Scott, I really appreciate a professionals point of view here so please let me know your thoughts. I’ve been reading more about the FHA Back to Work program and it looks to me like I would not need a final foreclosure to qualify based on what I can find on HUD. The qualifications of the plan state I would need just one of the following to qualify: A) a discharged bankruptcy or B) a short sale or C) a foreclosure. It appears that any one of these would qualify and while my house has still not been foreclosed my bankruptcy that included my mortgage was discharged on 3/25/2011. If I am reading that correctly I would only have to wait for 12 months after a foreclosure OR a bankruptcy discharge unlike the current FHA program that only accepts Foreclosure as a qualifier. My bankruptcy (Including my mortgage) was discharged on 3/25/2011 and I meet or exceed all of the other criteria for the Back to Work program. Does this sound correct or would underwriting kick it back somehow?
I have had several conversations in the past few weeks around the discharge of mortgage debt through a bankruptcy.
All of the conversations I have had around this subject are very similar in that:
- I discharged my mortgage through bankruptcy
- The home is upside down but I didn’t want to lose it
- Now I want to buy a new home with a more affordable payment
What it boils down to is that when mortgage debt is discharged through BK, it does not mean that you own the home free and clear, and it doesn’t mean that you’re off the hook for the mortgage.
When mortgage debt is discharged, you are protected against any personal liability should the home foreclose through or after the BK – this essentially means the lender cannot come after you for their losses.
Many times the mortgage debt will show up on the credit report as “included in bankruptcy” with is slightly deceiving because it implies that the debt is no longer owed…which is not the case.
The challenge is that if you decide you do not want to be shackled by your upside down mortgage at any time in the future, you are still facing either foreclosure or short sale to rid yourself of the home.
To buy again after bankruptcy you have to wait for 24 months before you can use a FHA loan for the purchase of a new owner occupied home.
Once the bankruptcy is complete, homeowners are still faced with the fact that refinancing into today’s lower rates is not possible due to the fact that the home is upside down.
Renting the home out to buy again after the 24 month bankruptcy wait is also a challenge, as I have detailed in this article: Can I Rent Out My Upside Down Home and Buy Again?
I am keeping a close eye on this, I think that many home owners are in this situation now after filing for bankruptcy a couple of years ago.
I think this is an important conversation to have as there are many families trying to get back on their feet after tough times.his topic?
Do you have any experience or questions around this topic? Please leave comments and questions below if you have a specific situation you would like to discuss.
Branch Manager at Broadview Mortgage Long Beach, California, I am passionate about educating and empowering consumers. Feel free to call, text or email me at (562) 999-1355 or ScottS@broadviewmortgage.com
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filed for bankruptcy2012 and got our release at the end of 2012. We let the house go . Then we had recently heard from the morgage compnay they are not forclosing and we dont owe anything. which we hadnt paid any morgage payments sence early 2012. We still do not want the house and were notified the house would be going up for taxes starting in september. We plan on just letting it go up for taxes. Will that be the end of it or will we have to claim on our taxes any thing for all the amt. we owed that they let go?? Just want this house out of our life already. Thought with the bankruptcy it was but now not to sure. :(
Hello Scott. I filed bankruptcy in July 2009 which was discharged in November 2009. Uneducated on the entire process regarding my foreclosure after bankruptcy/ deed in lieu after bankruptcy, etc... My husband and I continued to pay our mortgage on time after the discharge. Our house is upside down. My husband tried to purchase a new home this past summer and was told that he could not because we still owned our current home. We were told that since his name is still on the title/deed that he could not receive financing because our home has not foreclosed/short sale etc. Both of our names are on our home. Once we learned this information, we did a quitclaim deed removing him from the deed. Will this now allow him to purchase a home and if so, how long does he have to wait? If this does not allow him to purchase, what are our options? HIs credit score is great and we would be able to put 20% down to qualify for conventional financing.
hello scott, my name is chris and a filed for chapter 7 and its been discharged already. my house was included in the bankruptcy. and I have not not reaffirmed my mortgage. I however was offered a loan modification to my understanding is not reaffirming my mortgage. anyways my question is this. currently I still live in my home and make my monthly payments. But I want to buy a new house. I heard I have to wait 2 or 3 years before I can buy one. does my house have to go into foreclosure before my 2 year wait starts? can I just pay my mortgage and live here for the 2 years . then stop paying and get a new loan for a different house. lol im not sure I even made sense.
