Need Help about House Sale in 13

[cso5@]

Ok, so here is the deal:
I have been in my Chapter 13 for 45 months this month -- 13 to go (it is a 58 month plan).

I want to sell my house. It is not worth what the 2 mortgages against it total. If I get the asking price (it is on the market -- I put it on the market before I knew the payoff amounts and there is a huge "fees" category in the first mortgage payoff letter that skewed how much I thought I owed).

I understand I need trustee approval and all that -- and my lawyer said you can sell you house while in a 13. So I went ahead and contacted a realtor.

I contacted her again today to tell her of the weird fees amount in the payoff letter. She said there will have to be a short sale. Anyone done this?

I have lost my job and am now working for the same company but for a lesser amount of money. Payments to the trustee are current because it is done by payroll deduction. But I am behind on my first (and second, but less so). I am "catching up" this month and next.

I asked my lawyer about -- since I no longer want to keep the house and there's no equity anyway -- just not making mortgage payments but she said to go ahead and catch up like I had planned. But I am wondering about that -- like, what is the point in sending in mortgage payments?

I searched the threads but there doesn't seem to be much information about what to do while in a 13...Help!

Cat

[lrprn]

I want to sell my house. It is not worth what the 2 mortgages against it total.

Is your home currently worth less than your first mortgage? If yes, then since you are in a 13, you can strip the second mortgage if your lawyer amends your plan. Is this a possibility?

[justbroke]

You are going to have two issues. First, if the value is less than both mortgages, then you have an equity problem. Second, if you haven't already stripped the second mortgage, you could be in a bind!

Now, of course, you need permission from the Court to sell the property. Even worse, you'll need to get permission to sell it "fee and clear of liens"... in particular, the second lien. Otherwise, you'd need the second lienholder to basically allow you to short sell.

This is an almost impossible situation to be in. As lrprn eludes to, stripping the second this late may be possible, but not guaranteed. In any event, you'll need to modify your confirmed plan.

If you don't want the home, then you are better off getting the plan amended to surrender the home, rather than deal with a short sale. I don't know if it's possible, but that's for you and your attorney. If I didn't plan to keep the home, I'd be getting it out of my plan pronto, so that any deficiency.... is discharged when you complete your Chapter 13!!!