Louisville Short Sale Expert: Helping You Avoid Foreclosure

Posts Tagged ‘Chapter 7’

This is a true story. The greatest fiction writer could not make this up. We will call the homeowner “Sally” for illustration purposes.

• Sally files Chapter 7 bankruptcy.
• Sally includes her $300,000 loan in the bankruptcy and moves out of her Louisville Highlands home.
• Sally never makes another payment.
• Loan officer tells Sally she can get a new loan 3 years after bankruptcy.
• Homeowner waits 3 years and applies for a loan.
• Loan officer tells her she doesn’t qualify because she still owns her house with a $300,000 balance. She still owns it after all these years.
• Sally is confused and calls me.
• I look up her house on public records and, Yup!, it’s still in her name.
• Sally says it can’t be, because she filed bankruptcy.
• I tell Sally that bankruptcy doesn’t convey ownership of the house. She has to (a) sell it, or (b) convey a deed-in-lieu of foreclosure, or (c) the bank has to foreclose on it.
• Sally says her bankruptcy attorney didn’t tell her that, therefore it can’t be.
• Sally comes to my office.
• Surprise! Her lender is Bank of America.
• We call Bank of America.
• Bank of America customer service lady looks up Sally’s loan.
• Customer Service lady says: “I see your last payment was made 3.5 years ago, you now owe $84,000 in back payments. Are you planning to pay this today?”
• Sally manages some niceties and we politely hang up.
• Sally asks me how this can happen, and “Why didn’t anyone explain this to me 3 years ago?”
• I welcome her to the insanity and the inanity of the preforeclosure world.
• Sally calls her loan officer who says she may now have to wait another 3 years after foreclosure or deed-in-lieu to qualify for a loan.
• Sally then tells me what I’ve heard many times before: “Dave, I wish I had met you 3 years ago. I would have done things differently.”

Lessons:

Even if filing bankruptcy, sellers with underwater mortgages should also consult a short sale Realtor. It may save you from foreclosure and bankruptcy.

Submit Your Information Now or Call Us at (502) 664-7827

If you enjoyed this post, you may also enjoy:

• Bank Of America Inflicting Short Sale Losses Upon Itself
• Banks Pushed Short Sales Over The Cliff Into Turbulent Foreclosure Waters
• How Much do Lenders Save by Approving Short Sales?
• HUD/FHA Short Sale: Homeowner Wants to Stay Current, HUD Says “NO! You Must Default!”
• In Foreclosure In Louisville and The Bank Told Me To Do A Short Sale
• Does Any One Know Why The Banks Prefer Foreclosures Over Short Sales?
• Can a Foreclosing Lender Take The Borrower’s IRA or 401(k) in a Short Sale?
• Does Any One Know Why The Banks Prefer Foreclosures Over Short Sales?
• Can the Issuance of the 1099-c be Negotiated with the Short Sale Lender and Does It Matter?
• Why Do Short Sale Lenders Demand Offers 30% Higher Than Market Value?
• Will Increasing the FHA Monthly Mortgage Insurance Cause MORE Foreclosures?

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