Hi Scott- My husband filed bk in 2010, I filed in 2005. I signed to reaffirm both mortgages but my credit report says bk with 0 balance. My husband signed to reaffirm both but the attorney never filed it his also says bk 0 balance. We have been making payments on time to both mortgages since 2010, 1st is about 540.00/mo and the second is 360.00/mo. We owe about 26,000.00 on the first and 56,000.00 on the second. We have been trying to build our credit and our scores have come up into the low 600 for my husband and high 600 for me, that is only because after yrs of calling I finally got the 1st mortg to report the pymts but they are only reporting them on me. The second will not report. We are on a fixed income. We are still living here in ohio and we are building a house in ky. My husband wants to just stop making payments and leave the house to free up the 900.00 we are paying to these 2 mortg so we can use the money towards the new house. I do not want to do this and have been trying to find a way to not ruin the credit we have built. The housing market is not very good around here to make a profit if we sold the house but we may be able to break even. HELP!! what should we do?? Thanks
My husband and I filed chp 7 in 2010, it was discharged in 2011. We were beginning the process of purchasing a new home until we recently found out that we still own the old house that we put in bankruptcy in 2010. We had someone do some research and they said we did not list our home as an asset. But we surrendered the house and we also got our 2nd mortgage dismissed, so it does show a zero balance. What should we do? Short sale, deed in lieu, or let it foreclose which it has yet to do since 2011. We would then need to wait another 3 years to purchase. We were thinking of another option which was to try to get back into the house and get a loan to pay for repairs that need to be done before moving back into the old house. The loan had been transferred from Chase to Select Portfolio Servicing in April or May of 2013. We are absolutely confused at this point.
In 2007 we filed BK and it was discharged in 2007. We never signed anything to reafirm the loan and up till 3 months ago we lived in the house ( all payments were on time.) We were approved 3 months ago to get a new house. We were going to rent the house out but so far we have not be able to get anyone to rent it. So i guess my question is should we let the house go into forecloser or should we see if we could do a deed to lieu. your advise would greatly be a big help.
I live in WI. I claimed bankruptcy and was discharged in 2010. I had 2 mortgages, 80/20 loan. I have conitnued to pay my 1st mortgage ever since, no late payments, balance is 167k. I stopped paying my 2nd mortgage balance owed is 37k. Would it be stupid if I called the 2nd mortgage and asked if they would take a deal so that balance is paid off if I plan on selling the house? I was thinking of selling the house within the next 2-5 years, not sure yet. Also, on my credit report I show multiple mortgage companies who have held my mortgage, they were sold quite often. Should the Pay status say late 30 days, unknown, or condition as derogatory if they were sold to another company? For the latest one it says it was opened in 2004 is that correct or should it show when it was sold to them? Thanks in advance.
I filed 7 in 2008 and added both mortgages, but kept paying until I recently went through a divorce. I couldn't sell or afford the house, so I am right in the middle of doing a DIL with Carrington Mortgage (the first mortgage lender on my house). They paid off the second mortgage, Green Tree, a few months ago to clear title and do the DIL
We finally got the DIL papers signed and Carrington checked the title one last time... they found the original 2nd mortgage company wars still on the title (the 2nd mtg loan was sold 3 times since the original lender). Here is the part we are having trouble with... It is "Argent", the original lender, who is still on my title and they are no longer in business.
