What is the best course of action with mortgage after filing chapter 7 three plus years ago? 10 Answers as of October 17, 2013

I have a mortgage that was included in chapter 7 bankruptcy. The bankruptcy was discharged and I stayed in the house making payments waiting three years (August 2013) thinking I could get a loan on this or another house. Unfortunately, I cannot get a loan because the house I am in is under pre-foreclosure because it will foreclose if I leave the house. I decided I might as well stop making the payments. It has been 4 months and I decided to look into a short sale. I have found a buyer and plan to work out the details. The perspective buyer has agreed to let me rent the house from him, and will sell the house back to me when I can get a loan. Do you think this is a good idea if I want to keep this house? Any pitfalls of a situation like this? Beneficial HSBC is the bank. They are not secured by Freddie Mac or Fannie May. Beneficial also talked about a deed in lieu of foreclosure. I need a residence to live in and renting seems to be getting more expensive than owning. Thoughts?

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Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
I believe the terms of the short sale prohibits what you wan to do. Have someone look at the documents.
Answer Applies to: California
Replied: 10/17/2013
Charles R. Chesnutt, P.C.
Charles R. Chesnutt, P.C. | Charles R. Chesnutt
If you want to stay in the house, it is best to call the mortgage company and work out a plan to bring the mortgage current. Or find another, cheaper, house that you can buy on assumption without qualifying. Then sell the other house or, if you have discharged the note in a Chapter 7 by giving notice of your Chapter 7 to the mortgage lender and not reaffirming the debt, then you can walk away from it. If you don't do something very soon, you will probably be facing a foreclosure.
Answer Applies to: Texas
Replied: 10/17/2013
Danville Law Group | Scott Jordan
If you want to stay in the home, why did you stop making the monthly mortgage payment? Do you owe more than it is worth? Have you attempted loan modification? What you plan to do will not work if you tell the bank about your plan.
Answer Applies to: California
Replied: 10/15/2013
Stuart P Gelberg
Stuart P Gelberg | Stuart P Gelberg
The short sale with your renting afterwards and then buying it back is FRAUD. Do not do it. Plus, it won't work.
Answer Applies to: New York
Replied: 10/15/2013
Goldsmith & Guymon
Goldsmith & Guymon | Marjorie Guymon
It sounds like a scenario many people are choosing in this market. The bank cannot collect on any deficiency through a short sale due to your bankruptcy. Just make sure the person leasing back to you gives you an option to purchase.
Answer Applies to: Nevada
Replied: 10/14/2013
    William Bidwell, Attorney at Law | Bill Bidwell
    Inquire about a loan modification if you are working, or talk to the lender before resuming payments. The lender may work with you. If that does not work, the short sale is a better alternative than a deed in lieu of foreclosure if the lender agrees to the short sale.
    Answer Applies to: Michigan
    Replied: 10/14/2013
    Janke Legal Consulting | Bruce C. Janke
    It sounds like you have found a creative solution that should work. The only glitch is that the bank has to agree to the price of the short sale. You should probably talk to a real estate broker if you haven't already.
    Answer Applies to: California
    Replied: 10/14/2013
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    No this is not a good idea. It is illegal to do what you discussed. You cannot get any such benefit from a short sale.
    Answer Applies to: California
    Replied: 10/14/2013
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    This idea comes with a lot of risks. You will need an experienced real estate attorney to carefully review the short sale paperwork. Many lenders will agree to a short sale only if the person purchasing agrees that they will not re-sell the property to you.
    Answer Applies to: Nevada
    Replied: 10/14/2013
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    What you are suggesting is illegal as you are not allowed to lease back the house that is being foreclosed upon in NYS. And you will not be able to buy the house back as you will not be able to get title insurance when you try.
    Answer Applies to: New York
    Replied: 10/14/2013
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