@MyFico_704 wrote:
We are 4 years post CH 7, all 3 mortgages discharged. Been current on the 1st ONLY... 2nd and 3rd we have not been paying. No eviction notices or foreclosure letter from the bank (all 3 with WF).
Mortgage balances -
1st - 170k --- (current)
2nd - 45k --- ( Not including 4 years interest + late fees)
3rd - 38k. --- ( Not including 4 years interest + late fees)
Since the Charlotte NC housing market has recovered significantly we want to sell our home! Homes in the area are selling for mid 300k. I think if we sell our home via a traditional sale... hope to walk away with some cash proceeds.
Question -
1 - Can we sell on our own without getting bank approval? Since there is value... I would imagine YES. IF the house is underwater then I realize it would be short sale.
2 - IF there is "excess" - that $$$ is ours to keep correct? Creditors can ONLY keep/get paid what they are owed.. .balance PLUS any interest and fees.
Earlier - I spoke with a loan officer (who went through CH7 himself) and he said since I filed CH7.. and the bank wiped out my debt.. I CANNOT SELL the house since I am no longer the legal owner.
I told him he was wrong!
Can someone with knowledge and/or personal experience shed some light on this?
Thank you.
Man, that's the most misinformed loan officer I've ever heard of - of course you are the legal owner, you have been since you signed the closing papers. You just don't own it free & clear, you own it subject to the liens of the 1st through 3rd mortgages. You are free to sell it, subject to your paying off those mortgages to the satisfaction of WF so that you can deliver a clear title to the buyer with WF releasing those liens. The 1st mortgage will be straight forward, WF has been crediting your payments lowering the balance with the amount of principal included in each payment. The tricky part will be how much WF will want as a payoff balance to release those 2nd & 3rd mortgages. You'll need to negotiate with them on how much they will accept to release those liens. The might be sticklers and want to pad the balances with 4 years unpaid interest and fees. On the other hand they may be reasonable - those 2nd & 3rd mortages have been non-performing loans for 4 years and they might be motivated to accept an amount less than their book value to clear them off their books.
I suggest you start by talking to a realtor to get a firm idea what your house would sell for (not listing price, what price they would expect it to sell for). Then start negotiating with WF, telling them your considering putting your house on the market IF it can sell for enough to settle all 3 mortgages, and want to know what they would accept as payment in full for all 3 mortgages. If they come back with large amounts on the 2nd & 3rd, remind them the alternative is for you to walk away. The last thing they want to to is foreclose, foreclosures sell for low prices in auction and they would likely take a loss, and since the debt was discharged in BK they can't come after you for any deficiency. . And yes, if you can sell the house for more than WF will accept as payment in full, that's your $$$ to keep.