I understand when they sell a loan they have to do an "assignment of mortgage". Green Tree can't find theirs to release the lien... They are working on this. They aren't even on the title though. They bought it from Bank of America, who bought it from Willshire, who bought it from Argent/Ameriprise.
Don't they all have to file these mortgage/lien changes when the loan is sold with the county? Shouldn't there be a record of these turnovers? What in the world can I do to get this done quickly, as Argent, the one on the title no longer exists.
Scott, thank you, I live in the Scottsdale/Phoenix area. I remember when I first started to ask questions and begin the process of learning about what being a "zombie" meant early last year. You answered my many questions about my loan with BofA, my Greentree short sale and finally encouraged me to move forward. You were right, the time goes by quickly and the pain and anguish lessen with the passage of time. I appreciate your help and support. Happy New Year. Tess
Scott, you were very helpful recently with my many questions regarding a short sale. The home sold as a short sale and was recorded in November 2013. Am I correct in that I may qualify for an FHA 3.5% down after one year if I can prove the short sale was due to overwhelming medical bills and a reduction in income due to that? I had a chapter 7 discharge in 2008 and three homes foreclose in 2008. Thank you.
If I filed ch 7 bankruptcy in 2008, and boa never foreclosed, instead they sold the home in july 2013 to everhome, and now I started a deed in lieu this past week, how long do I have to wait to get fha approved? my credit is very good, I have a good job, and on my credit my home shows included in bankruptcy. the only thing that held me back from buying before was because it still showed on public records that I was still the owner of my old home.
Yes, you can def sue Ocwen because you are protected from the bankruptcy. You need to make sure your attorney puts in the lawsuit that Ocwen remove all reporting from your credit report immediately! It took several months but they finally removed it from ours. Don't continue to contact Ocwen, they won't help you directly, they are infamous for this.
The same thing happened to us, only it was 5 years after our home was foreclosed on and our bankruptcy was discharged. Not only did it show up on our credit but the title wasn't taken out of our name for 5 years. We went back to our bk attorney and now we have a lawsuit against the mortgage company that posted it on our credit, it is illegal for them to do that since you are protected by the bankruptcy. The mortgage company is settling out of court! I suggest you get with your bk attorney and see it he will do the same. Good luck.
Hi, We foreclosed on our old home in 2007 and was sold in a sheriff sale in December of 2007. My wife and I filed for chapter 7 and discharged the loan in bankruptcy.. After a year later, I see that its on my credit report. So I called the bank and they tell me the loan was sold to another bank. Ok, fine... I call the other bank and they say that it should be showing up on my credit report. Well, I tell them it is and they say it shouldn't be. So I tell them to please make sure it doesn't show up again after I disputed it. Well, a month later.. BOOM! It showed up... So, what should I do too get this too stop so that when I apply for my new loan, it wont be on my credit report?!
Ok, so the mortgage company finally agreed to do a deed in lieu, but told me the liens have to be taken care of first and that they would pay up to 6000.00 dollars towards the liens on the property as long as I got pay offs from the companies (county lawn care). I did this, and submitted it. My question is if they are willing to pay 6000.00 and the liens are less than 2000.00, do I get the difference? I heard mortgage companies pay the owner to do a deed in lieu rather than go thru foreclosure.
Hi - I have what I feel to be an odd scenario...I think. I discharged my ch. 7 BK in 2009 and included my BOA mortgage in the BK. I already had another home rented and wanted to get rid of this house so I had no problem surrendering the house (way upside down in it). So, in 10/2012 BOA sold my mortgage (even after the debt had been discharged) to Ocwen Loans. Since 10/12, Ocwen has been trying to collect the debt for the house including a ton of interest and also has been reporting it to 4 major credit bureaus as 180 days late. So they've been hammering my credit and trying to collect a debt (illegal) and I'm not even sure that BOA legally could've sold that mortgage to Ocwen to begin with. This is causing ridiculous stress and preventing my credit from repairing. I'm so angry that my attempts to contact my BK lawyer have gone nowhere and I've made several attempts to contact Ocwen including emailing them a copy of my discharge paperwork and have had no results. I think its time to get an attorney and teach one or both of these companies a lesson...I'm real frustrated. What to do next??? Any advice? Think I can sue them?
