charmgoodcredit Posted November 23, 2009 Report Share Posted November 23, 2009 :confused:Hello all,Last year we filed chapter 7 bankruptcy and included everything. My husband decided to work with the mortgage company(against my better judgement). Now to the present, we would like to walk away from the house (he's finally agreed that keeping it wasn't the best decision). Are we now stuck because we signed modification paperwork? Will we owe the bank the principal balance? One more thing, everytime we call they still read us the bankruptcy disclosure. Thanks Link to comment Share on other sites More sharing options...
Denita Posted November 23, 2009 Report Share Posted November 23, 2009 Do you have a copy of the modification you signed? Is there a section in the modification that specifically states that signing it is not a reaffirmation? I have read on another BK board where the modification came in with a written paragraph that it was not a reaffirmation, but I don't know if that is typical or if it was a special situation. If it were me, I would look to the note and modifcation papers you signed first. Then call your BK attorney to make sure that it either constitues a reaffirmation or not. If you can't get in touch with your BK attorney you might try a real estate attorney. For your sake, I hope it is NOT a reaffirmation. Good luck. Link to comment Share on other sites More sharing options...
charmgoodcredit Posted November 23, 2009 Author Report Share Posted November 23, 2009 Hey,Denita just called them and spoke with their bankruptcy dept, and the girl told me that my loan was not reaffirmed with the first modification that all payments wer're making know are voluntary. Yes!! She said that the payments we have been making are not even being reported to the credit bureaus. Now, the foreclosure process...help. When will they want us out of the house? Will the foreclosure proceedings start where they left off or will they have to start all over? Live in MI. Link to comment Share on other sites More sharing options...
Denita Posted November 23, 2009 Report Share Posted November 23, 2009 If you are current with your payments on the modification, then they will have to start over with the foreclosure process, IMO. We are still running 18 mths to 2 yrs here for the foreclosure process, even though the various websites say 6 months. The difference is the sheer volume of foreclosures here in S. Fl. Check with your BK attorney to see if he has an idea of the current timeline for foreclosures in your area. Link to comment Share on other sites More sharing options...
charmgoodcredit Posted November 23, 2009 Author Report Share Posted November 23, 2009 We're only one payment behind, I'll just let my hubby know and we'll start banking and fixing our credit report. Thanks Denita Link to comment Share on other sites More sharing options...
2ndTimeAround Posted November 24, 2009 Report Share Posted November 24, 2009 (edited) :confused:Hello all,Last year we filed chapter 7 bankruptcy and included everything. My husband decided to work with the mortgage company(against my better judgement). Now to the present, we would like to walk away from the house (he's finally agreed that keeping it wasn't the best decision). Are we now stuck because we signed modification paperwork? Will we owe the bank the principal balance? One more thing, every time we call they still read us the bankruptcy disclosure. ThanksWow - you guys are in the Pickle Jar big time!!!Denita has some valid concerns about reaffirmation, your lender isn't going to do anything for you until you get out of your debt problems. You are confined to the limits of your bankruptcy. What does your bankruptcy disclosure actually say? What is the name of your lender?You said your chapter 7 bankruptcy included everything and your husband decided to work with the mortgage company. Did your mortgage company work with you on lowering your payments? In most cases you need to wait at least 12 months before to reapply for another one.Now to the present, you said you we would like to walk away from the house. Knowing that your chap 7 is going to be on your report for 7 years, and as dropped your credit score. You walking away from your house and letting the foreclosure takes it course. A foreclosure will stay on there for 10+ years and you will most like be a member of the 400+ club. If you do not do anything to protect yourself - your lender can come back at you at a later time and file a deficiency judgment. This is the difference of what they sell the property for and what your balance was on the loan. Since you will have a history of bankruptcy and bad credit, you may not be awarded another bankruptcy to save future property.In the near future - it would be wise to seek out legal advice to help you. Right now - if you try to talk with someone - one) they will take your money and do nothing, and two) you need to wait till your one year anniversary before you could try to modify anyway.FYI - Florida is a Judicial state. A foreclosure going through the court process can take up to two years. Also the value vs the amount owed has an important part on how fast the bank moves. Michigan is a Non Judicial state. Lenders can sell the property in as little as 4 to 6 months because there is no court action. Again the value vs the amount owed has an important part on how fast the bank moves. Why? The bank has nothing to gain by forcing you out and letting the house deteriorate. Lastly - my advice to you is 1st speak to your spouse and agree on common goals. Then work on a plan to get you out of the hole your in, and make a action plan of what to do..... Edited November 24, 2009 by 2ndTimeAround Link to comment Share on other sites More sharing options...
charmgoodcredit Posted November 24, 2009 Author Report Share Posted November 24, 2009 (edited) Loan was NOT reaffirmed, the mortgage co(bankruptcy) dept stated that all payments we have made thus far have been voluntary and that none of them have been reported on his credit report. So in essence it's like we're renting from the mortgage co because each time we call we are read the bankruptcy disclosure. Why would you think that we would have a foreclosure and bankrupcty I would think only the bankruptcy, not really a foreclosure because they all ready own the rights to the property. And if you knew the condition that the house was in you would say walk, it was a bad deal from the start. Also, I live in MI, do you know what home sell are like here LOL really. Also didn't have to wait a year to modify, they are willing to modify the current mortgage details now lowering it 100(which is still too much for this house) We're walking. Thanks for the advice I will consult my old bankruptcy attorney. Edited November 24, 2009 by charmgoodcredit wanted to add Link to comment Share on other sites More sharing options...
