Dear Sweetpea3829,
First let me say that I wish you the best. And our latter days will be better
than our former days!!!!
You gave a lot of information and I'm not sure I have it right but here is
my understanding:
1. You filed bankruptcy in 2007 because of debt related to an investment
property and you thought that you were discharged of only the
investment property and that you reaffirmed your primary residence.
But the bankruptcy discharged your of your primary and investment properties.
2. So you continued to make payments on your primary residence for
almost 3 more years and tried to do a Loan Modification to keep
the primary but it was denied the Loan Modification
3. You want to relieve legal responsibility of your primary residence
in a manner that doesn't jeopardize your possibility of getting
another primary residence as soon as possible
And here is some feedback/questions
1. Is there no path to get a lawyer and fight your mortgage company
that you wouldn't have
paid mortgage for almost 3 years on a home that you knew was discharged?
Can you talk to your 2007 bankruptcy law firm?
2. This may or may not be related to why they declined your loan if they did
not even run you through their waterfall analysis but if they did run you through their
waterfall analysis then; Loan Modification is driven by a NPV analysis agreed upon by congress
and the mortgage companies. They do an analysis that lets them decide the
net present value of you staying vs letting it go into foreclosure.
Essentially for you they concluded that they would make more money if your
primary when into foreclosure than to let you keep it and "make it more affordable".
And every mortgage company has their own ever changing
formula and scales of the npv difference of which to make their decision.
I know something about this because I worked in the Loan Modification
related business.
You should be able google more about this.
3. As from my experience with my old home deed in lieu is a choice after the
foreclosure process starts? I know it as a "deed in lieu of foreclosure".
It's where you give them the deed quicker but from a credit perspective it does
very similar affect to your home as a foreclosure. Banks do do it to get your deed quicker so they
won't have to spend money to break your
mortgage contract in court to get it aka foreclosure. Can you talk to your
2007 Bankruptcy law firm about this?
4. You can go ahead and start working on a short sale. Get a realtor,
and set close to that 150K neighbor's price and see if you get a buyer.
It's after you get an offer that you go to your bank with a good
short sale real estate lawyer and begin the short sale process.
The quicker you get a buyer the better and then it depends
on how fast your mortgage company will accept or reject the short sale.
I'm not sure how fast they will move to accept or reject because you are
discharged of the debt but they do want the deed so they can sell it if you
can't sell it someone else.
So their interest is getting the deed off their hands and that's also your
interest. A lawyer can answer this that has dealt with short sales where only
the legal aspect of the mortgage is a factor and not the note aspect.
5. If you do do a short sale then there shouldn't be a
deficiency judgement since the notes tied to both properties were
discharged of any responsibility of yours. I discharged of bankruptcy first
and then two weeks later closed on a short sale. I did it in that order
because bankruptcy relieved me of the note aspect of the mortgage and then
the short sale had been in the works and would relieve me of the
legal aspect of the mortgage. Until the the deed was moved over via sale,
deed in lieu or foreclosure then if something happened to my house legally I
would've been responsible for it.
Best to you and your family
First let me say that I wish you the best. And our latter days will be better
than our former days!!!!
You gave a lot of information and I'm not sure I have it right but here is
my understanding:
1. You filed bankruptcy in 2007 because of debt related to an investment
property and you thought that you were discharged of only the
investment property and that you reaffirmed your primary residence.
But the bankruptcy discharged your of your primary and investment properties.
2. So you continued to make payments on your primary residence for
almost 3 more years and tried to do a Loan Modification to keep
the primary but it was denied the Loan Modification
3. You want to relieve legal responsibility of your primary residence
in a manner that doesn't jeopardize your possibility of getting
another primary residence as soon as possible
And here is some feedback/questions
1. Is there no path to get a lawyer and fight your mortgage company
that you wouldn't have
paid mortgage for almost 3 years on a home that you knew was discharged?
Can you talk to your 2007 bankruptcy law firm?
2. This may or may not be related to why they declined your loan if they did
not even run you through their waterfall analysis but if they did run you through their
waterfall analysis then; Loan Modification is driven by a NPV analysis agreed upon by congress
and the mortgage companies. They do an analysis that lets them decide the
net present value of you staying vs letting it go into foreclosure.
Essentially for you they concluded that they would make more money if your
primary when into foreclosure than to let you keep it and "make it more affordable".
And every mortgage company has their own ever changing
formula and scales of the npv difference of which to make their decision.
I know something about this because I worked in the Loan Modification
related business.
You should be able google more about this.
3. As from my experience with my old home deed in lieu is a choice after the
foreclosure process starts? I know it as a "deed in lieu of foreclosure".
It's where you give them the deed quicker but from a credit perspective it does
very similar affect to your home as a foreclosure. Banks do do it to get your deed quicker so they
won't have to spend money to break your
mortgage contract in court to get it aka foreclosure. Can you talk to your
2007 Bankruptcy law firm about this?
4. You can go ahead and start working on a short sale. Get a realtor,
and set close to that 150K neighbor's price and see if you get a buyer.
It's after you get an offer that you go to your bank with a good
short sale real estate lawyer and begin the short sale process.
The quicker you get a buyer the better and then it depends
on how fast your mortgage company will accept or reject the short sale.
I'm not sure how fast they will move to accept or reject because you are
discharged of the debt but they do want the deed so they can sell it if you
can't sell it someone else.
So their interest is getting the deed off their hands and that's also your
interest. A lawyer can answer this that has dealt with short sales where only
the legal aspect of the mortgage is a factor and not the note aspect.
5. If you do do a short sale then there shouldn't be a
deficiency judgement since the notes tied to both properties were
discharged of any responsibility of yours. I discharged of bankruptcy first
and then two weeks later closed on a short sale. I did it in that order
because bankruptcy relieved me of the note aspect of the mortgage and then
the short sale had been in the works and would relieve me of the
legal aspect of the mortgage. Until the the deed was moved over via sale,
deed in lieu or foreclosure then if something happened to my house legally I
would've been responsible for it.
Best to you and your family
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