I filed Chapter 7 bk in april 2007, was discharged in july 2007. I had 1st and 2nd mortgage with Bank of America. I tried to reaffirm the mortgages, but BoA said they dont do that. If you continue to pay we take that as reaffirm. So I continued to pay on time never missed payments on either. Fast forward to 2012 and the 1st mortgage was sold to GreenTree. They changed it to an included in bankruptcy on my credit report. Prior to that, both accounts were showing up as normal mortages that were paid on time. To this day i continue to pay both mortgages on time. I am not upside down in the house. I probably have about 20% equity based on homes being sold in my neighborhood. At this time i want to keep the house but want to know how hard it will be to be put back into a regular mortgage. Credit is great. Close to 700 FICO, never late on anything since BK in 2007. BTW, the first morgtage is at 2.975% and adjusts each year with a cap of 1% adjust each year. It's actually a nice mortgage. And I pay P&I each month. So sometimes i say to myself that i might as well keep the current loan terms... Thoughts on what i shoudl do?
@mikeboth Hi Mike, you're on the right track except that the mortgage you included in the BK, which the home has not yet been foreclosed on, it technically still in default. BK does not mean you don't owe the mortgage, it simply means you cannot be "double hit" on your credit in the event that you should stop making your payments and default in the future.
The criteria of the Back to Work program that you will need to be most concerned with is that 12 months of on-time payments on all of your debts. Since the mortgage is in default now, you would have to cure that. Once the foreclosure is complete (or short sale or deed in lieu), the clock will start ticking on the 12 months of on-time payments, after which you may be eligible.
Hope that helps?
sorry forgot to put this in with first one. If we try to rent the house(dont know if thats a good idea) we could make enough to pay the mortg. with a little extra and keep building our credit. Just not sure if this is a good idea either. The other question I had was How bad would it hurt our credit to just walk away from it since it is already been declared as a bankruptcy and its already been almost 4 yrs for him and almost 8yrs for me . thanks
@khwilliams2014 Yes, it's unfortunately true that you do still own the home, and while the mortgages are discharged, you still have to get the lien removed.
I would definitely try a short sale or deed in lieu as opposed to continuing to wait for the lender to get around to foreclosing. It sounds like you stopped making payments? That will make it very difficult to get a loan to do repairs to the home, unless you can get a personal, unsecured loan.
If you are able to get the lien removed by short sale or deed in lieu, there is an opportunity to buy in as short as 2 years if you have a 20% down payment and a minimum 680 credit score using conventional financing.
FHA requires a minimum 3 year waiting period regardless of foreclosure, short sale or deed in lieu.
Hope this helps?
@yingayang You may want to get a second opinion on the loan approval you received 3 months ago. Because your mortgage was included in the BK, the lender has most likely stopped reporting to the credit bureaus. If you have less than 30% equity in your current home, and if you do not have a 2 year history as a landlord, you would not be able to use the rent payments to offset your expenses, and the lender is required to calculate both payments (current payments, plus proposed payments including taxes and insurance) when qualifying you for the new home.
If you miss any payments on your current mortgage prior to purchasing a new home, you would be ineligible to purchase a new home until this is resolved, and the waiting period is up.
Neither foreclosure or deed in lieu will show up on your credit because the mortgage was included in the bankruptcy. If you have the ability to do a short sale, that is your best option, deed in lieu of foreclosure is the second best option, foreclosure should be the very last option.
Hope this helps?
@megamom6 the pay status of the second mortgage should not be there at all after the bk. Normally it would say mortgage discharged in bk, and the lender stops reporting. What the 2nd mortgage is selling, is the right to foreclose on the home, due to no payment.
