Asking Bank For Short Sale
Our house was included in a bankruptcy in 2001. We just found this out recently.
Atty says since we are upside down in the loan, just to stop making payments and let the bank foreclose. My question is can we ask the bank for a short sale if it was included in the bankruptcy or should we follow our atty's advice.
thanks :-?
One more question....The bank never called us in 4 yrs or sent letters when we were behind. I was told by the bank this past April this was because they are not allowed to contact us because of the bankruptcy. Now out of the blue they have been calling us non stop for the last two weeks. At first I spoke to them and asked them why they were allowed to contact us now but couldnt the last four years. Of course i didn't get an answer. Any ideas?
Sounds like you have no personal responsibility for the loan, it had been discharged in bankruptcy...
the bank can foreclose to force the sale of the home
You can try to sell via a preforeclosure short sale to prevent a Sheriff's Sale or Trustee's sale on your credit profile...
Or, just hang on, rent free, until you are thrown out.
[addsig]
Thanks for the reply.
Yes it is nice to be putting money in the bank and paying off other bills.
Maybe i will continue to do this. There is an entry on the Mortgage on our credit report that does say "included in bankruptcy', howeve there is also another entry that they continue to report us late on, thus lowering our credit score. Is there anyway around this?
Was is a chapter 7 bankruptcy?
If so, being that the mortgage is a secured debt, it is probably not dischargeable in bankruptcy. Check back with your attorney. In Oregon, for instance, the creditors cannot bother you about your home loan during the bankruptcy process unless they receive court order that they may do so. Maybe they "forgot" about your house in the time from the discharge to the present. Banks seem to be somewhat dinosaur-ish sometimes.
By all means try a short sale. Is your home in need of repair at all? If so, this may help your case.... good luck.
Just because the mortgage was "included" in the bankruptcy does not mean it was discharged.
You will probably want to speak with your bankruptcy attorney about this.
Also, if you try to do a short sale, the bank will require your last 2-3 mos. of paystubs, bank statements, tax returns. Since you mentioned about "paying bills & putting money in the bank", that may disqualify you from the hardship the bank requires to do a short. Still worth a shot though.
Yes it was a chapter 7 (Ohio).
I have asked the bank when they called last week, why they were allowed to call if the house was included in the bk. I said you have called for 4 yrs, why now?
The guy told me in so many words, why are you so worried about the past, we are calling you now arent we. I told him because i wanted to know...if you couldnt call me for 4 yrs, why are you doing it now. I never got an answer. sounds fishy to me!
We have talked to two attys. The first one was the original atty that did the bk. He said the he did not reaffirm the loan.
The 2nd atty is the one who made sure it was included in the bk and discharged.
He is also the one that advised us to keep the money, pay off bills and save the rest. I also have letter from the bank saying that it was included in the bk and that we had no obligation to the loan.
I can't understand how you got by for so long - your file must have be badly mis-handled somewhere.
My understanding is: behind on your payments, file bankruptcy (7 or 13); then resume making payments and you keep your house, but all other debt is descharged (erased). Looks to me like someone forget to collect their money for 4 years.
You can certainly order a balance payoff from the bank - see if they are going after all of your missing back payments, or just the principal. If they'll take just the principal, you should be abel to get a refi loan even with your credit. If they are trying for the whole balance plus interest, I'd definately try to arrange a short sale - but you'll almost certainly have to give-up title to the property to get the bank to accept a SS. Why would they want to give you the house when you won;t pay them what you owe???
I'm very curious what the suggest as for the BPO.
Steve
We had been making payments all along, because we had no idea the house was included in the bk until this past April. We fell behind on our mtg pymt and i had called the bank over and over asking for help. Each time i was told to continue making your payment.
Which we did. THen in April i called again because although we were making our pymt, we still had a few months in errors that we couldnt come up with a "lump sum" to catch up. This is when i was transferred to the foreclosure dept.. and found out they had foreclosed 2 weeks prior. They set us up on a payment plan that was not feasible for our budget. This is when we contacted an atty....and this is where we are at now.
Other background info...
We tried to refinance but cannot get a comp appraisal. bank has us owing 12K more than we originally financed.
We tried about 15 diff appraisers. without any luck.
yes, it makes a little more sense now.
I believe you need local help - someone to go over your payment history in detail and look at all of the documents you have prepared.
If you want to save your house, talk to your BK atty for a referral to an accounting office to make sure that the bank is doing "correct math" and isn;t penalizing you for your BK.
I'm glad to know you have been making your payments. This should make it a little easier for you to do a refi. If it turns out the bank is correct; then I'd definately pursue a short sale using the absolute lowest appraisal number you found. Some mortgage broker will find you a loan and then if you pay it ontime for a year you can refi again and get a much better rate.
steve