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After rejecting a loan modification, moving out of our house,

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and getting a job in...
After rejecting a loan modification, moving out of our house, and getting a job in another state, the mortgage company said the only thing holding back our offer of a Deed In Lieu was the Mortgage Insurance Company. After negotiating with them they said the best they would offer was $15,000 paid over time. We countered, but they haven't changed their offer and it looks like we're headed to foreclosure. SHOULD WE ACCEPT THE OFFER or run the risk of worse financial damage in forclusre? (our home is in WV) THANKS.
Submitted: 8 years ago.Category: Real Estate Law
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6/15/2010
Real Estate Lawyer: Ellen, Lawyer replied 8 years ago
Ellen
Ellen, Lawyer
Category: Real Estate Law
Satisfied Customers: 36,715
Experience: 25 years of experience helping people like you.
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Hello,

 

I am the JustAnswer expert that will be helping you today. I am a lawyer with 25 years experience. Although I am not your attorney, I hope that I can give you helpful legal information.

 

Can you tell me whether you have other assets and total household income

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Customer reply replied 8 years ago

Other assets include one 5 year old vehicle that is paid off, an IRA with about $3000 in it, and a whole life insurance policy that has a few hundred dollars equity.

 

Our household income (I finally have a job again) this year will be around $60,000.


Our budget (which has been tweaked considerably) is falling about $100/mo short right now. The MI company's offer would be around $85/month for a decade or so.

Real Estate Lawyer: Ellen, Lawyer replied 8 years ago

Hello,

 

You may want to consider a chapter 7 bankruptcy. I will explain.

 

A Chapter 7 bankruptcy could discharge (erase) all of your unsecured debt such as credit cards, judgments and personal loans. It would be an opportunity for a fresh financial start. However, you may have to surrender assets, if any, that exceed your exemption.

Here are the exemptions for West Virginia:

http://www.bankruptcyinformation.com/wv_exemp.htm

 

 

Best wishes for a successful outcome. If you have additional questions, please do not hesitate to submit them to me directly.

 

Thank you,

FLAandNYLAWYER

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Customer reply replied 8 years ago

Maybe my previous reply did not come through.

I don't think you understood the question, so I will add detail and rephrase.

Question: What is the risk of my home going into foreclosure? What is the probability that I will have any financial obligations should that happen?

 

Other than my house, we are current with all our obligations. While we are falling short of our budget, our budget included the average of our medical and dental costs (averaged for the past two years and included in our monthly budget). If we stay healthy we are fine, if not we are about $100 per month short. SOOOOO, the Mortgage Insurance Company offered to let us do the Deed in Leiu of Foreclosure, but we'd have to pay them $15,000 (or $83/mo for 15 years). I can't and don't want to do that; however, if that is likely to be less than the cost of a foreclosure, it would make sense to do it. With that clarification, please refer back to my question. THANKS!

Real Estate Lawyer: Ellen, Lawyer replied 8 years ago

Hello,

 

Thank You for clarification.

 

When a property is foreclosed in West Virginia, a judgment can be entered by the court for any amount of the loan that remains unpaid. This is called a deficiency judgment. The deficiency judgment can be used to execute on other property held by the borrower. This is why I suggested the chapter 7 bankruptcy as it would eliminate the deficiency and/or the remaining debt you were to do if you do a deed in lieu of foreclosure

 

 

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