Forclousure coming close, please help :(

[Blue_Ray]

I got a couple of questions to ask.

Since we have not been making any mortgage payments for about 5-months now, I have yet got a letter stating when I need to be out. I did call my mortgage lender and they said they have yet to proceed to foreclosure.

So I have couple things I need to ask and please help if you can provide any info:

First question: Since I have not been making any payments and once we get kicked out and we move on, is there a change I will have to pay taxes (property ect, ect)

Second question: I have a second mortgage on the house and recently I got our discharge on Chapter 7. The question is, on the 2nd mortgage we did sign a reaffirm. So does anyone here know what they could do, if anything if we proceed to foreclosure on first mortgage?


Thanks for all your help. Things are coming closer and seems to be very scary ride.

[BassBoy]

First question: Since I have not been making any payments and once we get kicked out and we move on, is there a change I will have to pay taxes (property ect, ect)

Probably not likely. Lenders will pay these from your escrow account, and if that becomes depleted, then the lender will continue to pay these and that will be added to the debt you owed, and of course that was discharged. The lender will acquire their own insurance as well, so no worries here.

Second question: I have a second mortgage on the house and recently I got our discharge on Chapter 7. The question is, on the 2nd mortgage we did sign a reaffirm. So does anyone here know what they could do, if anything if we proceed to foreclosure on first mortgage?

You reaffirmed this debt and this will become an unsecured debt when the home is foreclosed, and you do understand that you'll more than likely have to repay this debt.

[willsurvive]

When did you sign the reaffirm of the 2nd mortgage? I do believe (we were told by our attorney) that you have 60 days to change your mind once you sign a reaffirmation. I would check into that. If not, you will probably have to repay the debt on the 2nd. I wonder why your attorney told you to reaffirm if you intended to let your house go?

[Blue_Ray]

[brokenbuthealed]

If you call those people they do not typically want to pay retail prices for homes. They may be able to negotiate a short sale though, which would enable them to buy the house at a discount and you to get out of it without having to pay the balance.

[HHM]

Wow, talk about shooting yourself in the foot.

You will not be liable for property taxes, the foreclosing lender needs to deal with these in order to pass clear title, the lender will simply add this to the "collection bill".

Did you reaffirm both mortgages or just the second?

In any event, 2 things can happen with the deficiency balance
1. It remains a collectable debt, in which case it will more than likel be assigned to a collection agency and you will have to deal with collections and a possible lawsuit.
2. The debt is foregiven (I am seeing this less and less with 2nd mortgages, they prefer to sell it to Junk debt buyers), in which case you will have to declare the difference as income for tax purposes (see IRS form 982).