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cfortunato, Attorney
Category: Bankruptcy Law
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Experience:  Bankruptcy professor.
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During filing for federal bankrupsay we did the reaframation

Resolved Question:

During filing for federal bankrupsay we did the reaframation on both our home and car. Wells Fargo did not process it on there end. My question is our home is $40,000 upside down. Since we are not on the hook for the mortage but want to continue to live in our home what are options in getting the bank to absorb the upside difference or should we just give the house back to them
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.
Hi JACustomer,
Mortgage lenders are reluctant to reduce the amount of the mortgage for homeowners. They would rather foreclose and sell the house - often for less than they could have gotten if they had allowed the original homeowners to stay in the house with a reduced mortgage. They are worried that if they so this for some, they will have to do it for everyone.
However, it does make sense to ask your lender to modify or re-finance your mortgage. If they will do neither, you can then decide to allow the lender to foreclose, which will allow you to stay in the house without paying the mortgage until the house finally sells at a foreclosure auction.

I think this is what you wanted to know. If not, please let me know.
Thank you!
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