How long were you able to stay?

[GWBcasualty]

What is best really depends on your situation and what you are hoping to accomplish. What are your immediate goals specific to a foreclosure and BK? Do you want the home?

Goals?
Get a fresh start through BK. I never contemplated foreclosure until a few days/weeks ago. We are current on the loans.

We lived in this home about 10 years, did a lot of improvs and at one point had almost $400k in equity in it at the end of 2006... sadly that equity vaporized in thin air. Clearly is difficult to let go.

Short term. I can see no chance for real estate appreciation, so I am aware that I am basically throwing away money by paying the mortgages.... staying in the house one year for free and walk away would allow us to build a nice little cushion of savings.

However, if I could reduce my payments by 25%-30% or maybe combine the 1st and 2nd through a MOD (the loans are both ultimately owned by BofA although through different subsidiaries).... I can see it worth it to stay and hope that 5-10 years down the road I can get back a nice chunk of money by selling.

Both scenarios would require me to stop paying... but which is the best way to go in order to work out a loan MOD? Stop paying pre BK or post discharge?

[GWBcasualty]

You sure on the value of your home? Where did you get the estimate?

Zillow

[jlmaca]

1st 375K - 2nd 150k - Home value 475k

I received conflicting advice.

1) Stop paying now. File Ch 7. Ask for loan MOD.

2) Keep paying. File CH. 7. Stop paying after discharge and ask for loan MOD.

What's best?

What is best really depends on your situation and what you are hoping to accomplish. What are your immediate goals specific to a foreclosure and BK? Do you want the home?

[DebtStinks]

You sure on the value of your home? Where did you get the estimate?

Do you want to keep the house? If the 1st mortgage is equal to or greater than the value of the home I believe you can strip the second mortgage off in a Chapter 13. But I guess this also depends on your other unsecured debt. But if your 475k is correct for the value of the house then you have 100k equity that could go to the 2nd.

Our first is 280k and second is 76k with a home valued at like 119k at best in the current market. The mod programs pretty much blow for people that are underwater by a large degree. Principle reductions don't really happen and if they do they want the money back if you ever sell the house for a profit in the future.

So we stopped paying, filed a ch7, and are just waiting for BofA to foreclose. But who know how long that will be. Living rent free in the mean time.

[GWBcasualty]

1st 375K - 2nd 150k - Home value 475k

I received conflicting advice.

1) Stop paying now. File Ch 7. Ask for loan MOD.

2) Keep paying. File CH. 7. Stop paying after discharge and ask for loan MOD.

What's best?

[DeadManCrawling]

Yes, you can get through it, and I am sure you know that. The toughest lessons in life are the most valuable sometimes, and that is what happened for us.

We do what we must to survive, because the only other option is to concede defeat. But then what? Short of death, we HAVE to go on. so, facing it from that view, anything becomes a little easier to bear.

Good luck to you and your family, I hope it all settles out exactly as you want it to.

[jlmaca]

Thanks very much for sharing your story. I think you and your family are incredible for how you have treated your father in law. Good things happen to good people. My wife & I had to file BK because of her chronic Lyme disease. It basically robbed her of most muscle function for years. Treatment has cost a fortune. Prognosis is now good with treatment from a specialist is Boston. We've been able to save enough by staying in the home which they have not even started to pursue foreclosure. The place is slowing falling apart. My wife will be moving into a rental 700 miles away near her family while I wrap up things here which will take me 6 more months. A new beginning with some separation unfortunately.

[DeadManCrawling]

We had a very unusual situation, but I will explain it briefly.

We were in a 4,000 sq ft house with a 4k per month payment. It was a 2-story with stairs. These facts are important in the scope of what we did legally.

My mom in law passed away last summer, leaving life insurance to my dad in law. He has Alzheimer's disease. We handle all of his money and decisions, since mom died. He has been incapable for some time, an important factor that goes back a few years as well.

My wife and I also had a fair amount of nonexempt cash and exempt assets and cash. We pooled all of these funds last fall and paid cash for a house in his name, paid for by all of us. The reasons we were able to do so revolve around his disease, which is a terrible disease, if you have never experienced it first-hand. Anyway, in FL, it is perfectly legal to build up equity in a homestead right up to the day before filing, even with nonexempt assets, for purposes of state court matters. Where this intersects with BK law gets a little trickier with the new federal limits on homestead. We stayed just below the federal threshold, bought a foreclosure for 107k that we knew was worth double, possibly triple, what we paid.

With our attorney, we worked out this plan and explanation for the court (they never asked): 1. Dad in law was incapable of living on his own. 2. We have a fiduciary duty as POA to dad in law to maintain his well-being, physically and financially. 3. Dad in law could not continue living with us indefinitely, in a home with stairs and so large that he could injure himself in a distant area of the house and go unnoticed. This, unfortunately, had already resulted in one ER visit. 4. Florida law allows eve of BK homestead investment, even with non-exempt property. 5. Florida, and federal law, allows prosecution of fiduciary representatives who do not care properly for the elderly. 6. Given these circumstances and dad in law's rapidly deteriorating condition, it was reasonable and necessary for us to pool resources into a different home, whether we were going to file bk or not.

