Foreclosure help

[cb2boys]

We filed Chp 7 & it was discharged 2/06, however, we still haven't been able to catch up on our mortgage payments. We are making regular payments, but not getting caught up...My husband has a 401k through work, which does allow loans against the 401k, and we have about $7,000 available to us. However, the plan only allows for 2 outstanding loans at a time, and we already have 2 outstanding loans. The first outstanding loan was for a down payment on our house 7 years ago...that payment automatically comes out of his paycheck every payperiod. The other loan was also before we filed bankruptcy, to try & get us caught up on some other expenses...The 2nd outstanding loan only has a balance of less than $4,000.

What I need to do is find a lender who will loan us the $4,000 for a short time frame (30 days or so), then pay off the 2nd 401k loan, and turn around & request another 401k loan including the $4,000 for the lender and the only $6,000 of the available $7,000. Does that make any sense?

Any ideas of a lender that would do that for us? Or directions to go in?

Thanks!

[BassBoy]

First thing I can suggest is to hault the 401K withdrawals. You're messing with your retirement and you'll have nothing when you retire.

Do you have equity in your home? You could look into refinancing. I know this may sound impossible, especially after BK, but we do have a mortgage banker member who has been extremely helpful to other members. Hopefully he'll catch this thread and be able to offer his expertise.

[cb2boys]

Sorry, but I think you misunderstood...these aren't 401k withdrawals, they are loans from the 401k. The FULL balance of the 401k (including the loans) are still earning the interest it was BEFORE any of the loans...If he quit his job, and withdrew his 401k to rollover, THEN the 401k loans would be pulled from the 401k balance....

[keepmine]

It really sounds like you have a house you can't afford. The answer to lifes financial problems is not to borrow more money. The ink on your bk discharge isn't dry yet, you are on the hunt for new credit.
Did you reafirm the mortgage? If not, and there is no equity then, just let it go. If you have equity, sell it and rent for awhile and get your finances sorted out.

[BassBoy]

OOPS cb2boys, I re-read your post and I saw that they were loans and not just withdrawals. Anyways, can you tell us if you're behind on the payments and has your financial situation changed that no longer allows you to afford what you once could?

[SinkingFast]

This all sounds oh so familiar!!

Been there done that. The house is bleeding you dry and you just don't know it.

We were never behind on our payments. Mortgage was always current, but we were always in debt. And reorganizing. And borrowing on the 401K. Then took a 2nd on the house to pay off the CC's and the 401K loan. Then ran up the CC's again. Then did a total refi of the house with a super inflated appraisal to get enough money to pay off all the CC's. And then the CC's started building up again. AND THEN,.............. Hubby lost his job.

You really do need to get outa that house. If you have little to no equity, you can contact your Lender about a Short Sale.

If the debt was discharged in the BK, and you can't sell, then just walk.

Don't stay and be eaten alive by that money pit! Eeerrr, I mean house.

[debtisbad]

Houses are money pits. The American dream just is not what it once was. My mother made the comment to me "everyone needs a home to retire in that is paid off so they'll have somewhere to live" I wanted to say but "your house is in Florida, even though you own it, you are being eaten alive by insurance and property taxes". Her property taxes + insurance and maintenance equals a rent payment. Homeownership is no longer my American dream!

[Hillbilly]

We filed Chp 7 & it was discharged 2/06, however, we still haven't been able to catch up on our mortgage payments. We are making regular payments, but not getting caught up...My husband has a 401k through work, which does allow loans against the 401k, and we have about $7,000 available to us. However, the plan only allows for 2 outstanding loans at a time, and we already have 2 outstanding loans. The first outstanding loan was for a down payment on our house 7 years ago...that payment automatically comes out of his paycheck every payperiod. The other loan was also before we filed bankruptcy, to try & get us caught up on some other expenses...The 2nd outstanding loan only has a balance of less than $4,000.

What I need to do is find a lender who will loan us the $4,000 for a short time frame (30 days or so), then pay off the 2nd 401k loan, and turn around & request another 401k loan including the $4,000 for the lender and the only $6,000 of the available $7,000. Does that make any sense?

Any ideas of a lender that would do that for us? Or directions to go in?

Thanks!

I retired in '98 and dipped into my retirement savings year after year to keep up with a too expensive mortgage, until this year, because my savings of 25 years have now been depleted down to $0.
In my case, loans from my account were funded by the sale of stock,-thus the the loans reduced the assets in my account proportionately-no earnings on the funds removed, are you certain your outstanding loan amounts are still earning interest? The only interest that mine were "earning" was from whatever amounts that I was repaying.
Finally realizing the futility of my position, I am allowing foreclosure to take place on my home of 31 years and am moving to a less expensive home that my income will be able to support.
In that you have already filed Chpt. 7, and were released from your other debts, and you still cannot get caught up, taking out more loans is not likely to improve on your situation. That $7000 available is likely to disappear just as fast as previous loans, leaving you only more debt.
Unless you have reason to seriously expect future dramatic increases in your income(s), depleting your savings to meet the costs of retaining the property will likely end with you having neither your savings nor the property.
Now this is only how it appears to me from the limited information that you have thus far supplied, I give you my sincere hope that you are able to pull yourself through, retaining both home and savings, if you are certain that is your long term desire.
As for me, I'm heaving a big sigh of relief now that I made the decision to walk away now, rather than suffer under an overbearing mortgage on a place that I would still certainly lose before much longer. (Should have done it while I still had some savings left)

[SinkingFast]

I have to agree with you Hill!

We finally got the house sold and I am so relieved to have that monkey off our backs.

We rent now and the feeling of freedom is wonderful.

If Hubby looses or decides to change jobs again, we don't have that ball and chain tied around our necks to unload before we can move forward with our lives.

We've played,.......... Yes, that's PLAYED with the bathtub drains. One wasn't holding water and the other was pooling when you take a shower. We saw on "Ask This Old House" how to fix that so we're trying to do it ourselves. If we can't get it to work, no worries about calling and paying a plumber to fix it. We've got a full time maintenance guy we call who'll come and fix it for us. No muss, no fuss, no bills. So we can afford to learn something and try and fix it on our own. If it works, great. If not, oh well. Call the fix it guy and he'll take care of it.