Is there a legal way to purchase a new house if your house was in the bk yrs ago ?

[terre]

My bankruptcy was discharged in 2008. I wanted to keep my house and worked really hard for a modification which I did recieve and was very greatful. I was given a mod that increased every year. I was happy and I have kept up thinking I could refinace when the payments would get too high. That brings us to now, I went to refinance and found my second mortgage which was discharged left a lien so I can not refinance. I talked to my lawyer and they explained I do not owe for the house, it is not on my credit. I have been on time for 3 years. Any way my question is I am planning on walking away because I can not afford this house. I love my home and I really wanted to keep it. I do not want to do anything illegal but I am in a bind, I have many pets so renting is not a choice. My credit is good, I could buy another house, but is that buy and bail, while my credit is good I would like to do that, but nothing illegal. I do not know what to do. A forum like this helped me so much before any suggestions?

[keepsmiling]

Hi Terre and welcome!
As long as you did not reaffirm your mortgage, you can walk away from it.
Most here have reported that their mods did not require or equal a reaffirmation.
But...What happened with the second mortgage in the bk? Was the house underwater? Were you in a 7 and you just stopped paying the second? Did you strip the lien in a 13?

[terre]

It will 5 yrs. I stopped paying the second, they never contacted me and I just made the payments the mid asked for. I went to refinance and that's when I found the lien. I am under water. About 35000.00 when you include the second. They can not get anything so I guess no news was good news. I am in a divorce on top of the market. I want to down size. I can not keep up with the payments and eventhough I love my home it us really TOO much house for me. I was told by my lawyer that a short sale did not make any sense. I have improved my credit and have really limited my spending but I can not keep this up. I just want to leave but I want to buy not rent as I have pets and it is hard to find landlords that will allow all of them. Do you know if a house can be bought in my cercumstance?

[TBA]

I think this would be a good question for an attorney.

[justbroke]

You have several options. You could attempt to settle with the second lienholder. You could try to qualify for a "second" home (vacation home), but that has many restrictions (typically needs to be 50+ miles away, large downpayment, etc). You could attempt a short sale (but that will cause a delay in getting a new home since you must have 2-3 years from that short sale for a new government backed loan).

Your other option is to actually downsize and deal with the fact that the pets could be a problem. You could seek out private landlords and offer large (non-refundable) pet deposits and redecoration deposits/fees.