Bankruptcy prohibits creditors from "double penalizing" you after bankruptcy by reporting discharged payments as being late. You can dispute inaccurate reporting with the credit bureaus by going to each one online, and submitting a dispute. You may also want to include bk schedules showing debt included in bankruptcy.
If you sell the home, the second will have to be paid so that you do not then have a short sale, which you would put you a minimum 2 to 3 years before you can buy again.
Hope this helps?
@annasmamma what you are referring to is called the "Back to Work, Extenuating Circumstance". Many lenders are not offering this program right now, so it might take some research to find someone that can help. The basic criteria for Back to Work is that you have a minimum 20% decrease of income for a 6 month period, which resulted in the financial hardship that led to the loss of your home.
The documentation process is the biggest challenge that most are having when trying to qualify to buy using this extenuating circumstance.
Congratulations on completing your short sale! Even if you are unable to qualify for Back to Work, the short sale leaves you with a couple of other options for buying again:
Using FHA financing, you can buy in 36 months from the date your name was removed from title. Using conventional financing, you can buy in as soon as 24 months with a minimum 680 credit score and 20% down payment.
What State are you buying in? I can reach out to my network and see if I have a friend in the mortgage business, in your State, that can offer the Back to Work program.
@EK78 you would be eligible for FHA financing in 2 years from the date your name comes off title, the completion of the deed in lieu. To buy using conventional financing, you could be eligible in 2 years with 20% down and a minimum 680 credit score.
Hope this helps?
@jennysue67 you're awesome! Thank you for sharing your experience :)
@jennysue67 great feedback! Thank you so much for sharing your success story with us, I am confident that your experience will help many others in the same situation :)
@JamesJCCrowton Hi James, it is not legal for a creditor to continue to report a debt as being due after it was included in the BK. I recommend that you maybe speak with a Real Estate Attorney and discuss options for requesting that the new "lender" stop reporting.
The challenge here is that the appearance of that debt may impact your credit score. If it is not affecting your scores, and you qualify for a loan, then the lender will not deny you because of something that is erroneously reported on your credit report.
Hope this helps?
@EK78 what you're referring to is cash for keys, which is a program that some lenders will offer. The criteria set on receiving cash-for-keys is usually that you agree to leave the home in good condition. I would ask the lender if they are able to help you with your moving costs in exchange for leaving the home in great condition. It's worth a shot. I seriously doubt that the lender will give you $6,000 and and just let you keep what you don't spend to extinguish liens.
Hope this helps? Good luck!
@johnfs1985 The advice to contact the CFPB is a good move, but will probably not help you with your immediate issue here. BOA can certainly sell the discharged debt to OCWEN, but OCWEN should not be able to report it as delinquent to the credit bureaus.
You may need to consult an attorney about sending a letter to OCWEN about reporting the mortgage as late.
Now, to address the elephant in the room - are you still on title for the home that went from BOA to OCWEN? If you are, you'll want to explore ways to get from under that home. A short sale or deed in lieu would be your best options, foreclosure only as a last resort.
Ocwen is being investigated by the Consumer Financial Protection Bureau for their business practices. You should go to the CFPB website and see if your situation fits the investigation. There is always the chance of a class action suit against Ocwen which has always been a shady operation.
@dogg70 The fact that the mortgage is not reporting on the credit will not affect your ability to qualify for financing. Other than meeting your standard qualifying criteria, once enough time has passed since the discharge, and if your payments on being made on time, the process should be just like applying for any other loan.
The waiting periods you need to be aware of are 2 years if using FHA financing, 4 years if you want to use Conventional financing. With equity, you want to use Conventional.
With all that said, I'm not sure I would touch that ARM loan! 30 year fixed conventional rates are going to be in the high 4%, or low 5% range, and they will continue to increase (my opinion).
