Here's a thought... Trade home with lender.

[lolie]

This was just a thought and worth a shot to ask my attorney.

We plan on surrendering our underwater home to the lender in our Ch.7, however what if... and this is a big WHAT IF...

What if we offer a trade to the lender? They have to accept our home as a surrender and then they would have to issue a new mortgage for the first amount in order for us to purchase one of their bank-owned properties or short sale properties.

We are able to make the payment on our first loan. It's comparable to what we would be paying for rent. So if the lender strips the second, Why not just stay in our home? It is underwater by almost 200K on the first. We were planning on selling and moving to new neighborhood this year.

This way, the bank still only has one property to deal with. We pick up with the same amount on our first, but at fair market value in a house and neighborhood we wanted. We have never been late on payments with our mortgage either, so at least we would have some leverage there.

Makes me laugh just thinking about it. Totally far fetched? Or worth a shot?? What do you think? I'm sure my attorney will laugh in my face, but why not?

[justbroke]

They couldn't care any less about this. They will tell you to go qualify somewhere and then purchase one of their REO homes. It's not so much that it makes perfect sense to do this, the banks just aren't structured the right way in order to offer such a program. It's a good idea, but I don't know how a bank would implement it.

If the bank is Bank of America, you might be able to do something with their principal reduction program that they are now offering.

[lolie]

Good idea... I know, right?

I have Chase, the worst of them all. I'm sure 'No Deal' there. They are just going to end up with another house to sell and so be it. Sad though isn't it?

Our attorney asked if we would be willing to stay if they did a principal reduction, as well as a lien strip. 'No Deal' on my end. It's not the neighborhood we wanted to be in with our two kids going to school. That's why my "What If" question. If they are so willing to do that, reduce the principal and strip the second, Why not trade?

I saw an article on eHow.com that states that a lender may be willing to trade a home for a lesser value home, but not necessarily for a home of greater value. Interesting.

We will just end up renting in the neighborhood we want to be in and buy when the market starts to rebound through an FHA.

It is what it is.