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  1. #1
    Join Date
    Jan 2011
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    4

    Default Foreclosure Threat - Debt on House Was Discharged in Bankruptcy

    My question involves a foreclosure in the State of: Washington

    I was granted a Home Modification in June. The payment went down from about $2500 to about $1500. The next month (July) I filed for Bankruptcy. I did not re-affirm the mortgage. I continued paying the mortgage payment even though the debt was discharged. Then I could not make December's payment and also January's.

    I received a notice of Default on January 5 which notified me that if I do not cure the default by 2/5/2011 "may result in the acceleration of all sums due under the Security Instrument".

    What is the timeline for me to have to leave the house, assuming I do not make any more payments? Somewhere it mentions "the first date of default".

    I don't know what having the mortgage discharged means to my situation. I called the mortgage company (Citi) and someone there said I was not responsible for the debt (?) but that I could continue to make the payments and keep the house.

    How long do I have to get out of the house assuming I can't or don't want to make further payments? Does it matter that this debt was discharged (i.e. could they make me move sooner than if it had not been discharged)?

    Can I get my payments back that were made both during the bankruptcy or payments made after the discharge in the bankruptcy, if the debt was discharged?

    I called and they offered to allow me to make larger payments over the next 6 months to make up the deficiency-irrelevant if I decide to leave anyway.

    I don't know if my situation is common. I just want to know my options.

    Thanks in advance, Fred

  2. #2
    Join Date
    Sep 2010
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    9,485

    Default Re: Foreclosure Threat - Debt on House Was Discharged in Bankruptcy

    The mortgage discharge just means you aren't responsible for it, it doesn't mean the loan evaporated. The security is still there and the bankruptcy doesn't have any affect on foreclosures other than a temporary stay while things are being sorted out.

    How fast the bank starts foreclosure is really up to them. The foreclosure tends to run 180 days or so at the earliest from the time it is initiated. You can booted out about twenty days after that.

  3. #3
    Join Date
    Jan 2011
    Posts
    4

    Default Re: Foreclosure Threat - Debt on House Was Discharged in Bankruptcy

    I am new to foreclosure and I don't know what to expect.

    About this reaffirmation. I assume that the bank would want me to reaffirm the loan. What does it mean that I did not reaffirm this loan in my bankruptcy, if anything? Before I missed the December payment (and 2 months after the discharge in the bankruptcy) the mortgage holder said the only thing that me not reaffirming the loan does is that it prevents me from logging into their website. I would have thought that it means more than that.

    I was thinking that someone made a mistake in not making me reaffirm the loan (and to be honest, I thought I had reaffirmed). Do they really think that me not being able to log into their website is incentive enough for me to reaffirm the loan? It would be really nice if I didn't get a foreclosure remark on my credit report.

    How will I know that these foreclosure proceedings have started?

    I assume they don't start posting "Forclosure" signs in my front yard until after the 180 days?

    Thanks again...

  4. #4
    Join Date
    Sep 2010
    Posts
    9,485

    Default Re: Foreclosure Threat - Debt on House Was Discharged in Bankruptcy

    Affirmation means that you accept responsibility for the loan. It means they might have other recourse against you beyond foreclosure.

    Discharged or not, reaffirmed or not, they are free to foreclose if you default on the loan.
    Your credit isn't going to be any more trashed than it already is.

  5. #5
    Join Date
    Jan 2011
    Posts
    4

    Default Re: Foreclosure Threat - Debt on House Was Discharged in Bankruptcy

    About the timeline (I want to be sure that I know how long I have to live in the house before the boot).

    I missed my December 1, 2010 payment. I guess the default occured on December 2?

    I missed my January 1, 2011 payment. I received a notice of default letter around January 5, 2011.

    The letter says I can make a payment of about $3500 by Feb 2, 2011 to be back on track.

    Assuming I do not pay by Feb 5, how much time do I have?

    Some sites say that I have as little as 190 days from the date of the first missed payment (Dec 2?).

    It is now January 17, and according to the above, I have roughly 145 days until the 20 day notice to move out.

    I also read someplace else that I have 180 days from the time that the initial forclosure proceedings have started. Were these proceedings started back in December (Dec 1 =the first missed payment) or in the future sometime (forclosure proceedings)? At what point do I have 180 days to move out?

  6. #6
    Join Date
    Sep 2010
    Posts
    9,485

    Default Re: Foreclosure Threat - Debt on House Was Discharged in Bankruptcy

    Here's the best info I can find on the process in your state:
    http://www.atg.wa.gov/uploadedFiles/...etimelines.pdf

    Yes your interpretation seems to be correct.

  7. #7
    Join Date
    Jan 2011
    Posts
    4

    Default Re: Foreclosure Threat - Debt on House Was Discharged in Bankruptcy

    I was sort of afraid of being correct about that.

    Well, if I decide that I have to leave, at least I have at least a few months.

    I wonder if/when they will put a sign in front of my house...


    Thanks again...I will keep everyone informed about my situation.

  8. #8
    Join Date
    Sep 2010
    Posts
    9,485

    Default Re: Foreclosure Threat - Debt on House Was Discharged in Bankruptcy

    They may post you... RCW 61.24.040 has the publication/notification requirements.
    (e) Cause a copy of the notice of sale described in (f) of this subsection to be posted in a conspicuous place on the property, or in lieu of posting, cause a copy of said notice to be served upon any occupant of the property;

  9. #9

    Default Re: Foreclosure Threat - Debt on House Was Discharged in Bankruptcy

    From the time you get a Notice of Trustee Sale they can not put your house up for auction for 90 days. So you have 3 months from that point. It sounds like they have only given you a notice of default so you have a minimum of 3 months yet.

    They can't post any kind of foreclosure/for sale signs in your yard until you are gone. They will post the Notice of Trustee Sale on your front door or somewhere that's obvious for you to get.

    That being said the average time from the initial default until people have to be out of their house is something like 460 days at the moment. The banks are so backed up with foreclosures they just can't get to them fast enough. My job is straight commission and the first half of 2010 I made almost zero. I haven't made a payment at all in 2010 and I have yet to get a Notice of Trustee Sale. I've called to work out a loan mod about 2 months ago and have yet to receive the information they were supposed to send me in the mail.

    Be ready to move withing 3 months after you get that Notice of Trustee sale. Until then if you think you're going to get foreclosed on anyway then why throw money away at it unless you really want to try to keep the house.

    As for your credit the Foreclosure will be another ding on your credit. With just the BK you can purchase another house in 2 years. With the Foreclosure you'll have to wait an additional year. That however doesn't mean you can't buy a house with a seller carried contract or on a lease option. You just wont be able to get bank financing.

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