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Foreclosure ain't gonna happen?


willingtocope
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We're waiting on our BK 7 to be discharged. We didn't reaffirm on the 3 mortgages against our house and we haven't been making payments, because we're really upside down. Our BK lawyer is sorta working on getting the 2nd (line of credit for our business that went belly up) and 3rd mortgages adjusted/forgiven...unless we can get those numbers down, it makes little sense for us to try to keep the house, particularly since at the moment, we're both unemployed.

Anyway, we had a 4180 meeting with the IRS yesterday, and the examiner told us it is her experience that, at least in our area, lenders seldom foreclose because a). its very expensive, and 2). they are likely to wind up with a property they can't sell for anywhere near what they're owed. She said we can probably swing a deal that allows up to sell the place...pay them the 1st mortgage...and walk away with $10-20k.

Can anyone confirm this reasoning?

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Huh? I realize they're not going to let this continue indefinitely.

Let me rephrase this. The IRS examiner is saying, in her experience, it is likely that the mortgage holders will work with us for a limited period of time...to allow us to sell the place, rather than they foreclose.

Correct?

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You are correct in the assumption that lenders never want to foreclose on property, especially the lenders in 2nd & 3rd position.

So they will probably let you do your best to sell the property, but in our past conversations, the property has liens against it for much more than the value in the current market.

But you should resolve yourselves to the fact, that at some point, there will be a notice of default delivered, and then you will have a limited amount of time to leave.

Sorry that this has all come down to this for you. I hoped, and still hope, that your lawyer was able to put the debts into your bk, so you dont have both on your credit file. Post BK is fairly easy to get a loan, Post Foreclosure is a little more difficult, but both combined, very expensive to do, but there are investors that will do it.

Charles

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Thanks for the reply, Charles. Our lawyer is working on 2nd and 3rd, and the BK hasn't been discharged yet. IRS examiner (playing the good cop, I'm afraid) said they'll probably just lien against the company and leave us alone personally, so there is still some hope we might be able to sell. We need to get a few more things settled, then we'll move on.

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