Question about house AFTER bankruptcy....

[Stilltheone]

Hi all~

Here's my question for you....

We should be discharged here in about a week. We never signed reaffirmation papers on our house and currently have 2 loans...Our first is with Aurora Home Loans and our second, HELOC, is with Countrywide.

Both lenders let us do a ride through, so we have been making our payments on it.

In about 2 years, we want to build a house. If we can't sell our house, are we able to give it back to the bank? What would be the reprocussions?

Right now, we owe $260K and *think* it's worth $245K...although a house just down the block sold for $210K.

I'm worried in 2 years, we're going to start building and by the time our new house is done, our old one won't sell or won't sell for enough.

Any ideas/thoughts would be appreciated!

[Flamingo]

I don't get something here...you are going through a BK now and thinking about letting a house that you are keeping now and dump it later to build a new house? Maybe I am missing something here as to your plans but do you really think you will be able to build a house so soon after filing BK and letting your present house go just prior to that time if you cannot sell it aand be able to obtain mortgage financing with a BK and the foreclosure on your records in less than a two year time span? No one can advise you what will occur between now and two years down the road as to the value of your present house. The mortgage market is not expected to do anything as to an upward trend until at least 2010 and is going to get worse over the coming year or so.

Right now I would worry about getting your life back into order after filing and not so much on building a new home in two years cause you just may not be able to do so.

Best of luck to you with your endeavors!

[Stilltheone]

I don't get something here...you are going through a BK now and thinking about letting a house that you are keeping now and dump it later to build a new house? Maybe I am missing something here as to your plans but do you really think you will be able to build a house so soon after filing BK and letting your present house go just prior to that time if you cannot sell it aand be able to obtain mortgage financing with a BK and the foreclosure on your records in less than a two year time span? No one can advise you what will occur between now and two years down the road as to the value of your present house. The mortgage market is not expected to do anything as to an upward trend until at least 2010 and is going to get worse over the coming year or so.

Right now I would worry about getting your life back into order after filing and not so much on building a new home in two years cause you just may not be able to do so.

Best of luck to you with your endeavors!

We've already spoken to a lender about our bankruptcy. Obviously, we can't do anything now, but we did speak with someone just to pick their brain and see the steps we need to take to get ready.

You're absolutely right...No one can predict what will happen with the housing market in 2 years, but I was just curious about a possible hypothetical situation. I'm very afraid that we owe more on our home than what it's worth and worried about how we will eventually have to sell it. I was very curious about what would happen if we can't sell it and just give it back to the lender. Again, no one can predict 2 years down the line. Very true.

My life IS in order and I haven't felt this much peace in years. Building a home is something we will do and something we've always planned and will continue to plan on doing.

Thanks so much!

[Flamingo]

I'm very afraid that we owe more on our home than what it's worth and worried about how we will eventually have to sell it. I was very curious about what would happen if we can't sell it and just give it back to the lender. Again, no one can predict 2 years down the line. Very true.

My life IS in order and I haven't felt this much peace in years. Building a home is something we will do and something we've always planned and will continue to plan on doing.

I can understand your situation but you have to weigh out the circumstances when the time comes if you can risk all that after filing a BK and then possibly putting a foreclosure on your records in your hypothetical 2 year timeframe. I would certainly think the best thing you could do is ride out the market until values increase and then go for your dream house. The market cannot stay down forever and it might just take longer to build your dream since housing values will take a long time to climb back up there to a decent level. It will be a long time before the housing value boom of the past several years ever appears again, if it ever does. There is just to huge a glut of homes on the market right now and will also be over the coming years. I certainly would avoid the double jeopardy on your credit reports of a BK and then a foreclosure! Your credit would be extremely wrecked!

[No Gravy]

We've already spoken to a lender about our bankruptcy. Obviously, we can't do anything now, but we did speak with someone just to pick their brain and see the steps we need to take to get ready.

You're absolutely right...No one can predict what will happen with the housing market in 2 years, but I was just curious about a possible hypothetical situation. I'm very afraid that we owe more on our home than what it's worth and worried about how we will eventually have to sell it. I was very curious about what would happen if we can't sell it and just give it back to the lender. Again, no one can predict 2 years down the line. Very true.

My life IS in order and I haven't felt this much peace in years. Building a home is something we will do and something we've always planned and will continue to plan on doing.

Thanks so much!

Just my .02:

I had to file BK in 1994, due to medical reasons. The doctors didn't expect me to live, I wasn't able to work and disability took 9 months to kick in. Funny thing happened...I got better and survived ;-)

In 1997 I bought the house I'm in now, 3 years post bankruptcy and on one income.

While it's true we never know what's ahead (in the housing market or anything else), I don't see anything wrong with having hopes and dreams, and planning for the future, as long as you stay flexible. You might also check on Zillow if you're interested in the *possible* current value of your house (it's accuracy is better in some areas than others).

My comment doesn't address your original question, but I just wanted to chime in with my thoughts. Best of luck with your plan

[Stilltheone]

Just my .02:

I had to file BK in 1994, due to medical reasons. The doctors didn't expect me to live, I wasn't able to work and disability took 9 months to kick in. Funny thing happened...I got better and survived ;-)

In 1997 I bought the house I'm in now, 3 years post bankruptcy and on one income.

While it's true we never know what's ahead (in the housing market or anything else), I don't see anything wrong with having hopes and dreams, and planning for the future, as long as you stay flexible. You might also check on Zillow if you're interested in the *possible* current value of your house (it's accuracy is better in some areas than others).

My comment doesn't address your original question, but I just wanted to chime in with my thoughts. Best of luck with your plan

Awww...thanks for the support.

Our house doesn't show up on Zillow because we're in a brand new subdivision and it can't find our address...but thanks for the advice.

Our main reason for wanting a bigger home is wanting another baby...the house is tied into the expansion of our family....so it's pretty important to us.

I am a definite planner...typical type A, obsessively clean.. I need to have a plan, a goal to work towards. Another baby and bigger house is my main objective right now...I am working on the steps to get closer to my goal.

Thanks again!

[r.m]

[If we can't sell our house, are we able to give it back to the bank? What would be the reprocussions?]

A fresh foreclosure on the public record section of your credit report...

which would pretty much kill any chance of getting a loan for the new home.