether it's for a large pet deposit or whatever.
            Good luck, keep us posted.

            Keep On Smilin'

            Comment


              #7
              So, if you get rid of the 2nd you may have some equity. You may want to talk to a realtor about what they think you can get for the house in as is condition. If it's 60K or more underwater, the 2nd may very well settle for $10K. But, I'd start with an offer of 5% made in a letter describing the work that needs to be done on the house and expressing how much you dislike the neighborhood and that you are ready to default on the first and walk away if you can't eliminate the 2nd.

              It really is a hard decision. $10K plus the money you could save on mortgage payments could add up to an awful lot of rent! I think you need to start by finding out what your house is actually worth in its current condition.
              LadyInTheRed is in the black!
              Filed Chap 13 April 2010. Discharged May 2015.
              $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

              Comment


                #8
                Stop making payments, save every penny and buy a house for cash or land contract. Property values are starting to rise.
                8-07-09-filed Chapter 7
                11-18-09-DISCHARGED!!

                Life is not what challenges you face, but how you face those challenges.

                Comment

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