Bidding on Our Own Home?

[busted]

My dh will be filing 7 within the next few days. I will not be filing. Our home is due for sale at the courthouse on the 13th. The mortgage co. worked out a payment plan but the down payment and the monthly payment is way too much. We can't afford it.
Can I go buy my house. How does a forclosure auction work? Do you have to have cash? Pre approval from a bank? We are in VA. Any info will help.

[poorme]

You're local courthouse can answer your questions. Yes, you can bid, and usually must show up at the sale in time to register as a bidder, showing you have a bank letter of guarantee or cash sufficient to guarantee funding. Usually, the bank buys the house ('their' house) for exactly what is owed on the note. Question: if you can't afford the down pmt and the monthly, how are you going to buy the house for cash?

[busted]

I guess that was our question. It has to be bought for CASH?

[SinkingFast]

Foreclosure Rules vary by State.

Some States require 10%-25% down, in Certified funds, the day of the Sale. Remainder due within 10-30 days. Some States require payment in full, in Certified funds, on the day of the Sale.

Some States have a Redemption Period. A time where the owner of record, you, can buy back the home. Redemption Periods can range from 10-20 days, to months, to a year or so. Other States don't have a Redemption Period. Some States, the owner's rights are completely terminated the day of the Foreclosure Sale.

The winning Bidder at a Foreclosure Sale is generally responsible to bring current all back due taxes, HOA Dues/Fees, make any needed repairs, and such.

Generally speaking, there are too many hoops to jump thru for a regular person to purchase a home at a Foreclosure Sale. Most times, the Bank/Lender buys back the property. Rarely, an Investor or an Individual will buy a Foreclosure home at Sale.

What State is the property located in??

[busted]

Thanks SF. It is in VA and we are still living in the home. I am also confused about how to try to negotiate a deal with the mortgage co. They said that if we can come up with 4,900.00$ the sale will be cancelled and we will start a new payment plan owing 3,200 a month for the next 11 months.
My question on this is...If dh files this week after a deal is made by the mort. co., will they get angry that he filed and pull back fr the deal and want to sell anyway.
I know that filing will give us a bit more time but what happens in that time, is the mortgage co going to be mad that dh filed bk?
This part is very confusing and not sure if I'm making sense. Should we make a deal and try to borrow money from a relative (which my attorney said would be okay) or should we just file and then try to work with the mort. co.

[busted]

We are in VA. I guess I am very confused about what to do with the mort. co.
Should we accept the deal they are giving us of a $4,500 dwn payment and then start our monthly payments in Aug of $3,200 or should dh file this week and then work with the mort. co. Or do the mort. co get angry after one files? If we do accept their deal and borrow the money to pay it, can they pull out of the deal when they find out that dh has filed bk? Our attorney said we can borrow money from family to pay the mort. co.

[JRScott]

I know this might sound hard, but it appears the home is not such that you could afford it even if you had all other debt removed, at least that's the impression I get reading the above.

It might be best to look for another more affordable place to live.

I mean even after the chapter 7 could you afford the payments of 3200 a month? Would you still be able to afford transportation, food, clothing and other necessary expenses? If the answer is no then it is unlikely that the trustee or your lawyer would sign off on a reaffirmation for the debt which would be required if you went into BK.

[tofargone]

It looks like the only option you may have is a Chapter 13 if your home is important to you. It would allow you to repay your arrears and start on regular payments. The down side is you will have to roll all other debt into the plan and pay on that also with any disposable income that you have. I think this is when you need to do a little soul searching for you priorities. I am in a 13 and it's not all roses, but we wanted to keep our house and can afford the payments. If you look at this as an option I would talk to a couple attorneys to get a better idea of where you would be.


Good luck

[busted]

A 13 is not an option at all. Any suggestions on how to work with the mort. co? in a 7?

[HHM]

A 13 is not an option at all. Any suggestions on how to work with the mort. co? in a 7?

You don't necessarily have a choice in that matter (except to decide not to file). If your DH files BK, and he is over the Median or the schedules I and J don't match up, the court will push him into a chapter 13.

As for making a deal with the Mortgage Co. and then filing BK...probably not a good idea. First, the bank can withdraw the deal and reinstate the prior terms...Second, when that happens, you are in default and there is no mechanism that can force the creditor to accept a workout. If your DH decides to file, you could try to Negotiate for an "Adequate Protection Order" on the house. Essentially, an APO is like the deal you mentioned...you work out a plan to repary the arrears, the bank "may" modify the terms of the original loan (or may not), you reaffirm the loan, and the bank can jump to foreclosure if you fail to abide by any of the terms for the APO.

[tofargone]

Unfortunatly the only power play you have with mortgage arrears is a 13. A 7 will not protect your house. A few questions.

Can you afford your normal mortgage payments?

Is your mortgage an ARM and thats why its so high? Has it just adjusted up?

[busted]

You don't necessarily have a choice in that matter (except to decide not to file). If your DH files BK, and he is over the Median or the schedules I and J don't match up, the court will push him into a chapter 13.

All debt is business related debt guarenteed by dh so he won't have to take the means test. Is that what you are talking about when you mention Median and schedules?

Our attorney is out of town till next week so the paralegal is trying to get answers for us from an attorney.

As for affording the payments, we will be able to cover those with everything else wiped out. DH is the only one filing, I am not.

It is very high because of the arrears that it was in last yr. We were on a plan at the end of the yr and broke it in March, plus attorneys fees, taxes, insurance is why they said it will be high for the next yr.

[tofargone]

I guess than I am at a loss. If the debt can be wiped clean thats great, the house on the other hand will be the sticking point. I am sure your attorney will have better information, but it seems like a rock and a hard place.

Good luck

[SinkingFast]

In order to file Ch 7,.............

You have to bring the house current. All arrears to the Mortgage Company, the taxes, the legal fees, everything is gonna have to be current. If the house is not current when you file BK, the Lender can move for a Motion to Lift Stay and proceed with Foreclosure.

Then there's an issue of equity. How much do you owe versus the Fair Market Value less reasonable costs to sell?

If you are both listed on the Deed/Title as Joint Tenants, then equity won't be an issue. Property held as tenancy by the entirety may be exempt against debts owed by only one spouse.

If DH is on the Deed/Title alone, then he can exempt $5000 plus $500 per dependent. And he must file a Homestead Exemption prior to filing BK.

http://www.bankruptcyinformation.com/VA_exemp.htm

You really need to step back and take a look at your entire financial situation. What's the driving force behind your debt? Can you bring the house current prior to filing BK? Can you honestly swing that huge mortgage payment after filing BK? Will you be able to live comfortably with the mortgage payment? Can you buy clothes, eat, pay doctor's bills, and such with that mortgage payment?

You've got to step out and not look at the house as "Home". You've got to look at it as a financial issue to be dealt with.

[freshstart06]

It is going to be hard to get a mortgage in your name because the banks are going to ask for your husbands payment history on the house and since yoiu guys live together the assume you are responsible for some of those payments. I am a mortgage broker