forclosure after a ch 7 with a twist


Posted by Jean on August 24, 2008 at 15:20:56:

We regretably recently went through a Ch 7 bankruptcy successfully. As part of it, we agreed to surrender our home as part of it as we owed substantially more than we could sell if for in this declining market. Our 1st lienholder opted to be removed from the "stay" and was granted the right to go forward with the foreclosure. The 2nd lienholder however never even responded to the petition, we even attempted a short sale which was approved by bank 1, bank 2 never even responded even though they stood to receive something in the transaction. We contacted bank 2 many times trying to help the situation along but to no avail and they informed us that they were a secured lender and did not need to respond, that they were "automatically" exempt and we have not heard from them since April. Several times they could'nt even find our file, bank 1 did respond though. Now, with the recent measures passed by congress to help people in forclosure, unbelievably, out of the blue, bank #1 contacted us offering us a deal to be able to keep the house instead of foreclosing as they market continues to decline, so do the amount of money they could sell it for and now it has been almost a year since we moved our family with 5 children out into a rental and now they want to try and work it out. We dont know if it is even possible after the bankruptcy, The mortgage will still be more than the house could be sold for in this declining market. We were told that bank 2 loan was "discharged in the ch 7" but I have read much conflicting info on line about this topic. Can a lienholder with a bankrupt loan still foreclose, if they did, they still would not get anything as they are in 2nd place behind bank 1 who wants to work it out with something that works for both us and them. Help!


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