Another Foreclosure Question

[demismom]

Man, this foreclosure stuff is soooooo confusing.

Okay, we're getting ready to file Chapter 7. We are in default on the loan, haven't paid in 2 months. We're surrenduring the house to the Mortgage Company. I'm assuming they will request a relief from the stay, hopefully the trustee will deem our case a No Asset case and then we'll be discharged.

My question is this: Since the foreclosure probably won't go as quickly as the bankruptcy, how on earth are we going to be able to include the balance we'll owe on the mortage in the bankruptcy? They'll NEVER get what we owe on the house when they sell it. I'm confused about that part.

[poorme]

Try to relax. This will not be the end!

Report the balance owed on your loan as of the day you file (thereabouts). Yes, the mortgage co, will file a motion for Relief of Stay, but you will have some extra time between filing, the court's notification to them, and their motion.

In the relief motion and subsequent information, the mortgage company will outline to the court the actual amount of the loan, plus any fees, etc. for a total amount they value the transaction at. Don't worry about their loss - they expect to lose money on the deal after it goes this far. It may take months before the house is sold, fixed up, and remarketed. If yours is a no asset case, then you can forget about the mortgage and any value shortage - they can't get you for the difference.

[demismom]

That's what I was wondering about - your last sentence. I wasn't sure whether because we filed before they actually get a chance to sell the house if the shortage is able to be included in the bankruptcy or not. THANX!