WhoCares1000 Posted November 24, 2009 Report Share Posted November 24, 2009 From what I gather from the story, the OP did a Chapter 7 BK and while in the BK process, did a loan modification with the mortgage company to keep their house. The mortgage company however did not request that the OP reaffirm their mortgage. If this is correct, here is how I see the issue:1) Since the mortgage was not reaffirmed, the lien remains and the bank could take the house anytime it wants. The OP however kept making payments and the bank decided to not take the house right after the BK2) The reason the bank did not exercise its lien rights is that the Michigan housing market if FUBAR due to the Michigan economy. Unlike FL, CA, or NV; Michigan will not see a bottom and rise because the fundamentals of the Michigan economy are bad. The bank does not really want this house. The OP therefore still owns their home.3) The OP has missed payments and has decided to just walk away. Because the OP did not reaffirm the mortgage, the only think the bank can do is take the property. They cannot go after the OP for the difference because that is covered under the BK discharge.4) Since the Michigan housing market is so bad, it could be possible that even in a non-judicial state, the foreclosure may take up to 1 years to perform simply due to the backlog of properties. Now there are investors getting into the Michigan market but even so, due to a depression level unemployment rate and record foreclosures, the bank is overworked when it comes to Michigan5) It could also be possible that the bank does not want this house and may not exercise its rights right now. This is going to be an interesting area of law because what happens once the person has not made payments in so many years that the SOL runs out. The title will still be clouded by the lien and it will be interesting to see how that turns out.6) If a foreclosure does occur, don't expect to be able to borrow any money for 2 years and to be able to get a mortgage for 4 - 5 years. Your credit report will be severely damaged.So, based on the facts, the first thing I would do is talk to the lawyer that did the BK and verify that you did not reaffirm the mortgage. Don't rely on what the bank told you. If you did not reaffirm the mortgage, I would pile up money to get ready to start renting a place but would stay in the old place until kicked you. You may want to at least make sure the property taxes are paid because even if the bank is running slow, the county/town/city will not be as slow. Once you get the sale date, wait for the sale, and then generally you will have 30 days to vacate (they could force you out immediately but probably will not do so). From there, just rent a place and good luck. Link to comment Share on other sites More sharing options...
charmgoodcredit Posted November 24, 2009 Author Report Share Posted November 24, 2009 thanks, but I don't get the foreclosure part, how it could be listed as closed out under bankrupcty and as a foreclosure? the loan was not reaffirmed under the bankrupcty I checked my docs everything was discharged. so are you saying that it is going to show up as a bankrupcty and a foreclosure???That's weird Link to comment Share on other sites More sharing options...
Denita Posted November 24, 2009 Report Share Posted November 24, 2009 Once you surrender your home in bankruptcy (and do not reaffirm the mortgage) then the TL will show as iib and zero balance. If you stop making payments after your BK the bank has the right to foreclose. In fact, that is how they regain title to the property (unless you are able to do a deed in lieu with them). The foreclosure will show on the public records, BUT it is not suppose to be reflected on your CR because the property is already iib with zero balance. The bank is just excersizing its "in rem" rights against the property. You will not owe any deficiency because the BK wiped out the debt. Verify this info with your attorney. Look at this website to find the cases to support the proper credit reporting http://www.myfaircredit.com/forum/. There is a chance it will be reported wrong at some point, but you have the case to make them report it correctly in that really excellent website (originally provided by Ladynred here in the BK section). Link to comment Share on other sites More sharing options...
charmgoodcredit Posted November 24, 2009 Author Report Share Posted November 24, 2009 thank you Denita, those two had me thinking it was going to be shown as both, I didn't think so, I also emailed the attorney who did the bankruptcy he's very nice and is willing to help so I am just going to make sure with him. Thanks for the link also.cfm Link to comment Share on other sites More sharing options...
WhoCares1000 Posted November 24, 2009 Report Share Posted November 24, 2009 OK, I guess I was wrong on the reporting. That is good then. I still would not count on being able to get a house in the next 2 - 3 years then.As for Michigan Foreclosure, the sale will usually occur between 60 days and 90 days late. However, there is a redemption period that is usually about 6 months. The only way to shorten the redemption period is if you abandon the property and I do not think the person purchasing your place can start eviction proceedings until the redemption period is over. This should buy you 6 - 9 months to put aside mortgage payments (rather than spending the money) so that you can move out before the end of the redemption period.After that, you should be ready to start rebuilding. Link to comment Share on other sites More sharing options...
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