I think that if you plan to live out the rest of your days in this home, you might want to seriously consider converting it to a long term fixed. This is based on the fact that rates are increasing, and I am confident that they will continue to increase as the Government is starting to pull back from propping up interest rates.
Hope this helps?
@dimend2459 Thank you for the question! There are many folks out there in similar situations and I get this question often.
I am a lender, so that is my perspective and the basis of my answers to you. I can tell you how each option would affect your ability to qualify for a new home loan.
Since the mortgages are included in your bankruptcy, if you stop making payments and allow the mortgage to go into default, it is not supposed to hit your credit as a derogatory item. I am really surprised that the lender is reporting your payments to your credit report. You may want to speak to an accountant, and maybe your bk attorney to be sure that you did not reaffirm the mortgage when you filed bk in 2005. If your husband included the mortgages in his bankruptcy, but you did not, there is a possibility that you could have your credit negatively affected in the event of a default.
If you keep your payments current, you may be eligible to refinance if you have enough equity and you can meet all other qualifying criteria.
If you simply stop making payments, the loan will default and you will be unable to buy another home until the liens are removed. The liens will be released either by selling the home, or foreclosure. If you allow the bank to take the home through foreclosure, or if you sell but cannot cover the amount owed on both the first and second mortgages, you will have a "waiting period" of anywhere from 3 to 7 years depending on what kind of financing you are trying to qualify for.
There are many ways to approach this, and depending on what you choose, that will directly affect timeline before you are eligible to buy again.
If you can verify that both mortgage were included in both yours and your husband's bankruptcies, then your credit should not be negatively affected regardless of which path you take.
The method by which your name is removed from title would determine when you would be eligible to buy again.
Does that make sense? It's kind of complicated, I know that. If you still have questions, feel free to give me a call on my cell phone at 714-336-8286 and I will try to do a better job of exploring all of the options.
Hope this helps?
when we applied for the loan to get the new house they did calculate the payment on both and we were just fine. that is why we were approved. but in the last 30 days our income has changed my husbands job downsized and it knocked him down to maybe 20 to 25 hours a week and with that happening it has put a struggle on us. So that's why we have to do something with the other house. so you think a short sale or deed in lieu of foreclosure would be best..
@ScottSchang @JamesJCCrowton Hi, Scott. Thanks for replying to my post... The home loan we had was a 80/20 loan. the 80% went to the sheriff sale the 20% was included in bankruptcy because they kept coming for us to redeem payment for the loan, hence why we filed for chapter 7 and discharged the debt. So, do you feel I should contact the bank again and or send them a letter and a copy of my petition of the bankruptcy to them and see what happens before I retain a attorney, which I know will cost allot for attorney fees.
Yes I am still on the title as the owner of the home...I didn't think I had any options after surrendering my home to bankruptcy. At this point the home could maybe short sell for 20k if I was lucky and I discharged 60k. What's the best move here?
@ScottSchang@dogg70 Thanks for the feedback! Helps a lot. We have considered moving closer to my spouses place of employment, but won't plan to do that for 2-3 years when our youngest child starts kindergarten. I thought maybe just stay in this loan until that time and then sell the house. My other question would be can I sell the house normally with a realtor, etc., if I keep the 1st mortgage as-is through GreenTree? Didn;t know if there might be an issue since it shows up as included in bankruptcy on my credit report. Thanks again!
we have not stop making payments on the old house we are up to date on our payments. our new lender is aware of our other loan. when they approved us they quilified us for both house payments. but like i said just our income just changed. So that is why I am asking since we haven't been able to rent it and it is going to be hard now to make both payments. I know you said short sale is our best bet but on that we will still have to keep up on the old house payments right? And i know we will not be able to. so if we do a deed of lieu will that make us lose our new house we are living in now. I guess i am a little confused with all of this.
@ELLEhouse the lender cannot take your new home if you default on your previous home. The only challenge you may encounter is qualifying and timing. You would have to qualify for both payments on both homes, AND you cannot have any late payments on the old home which was included in bankruptcy (if a BK was involved).
