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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 19134
Experience:  B.A.; M.B.A.; J.D.
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We have a home that is approximately $220,000 in value- professional

Customer Question

We have a home that is approximately $220,000 in value- professional appraisal completed. ( Our 1st mortgage is $232,000) In 2006, we moved due to a new job that I accepted and the lender provided us with both the 1st mortgage on the new home, a bridge loan on the current home, and a small equity loan on the new property. The old home had been appraised at approx. $550,000 at that time. The home had not sold. 5 months after moving, the company made enormous cuts and I lost my job. We hired an attorney and paid him up front to help us since we now had two properties and could not afford the payments. We found out late from an outside attorney that our attorney had not filed any motions and we lost our new home. We live in the original home and negotiated with the bank and have a regular mortgage. Due to the attorney not performing what was agreed upon, our lender changed the terms to a 10 year fully amortizing loan at 5%. Originally, it was to be a 15 year, 3.5% for 5 years and then 5% for remaining 10 years. We still have the bridge loan lien of $250,000 that we are attempting to have released. We ended up having to file Chapter 7 bankrupcy. We did not qualify for the 13 due to too low of income. Our bankrupcy attorney did file a motion prior to the finalization of the bankrupcy to erase the bridge lien, but the judge denied it-telling our attorney to file a 13 instead. We could not and then the 7 was finalized in July 2011. We have still not received any re-affirmation documents from either lender. I have asked the 1st mortgage lender. The bridge loan lender sent us a statement showing -$0 - being owed. I have been calling and e-mailing them constantly requesting the release deed. I was told on numerous occasions that they would be sending it to the county. Nothing has been done yet. We cannot afford a $500,000 loan and may need to leave if we cannot obtain the release deed. (We have owned this home for 13 years.) Is there any advice or help you can give that would help us. Our loans were originally given by LaSalle bank in Chicago and then Bank of America took over- which is where it is now.
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.

Hi JACustomer,

Why are you still paying the mortgage for the new home - the one you no longer live in? (Wasn't it discharged in your Bankruptcy?)

Customer: replied 5 years ago.

Good Morning,

 

We are no longer paying on the new home. We are only paying on the first mortgage of the home that we are living in. We are trying to eliminate the 2nd lien on the home that we are living in. The debt has been discharged, but the lien is still in place. So, even after we pay off the 1st, the 2nd will have the $250,000 lien. We cannot afford to pay the 2nd and have attempted to work with them this entire time to negotiate a reasonable payment and loan amount based on the current market value. Nothing has come of this.

Expert:  cfortunato replied 5 years ago.

You said you could not file a Chapter 13 because your income was too low. There is no minimum income for filing a Chapter 13. The only requirement is that there be a steady source of income, and you must have a steady source of income if you are current on your first mortgage.

Do you have a steady source of income?

Customer: replied 5 years ago.
My husband is currently employed. We were told that based on our income vs outstanding obligations, we could not qualify for the 13 due to the 1st mortgage taking up over 60% of our income. Also, the 1st home had been taken by the bank, but there was a 2nd on that home that we were still being asked to pay and we could not. There was approx. $500,000 in debt - not including the 1st mortgage on our current home- $232,000.
Expert:  Phillips Esq. replied 5 years ago.
Thank you for giving me the opportunity to assist you. I encourage you to ask me for clarification, if you are not clear with my Answer.



Question
: We have a home that is approximately $220,000 in value- professional appraisal completed. ( Our 1st mortgage is $232,000) In 2006, we moved due to a new job that I accepted and the lender provided us with both the 1st mortgage on the new home, a bridge loan on the current home, and a small equity loan on the new property. The old home had been appraised at approx. $550,000 at that time. The home had not sold. 5 months after moving, the company made enormous cuts and I lost my job. We hired an attorney and paid him up front to help us since we now had two properties and could not afford the payments. We found out late from an outside attorney that our attorney had not filed any motions and we lost our new home. We live in the original home and negotiated with the bank and have a regular mortgage. Due to the attorney not performing what was agreed upon, our lender changed the terms to a 10 year fully amortizing loan at 5%. Originally, it was to be a 15 year, 3.5% for 5 years and then 5% for remaining 10 years. We still have the bridge loan lien of $250,000 that we are attempting to have released. We ended up having to file Chapter 7 bankrupcy. We did not qualify for the 13 due to too low of income. Our bankrupcy attorney did file a motion prior to the finalization of the bankrupcy to erase the bridge lien, but the judge denied it-telling our attorney to file a 13 instead. We could not and then the 7 was finalized in July 2011. We have still not received any re-affirmation documents from either lender. I have asked the 1st mortgage lender. The bridge loan lender sent us a statement showing -$0 - being owed. I have been calling and e-mailing them constantly requesting the release deed. I was told on numerous occasions that they would be sending it to the county. Nothing has been done yet. We cannot afford a $500,000 loan and may need to leave if we cannot obtain the release deed. (We have owned this home for 13 years.) Is there any advice or help you can give that would help us. Our loans were originally given by LaSalle bank in Chicago and then Bank of America took over- which is where it is now.

Response: Unfortunately, the lender is not under any obligation to send you a satisfaction of mortgage for the lien (release of lien) since the Judge denied your Motion to avoid the lien. The lien remains on your property until it is paid off. However, you are no longer personally responsible for the lien since you were granted a Discharge Order in your Chapter 7 and you did not reaffirm the loan. Your personal obligation on the Note was wiped out with your Discharge Order.

Do not sign any Reaffirmation Agreement for the loans. Reaffirmation nullifies the benefits of your bankruptcy filing and makes you liable for the loan. Without reaffirmation, the lenders cannot come after you for any deficiency after foreclosure of your property. With reaffirmation, the lender can come after you for deficiency after foreclosure. So, not having received the reaffirmation documents is in your best interests.

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