Left Home, now in preforeclosure/Rented new Home/Now mort. co. wants to work a deal..

[csrhjr31]

My husband and I filed BK in May and were discharged and closed in August! After filing, we decided we would not reaffirm our mortgage due to having two mortgages and not being able to afford the costs.

We moved out and are currently doing a lease to buy. But our mortgage company wants to work something out. We are considering it, but not sure if that is the best choice.

We would need to give them a down payment and sign papers saying we want to stop the foreclosure process(the sheriff sale is set for March). Then for a minimum of 3 months and no longer than a year, we would be paying them what we can afford. After 3 months, we would rework the loan... not sure of terms until we rework it.

Our biggest concern is the 2nd mortgage. We were told that the 2nd mortgage can't come after us due to the BK, and since it isn't the primary loan, they can't go after the house. The only thing they can do is keep a lien on the house. We were told that in a year, after they have realized they won't be liquidating the loan due to no foreclosure, they will eventually write it off. Then we would be able to pay them a small sum to remove the lien... is this possible?

Has anyone done a rework on their foreclosed home? I have such mixed feelings, not sure what to do...

[HHM]

There is a fair amount of risk in what is being proposed.

1. You don't even really know how the loan will be worked out. You are simply betting that "something" can be worked out.

2. The 2nd mortgage. You have been slightly misinformed. They do have a foreclosure right, however, as a practical matter they probably won't foreclose because they won't get anything out of it. As for paying a "small" sum to remove the lien, why would they do that. The lien can sit there for a hundred years if necessary.

Since the work-out does not include anything with the second mortgage, I say don't do it. You are creating too much risk in your financial and practical lives. Let the home go.

[csrhjr31]

Is it common to do rework of your mortgage after a bk?

Has anyone ever had a lien removed?

My biggest concern, is we are renting for two years, but the way the market is, we probably won't be able to get a mortgage. If the mortgage company will rework our loan, wouldn't that be a better option?

This is all very overwhelming... has anyone had a bad experience with a rework... can the mortgage company intentionally "screw" us over with the rework? Is it common to wait 3-12 months to do the rework?

[TEW]

did you file chapter 13?

[JRScott]

I'm with HHM, this sounds to risky and details to vague. Without including the second mortgage as well in the process its not going to be successful, stay with what you are doing.

[keepmine]

There isn't a thing in the world wrong with renting .
Part of a bk is a fresh start and the opportunity to make good financial decions. Why would you stick your head back in the noose with these same lenders? You have absolutely no deal on the table with which to fashion any sort of realistic budget.
Stay where you are and start saving money.

[estreeter34]

I also agree with HHM and keepmine.
THe second mortgagee has no obligation to "write it off in a year". You simply don't have anything in writing and it sounds to me like thay want to suck as much money out of you as possible.
We are walking away from 2 houses. Both had second mortgages. We are looking forward to renting for a couple of years. There will be opportunities to buy houses in the future. It might be through other means than a traditional mortgage in the near future...Land contracts are going to start looking better to people again!
Good Luck

[StartingOver08]

Do not sign papers with the bank. The bank is not offering this to help you. You already have the mortgages discharged in your BK. The reason the bank suddenly wants to work with you is to have you obligate yourself again - and at the end of the year they will not honor anything they have said to you. This is a ploy by the lender to get your name on the loan again knowing you can not BK again for 8 yrs, IMO.

Move on with your life. Continue to rent for the next couple of years and get yourself in good financial shape; then choose if you want to buy a new home or not!

[floridian]

i have moved out and am renting a nice house... now my former mortgage holder says they will give me a 4 1/2% loan if i dont forclose.. it was tempting, but this bk process is already rolling and its too late to turn back....
i just wish they hadnt mentioned it.. now i will always wonder if i should have gone for it...