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WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 17208
Experience:  14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
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If you file a bk and yet continue to live in your home (and

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If you file a bk and yet continue to live in your home (and pay your monthly mortgage payment) what is the status of your loan/mortgage? The bank takes the payment but doesn't recognize our account as valid and says we do not have a mortgage through them. Is this correct? What can we do? Also, since the house is still underwater can we just walk away? If so is that considered a foreclosure or not since the bk was 3 years ago? Very confused....please help.

WALLSTREETESQ :

Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarificati on.

WALLSTREETESQ :

This is a common situation,

WALLSTREETESQ :

The loan is discharged and you would not be leiable,

WALLSTREETESQ :

liable,

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The bank can continue to accept your payment, however they cannot sue you if you walk away and leave,

WALLSTREETESQ :

The loan is still secured on the home, and in most cases the home would still be in your name,

WALLSTREETESQ :

It would not be a foreclosure, it would appear as a discharged debt on your credit, since your name will still be on the loan, you can sell it, and pay off the lenders lien, and own the home if you wish as well.

WALLSTREETESQ :

Only after a foreclosure, will your name be off the deed,

Customer: Why do they not recognize us as a customer? Can they be forced to report the positive payment history since the bk was filed? Once again, if I walk away is it or is it not a foreclosure?
Customer: You mention it would not be a foreclosure yet you say my name would only be oof the deed if it was a foreclosure....so if I walk away what happens?
WALLSTREETESQ :

Since the loan is discharged, they do not have to report the payments,

WALLSTREETESQ :

If you walk away, the lender would have to foreclose on you,

WALLSTREETESQ :

so it could appear after you walk away,

WALLSTREETESQ :

As of now, your name would still be on the deed,

WALLSTREETESQ :

if you walk away, the lender would have to foreclose, and obtain the deed,

WALLSTREETESQ :

You can contact the lender and deed them the home, this way you avoid a foreclosure,

WALLSTREETESQ :

however, even if their is a foreclosure, you would not be liable for the debt.

Customer: So if I walk away now I will have a current foreclosure on my record which would further destroy my credit and inhibit me from acquiring another home loan for several years?
WALLSTREETESQ :

It is possible, however in cases like yours, you can avoid a foreclosure,

WALLSTREETESQ :

by deeding the property to the lender through a deed in lieu,

WALLSTREETESQ :

if you do this the lender does not have to foreclose to obtain title.

Customer: Does this negatively effect my ability to acquire another home loan? Should this be done with the assistance of an attorney?
WALLSTREETESQ :

It should not hurt you getting a new loan,

WALLSTREETESQ :

since it has been three years since your bankruptcy, your credit should be improved by now,

WALLSTREETESQ :

If you deed the property to the lender, your credit would not be hurt.

Customer: Thank you.
WALLSTREETESQ :

You can do this by yourself, you would contact the lender and in most cases they will send you the forms to do this.

WALLSTREETESQ :

If you have any further questions please do not hesitate to ask.

WALLSTREETESQ :

If satisfied please provide us with positive feedback so we can receive credit.

WALLSTREETESQ and 2 other Bankruptcy Law Specialists are ready to help you