Expert: Terry Leeders - 6/19/2007

Question
Our bankruptcy was discharged in January and situations with my husband's job made us fall behind on our mortgage. We reaffirmed our mortgage loan, but now we want to get rid of the house. Can we go back and change our minds about surrendering the house so late in the game? We do have our house up for sale and the mortgage company has allowed us to have a forebearance agreement to postpone the foreclosure as long as we make good on the payment arrangement. We are trying to stay out of foreclosure, and do not expect any profit from the house. It's just not selling fast enough to get us out of this bind. Do most mortgage companies allow a lower pay-off amount to aid in selling the house faster? We just want to put all of this behind us and start moving forward again! Thanks!

Answer
Hi Candi,
A reaffirmation can be rescinded for 60 days after it is filed
with the court, or the date of the bankruptcy discharge, whichever is later.
Many companies will accept a short sale (lesser amount) to facilitate the deal.  You cannot make any profit though in that case.  Talk to your real estate attorney to work that out for you.  Worst case scenario, you can talk to the mortgage company to see if they would do a deed in lieu of foreclosure, as you can sometimes, just sign the house back over to them.  Best of luck.
Terry Leeders