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I Filed Bankruptcy Last Year But Now Want Out From Under My Mortgages. – David

“Dear Steve,

I have a 1st mortgage at 7.67% and a second at 12.25% I am not able to refinance because there is no equity in my home at this time plus I had a bankruptsy dicharge a year ago. I also do not qualify for modification because I am and have always been current or ahead in my loan payments. I would like to combine both mortgages under a low fixed rate to include escrow even for a 15 year period as opposed to 30. The problem no one wants to help.

SO my question is how long does it take for mortgage lenders to foreclose on your house if you choose to go into default.

David”

Dear David,

Considering the fact you filed bankruptcy a year ago, you would not be eligible so soon to wrap your remaining debt under a chapter 7 bankruptcy and get a fresh start.

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.

Best case scenario would have been to have included the mortgage default in the bankruptcy when you filed.

Probably the most likely option to break out from under the house would be to go for a short sale with the approval of both lenders where they agree in writing to not go after you for the balance due on the mortgages.

I’d look around locally for a real estate agent that has experience in handling short sale transactions.

Additionally, I would also suggest contacting the mortgage companies directly and talk to them about a principal reduction in your mortgage. In the last quarter, 75% of the mortgage modifications approved by lenders have been from the lenders holding the mortgages directly. You can contact a free HUD Housing Counselor to find out what programs your specific lenders are offering.

You could also click here to find a local bankruptcy attorney and talk to them about filing a chapter 13 bankruptcy and removing the second mortgage from the property. It is possible in many situations to do this.

See also  We Gave Our Home Back in a Strategic Default But Have Some Residual Debt. - Marilyn

Please post your responses and follow-up messages to me on this in the comments section below.

Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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