Short Sale And Bankruptcy
We submitted a SS package to Nat'l City. We confirmed receipt of the package and everything was in order. Later we contacted them and the package was under review/they were sending their own appraiser out.
Fine. We'll wait.
Then about a week later, we find out from the homeowners that they have now filed bankruptcy and want to keep the house.
What???
My question is: How long do you think the lender will entertain homeowners who are over a year behind on their mortgage payment and filed bankruptcy.
Should we/can we call the lender and find out the status and what are our chances that if the homeowners do default again (which they will) that the lender would contact us?
Depending on the State they are in, they will be allowed to keep their house in bankruptcy if they can prove they are able to make the payments going forward. Primary residences are excluded personal property in most states under both chapter 7 and 13.
The lender has no option but to "stay" any and all foreclosure action by law until the bankruptcy hearing. They have the option to appear at the hearing and contest the exclusion of their loan, but this doesn't happen often. Basically, you can contact the lender and offer to have them contact you at some future time in case the mortgage defaults again, or you can wait until the hearing and find out if they contested. Either way, if they want to keep their property and can prove their ability to make payments, the likely chance is that they'll be allowed by law to do so. I'd move on.
Thank you for the reply. The state they're in is NJ. Believe me, these people cannot afford to pay the mortgage based on their incomes alone. The amount of bills we presented were piling up at the time and probably still are.
We'll contact the lender every few weeks and see what happens.
Thanks!
The mortgagee probably won't be able to speak with you while the loan is shielded by bankruptcy...
The reality is that the majority of the folks who enter into a Chapter 13 fail to be able to keep their home... unless the underlying financial problem has self corrected.
Keep in contact with them, a card every few months.
[addsig]