Options For Refinancing Home Post Bankruptcy - Not Reaffirmed / Stay And Pay

#1
We had the mortgage discharged in BK in 2009 and continue to pay. Loan is with Seterus.

Our discharged loan is upside down.

At this point there have been some positive income changes for us and the topic of moving or putting a second floor / dormer have come up.

Question is if there are refinancing options that we can explore in order to get funding form the remodel?
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
#2
Hi Housebroken13,
We have a vast array of renovation products available for you, it's actually something we specialize in. Because you included your home in bankruptcy will not prevent you from doing a new loan outside of a few institutions. As long as you meet the payment history requirements for the program being sought you will be fine. What you will no longer have is bankruptcy protection. My guess is that your home loan is no longer reporting on your credit, that will change upon doing the refinance/renovation home loan product.

Depending on your credit score would also determine what products is best suited for your situation.

I have written about a few different renovation home loans here on LoanSafe. What you may fall into also is a construction product if you're looking to put a 2nd floor on the property. That is also something we offer and what we determine is that you will qualify for a conventional/government or jumbo loan option once the construction is complete.

If you're going to sell the property and move into a new location there are different tips and tricks on how to best accomplish that goal.

Feel free to reach out to us at: 800-779-4547 or [email protected] and I can guide you through which options are best.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
#4
You shouldn't have any problem selling it and collecting the proceeds from the sale if you have remained current on the home since the time of the BK. If you're actively delinquent that may cause an issue.
 

indeep1959

LoanSafe Member
#5
What if I stop paying and stay as long as possible and bank the payments? It would be the same I think. I have maybe 30k equity, but I can easily make that up as my mortgage is almost 3k per month and houses are not selling well here. I'd rather sell but very pessimistic on that happening. I break even if I lower my price unfortunately to try and unload this place faster.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
#6
That's some thing that I personally can't answer due to my licensing however if you foreclose, I have a loan product starting at 15% down the day after foreclosure. The negative equity in the property is going to be a tough hurdle unless you have a loan originated prior to May31st, 2009 under the Fannie/Freddie realm for HARP.
 

indeep1959

LoanSafe Member
#7
Seems like I get different answers every time.
I thought it didn't matter when you foreclose IF the mortgage was discharged in a bk7 in order to get a conventional loan?
I know the FHA however, goes by the foreclosure date correct?
And why would the neg equity matter if I let a bk7 discharged loan go to foreclosure? They can't come after me for it.

I'm looking to get out of this place asap, trying to sell it the right way, but I can't wait forever, throwing money away at a non appreciating asset.
I need to move on to the next, more affordable place asap, hence these questions.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
#8
That is correct, as long as you meet the bankruptcy timeframes for conventional with prop included you very well could purchase once the deed is transferred out of your name. I do multiple transactions like that every month, many for our members here on LoanSafe.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
#10
Exactly, you have to wait until the deed has been officially transferred out of your name.