Colorado foreclosure & sale after BK

[FS09]

I was discharged from a chapter 7 BK in September. I included my home in the BK as I owed $406K on the 1st to MorEquity and $120K on a 2nd to Ditech. The house is worth approx $390K according to Zillow. The house goes up for sale/auction January 6th. What do you think they will ask? I'm trying to judge how much longer I will be able to stay. Crap shoot I know, but trying anyway! The county told my typically the mortgage company will try to get what you owe on the 1st, plus any back taxes, legal fees, etc? Is that true? If so, I may be here a while! That can't be true though is it??? FWIW, there are a ton of legit houses for sale in my neighborhood, and a bunch of foreclosures...

[JoeBankrupt33]

In my case, the 1st mortgage bank purchased my home at the auction, for about 225k. Within a month, they sold it for 185k. It probably depends on the bank. Mine was also FHA (I know yours is not), so they probably don't care as much when there is mortgage insurance.

[BKch7]

colorado foreclosure

I am in a similar position in colorado also. We did not reaffirm our 1st or 2nd in our chap7 bk for the same reasons as you. Our house is not worth what we owe. We owe $250k on the first but with fees it is now $275k and the second is $50k. The house is worth about $220k. The second offered to settle for 10% but the 1st with HSBC is the problem. we were discharged 8/09. We have a contested rule 120 hearing next month. I am not sure what to do.

Have you had your rule 120 hearing yet? The rule 120 hearing is the hearing where the bank needs to prove that they have the right to foreclose. I believe all they need to do is prove that you are behind and that they have followed proper foreclosure procedure (file proper notices).

I am planning get a forensic audit through NACA to see if any of the loan docs are not fully proper.

My main goal is to negociate with HSBC to offer an amount that is fair market value for the principle and about 5% interest. It seems like they should accept this since I now can afford a reasonable mortgage payment. If I can work out a solution with the first then I can hopefully work out a settlement with the second.

What is your plan?

[DeadManCrawling]

Principal reductions, amazingly, are still quite rare. Would seem to be in the lener's interest, over foreclosure, but there are other factors at play. One is PMI that can cover all or part of the lender's loss. If they negotiate principal downward, they may not be able to collect PMI.

Another factor is this: If they offer it to one person, everyone will want some. Their view is that this is bad for them over time. Of course, so is foreclosure, but they don't see the big picture, I think.

That being said, I was offered a 70k reduction from BoA on principal, 5 years at 2% and the rest of the term capped at 4.5%. The paperwork never did materialize, though, and we filed last Friday.

Good luck,

-dmc