It is very common for lenders to "miss" the other loan if it's included in a BK, therefore making your approval for the new home invalid. Unfortunately, this is typically not discovered until far into the escrow process on the new home.
@yingayang Were you asking if they can take the new home you are living in now, IF you fell behind on payments on the old home??? That is what I have a question about also...Was approved and now we are closed and living in the new home. Can't get old home to rent out and are worried about getting the bank to take back the old house. I am pretty sure they can't do anything about the new house we are living in now.
No we haven't missed any payments. And we are already living in the New house. So if he were to fall behind on payments on the first house they can take the new one from us too.
@yingayang short sale will give you the most control over the process for sure. Most lenders may require that you attempt to do a short sale first, and only if you cannot sell the home will they offer a deed in lieu.
Again, I want to stress that if you stopped making payments on the other home, you will not be eligible to buy another home. I just don't want you to short sell this home and then find out that your approval is no good.
@JamesJCCrowton @ScottSchang the only real change to FHA last year that you may be concerned about would be that the mortgage insurance required on all FHA mortgages is now permanent. The only way to remove PMI will be to sell, or refinance the mortgage at a future date. FHA only requires a 3.5% down payment, so it sounds like you have plenty saved up to cover down payment and closing costs.
@ScottSchang @JamesJCCrowton Were thinking of getting a FHA loan since its been only two years.. Can you tell me what changes in the FHA loan has been made this year. I know its allot of hoops to go throught but thats the only loan we can qualify. We have our credit scores in the 700s and have hardly any debt except my student loans. We also have money saved up for 8% down.
PS: We live in Ohio
@JamesJCCrowton @ScottSchang ok, cool - so you're in California? Sounds like you're trying to buy in the near future? We are a direct lender here in California, and recent changes in Fannie Mae Desktop underwriter address this exact situation.
I've got your number, shoot me a text with an "ok" if you're ok speaking to us about expediting this process.
@ScottSchang @JamesJCCrowton Thanks Scott, I disputed the debt on equifax and I have the information that Im going to call and mail them a copy of my discharge papers. As of contacting my bankruptcy attorney, We were not happy with the services with our bankruptcy attorney, so we might seek legal advice somewhere else.
PS: I was the person monday evening that texted you :-)
@JamesJCCrowton @ScottSchang If the first mortgage was foreclosed (sold at sheriff sale) then the 2nd mortgage should have been extinguished. I know that in some cases, a second lien holder will convert the secured 2nd lien into unsecured debt, but that should have been addressed by including it in the BK.
OCWEN seems to be doing some pretty shady stuff with discharged mortgages, as you've read in some of the other posts.
I don't think you would need to spend a lot of money on an attorney, and I would start with your BK attorney that helped you in the first place.
I am unable to help with legal advice.
I guess it makes sense, no one has ever explained any of this to me. It is unfortunate as I've been wasting the last 5 years and the house would've been much easier to sell considering its condition is now deplorable. So what happens to the difference of the amount I short sell and the amount that I owed? I am still not responsible? Also, I assume I'd have to pay the real estate agent which really isn't in my budget unless we are talking less than $500 for a fee.
@johnfs1985 the word "discharge" is a little misleading. The fact is, bankruptcy only protects you against a deficiency judgement or tax liability in the event that you should default on the loan. The loan is not forgiven, you just can't be penalized further due to your bankruptcy.
I would recommend speaking to a short sale specialist (Real Estate agent) in your area to get an idea about your options.
You are ineligible to refinance, or buy until you remove your name from title and you complete the waiting period, depending on what route you take for removing your name from title.
Does this make sense?
@dogg70 @ScottSchang As long as you keep all mortgages current, the BK does not affect your ownership in the home, and therefore your ability to sell, refinance or do anything else you want to do with your property.
The mortgages not showing up on your credit will not impact your ability to sell the home using normal channels.