Chapter 7 and a negative equity mortgage that I will keep

[mj2010]

I will have my mortgage modified at a 2% rate but will be upside down roughly $150K. My new payment allows me to stay in the home in a negative position at less than I can rent for so I have decided to stay.

My question is this. I will file a Chp 7 in NC and keep the mortgage with a $150K negative position. If anything happens to me down the line where I can not make the payments and get foreclosed on Atorney has stated that the Chp 7 Bankruptcy has taken care of all the personal recourse on the property and all the damage has been done to me. He said I will have to notify an UW that I was foreclosed on in the future but I can not be affected by it again personally.

I just want to clarify this. If I file Chp 7 and keep the property and then 3 years later get foreclosed on can Lender come back after me for the defeciences or have any recourse against me? I want to put all this behind me and get on with my life. If what the Attorney is telling me is true I really have nothing to lose by trying to stay in a negative equity position in the home since the Chp 7 has stripped the promissory note responsibility part away and I am just being held to the terms of the Deed.

I apologize if this has been mentioned before but I did not see it anywhere.

Please advise if anyone has any insight into it.

Thanks

[yomann]

Your attorney is a 100% correct !

[tcreegan]

lender contact limited

Hello mj2010,

Do NOT sign any reaffirmation papers and stay current on your payments. Then they cannot come after you for the deficiency after the BK.

Another thing to remember is that once you file, the lender has restrictions on contacting you. Usually they pull online access and stop sending statements, this is normal. You don't have restrictions on contacting them, so it is up to you to communicate with them during the BK

Good luck with everything,

Tom in Colo

[Pandora]

Hello mj2010,

Do NOT sign any reaffirmation papers and stay current on your payments. Then they cannot come after you for the deficiency after the BK.

Another thing to remember is that once you file, the lender has restrictions on contacting you. Usually they pull online access and stop sending statements, this is normal. You don't have restrictions on contacting them, so it is up to you to communicate with them during the BK

Good luck with everything,

Tom in Colo

If its a modification - you must sign papers to modify.

Mj2010 - make sure you weigh out all of your options with your house before you sign. In your payment now vs. renting - did you include what you pay in for insurance, property taxes, any PMI or HOA's? is it still cheaper in the long run? Also remember your rate will adjust (dont know your terms, but if 2% - then its probably for 5 years, then it goes up from there, correct?) - so make sure you can walk if you sign your modification papers. There should be a clause in there stating you can walk away if you get a discharge through BK.

[tcreegan]

Hi all,

Hi Pandora, I was under the impression that mj2010 had already inked/would have inked a mod b4 the BK. If not, this could be a real problem....lots of lenders take a loooong time to do a modification and lots of lenders are stingy on the terms. I can't imagine a BK improving the process.

Tom in Colo

[Pandora]

Hi all,

Hi Pandora, I was under the impression that mj2010 had already inked/would have inked a mod b4 the BK. If not, this could be a real problem....lots of lenders take a loooong time to do a modification and lots of lenders are stingy on the terms. I can't imagine a BK improving the process.

Tom in Colo

Hi Tom - Morning

Funny how things are interpreted huh I read it as the OP will soon be modified due to the first sentence stating "I will have my mortgage modified..." not "I had my mortgage modified..." ?? Guess the OP will have to chime in and tell us if it has been done or is to be done soon. I dont think they've filed Ch. 7 yet either - hence that "I will file Ch. 7 in NC.."

You're right - it does take a very long time for the mod process and banks tend to hold out the longest when they find out there is a BK in the future.

To the OP: If you havent been modified yet and are basing the 2% off of what a CSR tells you - be careful - dont believe anything until you have the paperwork in front of you ready for your signature and notary.