Short sale after bankruptcy 1st & 2nd mortgage - help!

We files for bankruptcy - thinking we would stay in our home afterwards.
Discharge was in Dec 2007. - we claimed to re-affirm our house. Our income is too low to make our payments (w/o making up what we are behind).
We have a 1st mortgage through Countrywide for $116k and a 2nd through HSBC for $30k.
No forclosure notice- but default letters are coming in, now that bankruptcy has been discharged.
We have listed the home with a realtor who is not experienced in short sales, at $122k.
An offer was submitted for $125k plus $7500 in closing costs paid by buyer.
Is it realistic to expect both mortgage companies to agreee to this? :deal
Will the 2nd mortgage company put a judgement against us?
We wanted to to in deed of leu - but they would not consider that till the house was listed for 90 days at FMV. With so many forclosures around us - I do not know what FMV is?? :banghead
With the bankruptcy so recent - do we have any protection against judgement or taxes owed when we leave?
We just want to walk away “clean” - is forclosure the way out? :shocked
We do not have any money to pay closing costs, attourney or judgements - we will be lucky to scrap up enough to get into a rental after our credit is scrapped.
Any advice from someone who is familar with all the in’s and outs welcome .

Did you use an attorney for your bankruptcy? The question about judgements against you depends on the terms of your bankruptcy. Normally, you are allowed to stay in the house if you can pay, which should have been established while you were doing your bankruptcy.

Short sale is a good plan to prevent a foreclosure from appearing on your credit. However, you already have a bankruptcy that will stay for a few years on your credit anyway.

You should shop around for a realtor that is experienced with short sale. Whether the lenders will agree to the amount depends on many factors - all of which an experienced ss realtor can handle.

2007-2009: IRS will not require you to pay taxes on debt forgiven due to a refinance, short sale or foreclosure.

Start looking for another place to live. If you stay in the home as long as possible, the asset manager who ends up with the property as an REO can pay you up to $1,500 to vacate and save them from evicting. Until that time, you don’t pay rent or a mortgage. But as deer said, check the finner points of your bankruptcy and make sure there was not a move out date made by the courts.

GooD Luck! :beer

We have listed the house with sister in law who is new to real estate :rolleyes but she is under the advisement of her broker. I have NO idea if he is good at short sales or even been a broker for long.
We filed for bankruptcy without a lawyer - originally thought we could afford the house. We listed the debt as secured and to re-affirm. We have made ONE payment to each mortgage company (in Oct.) since the meeting of the creditors (which none showed up at). We also had a car that we were going to re-affirm. When the papers showed up to re-affirm, we voluntarily turned over the car.
We have another offer for $126k, but are we alllowed to submit other higher offers if one is already submitted? I heard something about multiple offers not being allowed???
I want to still show the home in hopes of getting closer to what we owe.
Do the mortgage companies work together s that the 2nd will get “some” money?
I SO wish I had stuck to price of $144k and negotiated from there, but they said we wouldn’t get any showings or offers at that price with todays market.
PS- we were told to make the house look bad for the bank appraisal - this is a 2001 home, how are we supposed to do that??

Yes, submit all offers you get. Multiple offers are ok to send to lenders!

It’s GREAT that you are making the home available to inspection by buyers. Continue to accomodate them, but make sure to point out all the flaws, repairs needed, etc. (Just so there are no suprise expenses for the new buyer).

The first mortgage does not care about giving the 2nd anything. Your broker must show all offers to the 2nd, so that they can see that they will really get nothing if the house does not sell for enough. Broker should offer something like $1000 to the 2nd.

Get that broker opinon (the one that said that you won’t be able to sell the property for $144K in today’s market) IN WRITING with comps as back up and send all that to your lender.

Make the house look bad? Just get a handyman/inspector to come out and do a free estimate for repairs. Get a price for every little tiny possible repair you can think of - including - steam cleaning, broken or or old appliances, etc. Include that repair quote in your package to the lender. You may also put off picking up the clutter and cook fish in the house just before the appraisal! :smile

I understand from my short sell that I will not get a 1099 for the difference because it was my primary residence. Investment property is different, but you have to have an experienced realtor and they have to have attorney’s and it’s not pretty. We did rent a lovely place but the property mgt company doubled our deposit. Seek professional advice you will survive better off after the experience is over. Signed: survived just fine (Chase)

Don’t count on the bank taking only $1000 of a 30K note when they are in second.

i am also agree with you. he is seems to be in tight position

He should have move a long time ago. I was told the first of the year that Onewest bank will be keeping a in house database of clients that take a loan out and they will check it against anyone applying for a loan to see if you ever default on a loan with their bank.

yes your credit rating is checked before the issuance of new loan, if your rating is good than you easily get appraisal or mortgage loan otherwise you have to face difficulty. you know seven c’s of credit? their decision to give loan base on them!