Facing Foreclosure and Chapter 7?

Question:

I have recieved the discharge on the chapter 7, and I talked to the attorney's from my mortgage company and they are telling me that on 4/16/07 they recorded the notice of default. That I have 90 days to reinstate or pay off the loan..My question is can I still do a short sale on the property? and if the short sale is done what will happen to the 2nd mortgage? I haven't received anything from them yet. It was also included on the chapter 7...

Answer:
There are some details of your situation that are unclear. What is the value of your home relative to the first and second mortgages? That is the crucial question in any short sale scenario as the mortgage company must approve a short sale. They will not approve a short sale if they believe that they can sell the home after foreclosure and receive 100% of the amount owed.

You say that the second was included in the bankruptcy. You should talk to your bankruptcy attorney about whether the loan can be "crammed down." Meaning that the lien is reduced to the value of the house. You cannot do this with a first, but I believe that you still can with a second where the lender is undersecured.

Best of luck.

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Demetria Haller

Facing Foreclosure and Chapter 7?

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