Chapter 7 with no Re-affirmation

[Mountain Mike]

In early 07 I filed ch.7, I kept paying on my house in hopes to be able to afford it. In Sept. 08 I began calling my 1st mortgage company (Homecomings Financial) $254k, to try to get some sort of modification. They said that the loan has not been re-affirmed so they could not help me. I then called my 2nd Mortgage co ( Irwin home equity)$110k, they said the same. In considering to walk away...with a BK on the credit report already I am afraid of the 2nd coming back and demanding. I was barely able to get a straight anwser out of my Atty. of course with out paying him....for him to tell me that "you can walk away and owe nothing". I would surely stay if I had only the 1st mortgage but the 14% second is flat out killing us.
Does anyone have any thoughts on this? Is there a chance that Homecomings will negotiate after forclosure?

[jraawern]

I'm in the same boat, and I'm working the lender every day. I've heard similar claims from my lender GMAC Homecomings as well.

The bankruptcy is discharged! You didn't reaffirm because your attorney advised against it. That's good, because your attorney doesn't want the lender to have the ability to "exploit you" and keep you "on the hook" after a discharge. "Most" attorneys advise against a reaffirmation prior to a discharge.

There is "no law" that says that you that "can't" negotiate after a Chapter 7. I would get aggressive with your fax, phone, and email campaign. Did the Loss-Mitigation Dept. tell you that you can't? I would email javid.jaberi@gmacrfc.com or javid.jaberi@gmacrescap.com as well. I would try these emails first, although, I had my email returned to me over the weekend. Maybe he's inundated -- and not accepting any more personal emails.

The good news is -- you pretty much have them by the "balls" with a post Chapter 7 status. Essentially, you have nothing to lose, except for having to move out. Most lenders don't want an empty house that won't sell for anything in the current economy -- at a sheriff's sale. They're "stupid", if they don't want to keep you in your house with great new terms, such as a rock bottom rate (3%-4%) and/or a principal reduction. The ball is in your court!

However, the key is..."don't" take anything that you don't think you can afford. You are... putting yourself "back on the hook"!

I am confident that I will beat them up during the negotiations. My house won't sell in this market, plus it needs a ton of work (whole new roof,water damage repairs) in excess of $20,000. If they don't work with me -- they're going to be sorry! Like I said I have nothing to lose -- that's my "wild card". I could easily start over, and rent a brand new house for hundreds less per month -- and no liability for repairs/maintenance.Honestly, my first priority is to keep my home for sentimental reasons and the prospects of building equity in the future -- that you can't get renting. Plus the tax shelter.

I will keep you updated on my progress, and I will see if I can get you more pertinent contacts.

[Mountain Mike]

I am wondering what happens to the Second Mortgage of 120k to Irwin home equity. Will the Second fall off after forclosure and the 1st become the sole owner? If the 2nd falls off it seems that my first would be a little easier to negotiate...although it is probably not likely that the lender will work with someone who has gone through a bk and is now trying to get out. Hopefully they will work with us....If i could get things down to about 1500.00- 2000.00 a month it would be compfortable....3500.00 is just not manageable.