Our attorney discussed most of this with the trustee before we filed, so we had a high degree of confidence going in. The trustee's response was, generally, "Glad to see someone doing the right thing, once in a while."

We gave up one non-exempt asset, a BMW Z-3 that we could not exempt. Attorney said this may have been one reason the court didn't have any real interest in our other financial moves. Each of our moves was legitimate, on its own, but the "totality" clause could have been invoked. We also did not move into the new house until after our 341. This was considered a vital part of our plan. We needed the household expenses on the schedules. It gave us time to complete renovations though, so that was good.

Most people will not encounter the unique circumstances we faced. And I am glad they won't. This is one very challenging scenario. We had five years worth of medical records and legal records for dad, and a huge file detailing the years he had been required to live with us.

It worked out as I describe, no questions at all from the court, but we probably would not have been able to do this in any other district. So many unique laws intersected with each other in a manner that made this possible.

[jlmaca]

We are in 7 now, still in possession of the house, which we did not reaffirm with BoA. They have not filed to lift the automatic stay, and I do not think they will. It has been over a year now since we paid the mortgage.

We are in Tampa, FL, and our attorney says to expect a minimum of 2 more years. We have moved to another house because the upkeep on the old place was hideous, and we were able to buy a smaller, nicer place outright. We still pay the HOA dues, but nothing else.

We, and our attorney, believe that 2 years is likely to be the minimum. If the housing market does not exhibit signs of recovery, it could be longer. He now has clients that were served the original NOD in 2006 and 2007 but have seen no other progress. They are with several lenders, including Wachovia, BoA and Wells.

I hope the lender moves faster, but that hope is fading fast. I would rather they pay the HOA fees. Of course, they prefer that we pay. And there is no legal mechanism I have found to force them to take the home back.

I AM considering a couple possible attack avenues, but need to wait for them to get a little farther along, and for our BK to be discharged. If we do proceed on any of them, I will keep the board here informed.

You are in CA, so, like us in FL, there is really no telling how long it could be.

If you choose to fight the foreclosure, even a little, you can drastically extend your time in the house in most cases. A simple boiler plate answer to their NOD can add 6-12 months.

Good luck

Hey DeadMan thanks for sharing your story. Could you expand on how you managed to get a new home? How did you get a new place outright? Cash mortgage? Thanks

[DeadManCrawling]

We are in 7 now, still in possession of the house, which we did not reaffirm with BoA. They have not filed to lift the automatic stay, and I do not think they will. It has been over a year now since we paid the mortgage.

We are in Tampa, FL, and our attorney says to expect a minimum of 2 more years. We have moved to another house because the upkeep on the old place was hideous, and we were able to buy a smaller, nicer place outright. We still pay the HOA dues, but nothing else.

We, and our attorney, believe that 2 years is likely to be the minimum. If the housing market does not exhibit signs of recovery, it could be longer. He now has clients that were served the original NOD in 2006 and 2007 but have seen no other progress. They are with several lenders, including Wachovia, BoA and Wells.

I hope the lender moves faster, but that hope is fading fast. I would rather they pay the HOA fees. Of course, they prefer that we pay. And there is no legal mechanism I have found to force them to take the home back.

I AM considering a couple possible attack avenues, but need to wait for them to get a little farther along, and for our BK to be discharged. If we do proceed on any of them, I will keep the board here informed.

You are in CA, so, like us in FL, there is really no telling how long it could be.

If you choose to fight the foreclosure, even a little, you can drastically extend your time in the house in most cases. A simple boiler plate answer to their NOD can add 6-12 months.

Good luck

[DebtStinks]

BofA... last payment in Feb. 2009. Our BK7 was filed in Jun. and discharged in Sept. of 2009. No NOD or any contact at all since we were discharged... they didn't bother with lifting the stay either.

This is in the Central Valley of CA with a loan of $356,000 and house worth around $119,000.

[jlmaca]

Still in our house. No payments since March '08. Counting our HELOC we are approx. $300k underwater. No NOD has been filed and have not heard a peep from Skank of America. They are even paying the property taxes. Who knows how long it will take here in California.

Nice that you have a roof over your head and can save some money. "Skank of America" how appropriate!!!

[slam22]

Still in the home. Stopped making payments 2 years ago. Got a mod and made payments from June 09 till August 09. That failed so filed BK Sep 09. Discharged Dec 09. The only communication I get from my servicer are requests to modify the mortgage again. I'm 100K underwater so I don't think so. Have not even received a NOD.

Still in our house. No payments since March '08. Counting our HELOC we are approx. $300k underwater. No NOD has been filed and have not heard a peep from Skank of America. They are even paying the property taxes. Who knows how long it will take here in California.

[jlmaca]

Still in house 1/2010. No sale date scheduled yet. Hearing for sale date still not scheduled. Last pmt 5/08. Filed 9/08 and discharged 1/09.

Still in the home. Stopped making payments 2 years ago. Got a mod and made payments from June 09 till August 09. That failed so filed BK Sep 09. Discharged Dec 09. The only communication I get from my servicer are requests to modify the mortgage again. I'm 100K underwater so I don't think so. Have not even received a NOD.

[StartingOver08]

Still in house 1/2010. No sale date scheduled yet. Hearing for sale date still not scheduled. Last pmt 5/08. Filed 9/08 and discharged 1/09.