Posted: Fri Oct 24, 2008 1:31 am Post subject: foreclosure / quit claim
Hi, I'm hoping someone can help answer a question. I live in the state of Washington with my wife. Our home, which I qualified for under my own name, is now in jeopardy of foreclosure. Additionally, my wife signed a quit claim when we first acquired the mortgage. Can someone tell me if the act of my wife declaring bankruptcy will temporarly prevent the sale of the property? If so, do I need to somehow nullify the quit claim that she signed? How would I go about doing that? Thanks much in advance. _________________ Need help choosing the right loan? Get free consultation from community lenders/consultant
As the property and the mortgage is in your name, your wife cannot declare bankruptcy. Moreover if you quitclaim the property in her favor now, the transfer will be considered as a fraud and you can be penalized for it. I would suggest you to go for either a deed-in-lieu foreclosure or a short sale.
I am concerned because you did not mention if you have spoken to the lender to see what workout options that you may qualify for to stop the foreclosure. A bankruptcy or foreclosure on your credit is very damaging and can create difficulties in getting approved for other things in the future.
You need to talk to someone in the Loss Mitigation department of your lender. This rep will have options to discuss with you, of which include a repayment plan, forbearance, loan modification, short sale, etc.
Please let us know if you still have questions and need more help.
@Cliff - We have spoken with the lender and have just finally got in touch with their Loss Mitigation Department (after a SIGNIFICANT amount of runarounds with their collection department). Our lender is Countrywide Mortgage and are a "victim" of their recently exposed predatory lending practices. After speaking with our Attorney General and HUD, they were able to put us into contact with the correct people at CW.
While it does sound like Countrywide is willing to work with us on a Loan Modification, it doesn't sound like they will be able to do it in time to avoid the property being auctioned. This is why we're trying to buy some additional time.
It's sounding more like I'm the one who will need to declare a Chapter 7. This is something that I have been trying to avoid at all costs. While I've had very good credit up until recently, my career is such that this type of filing may have very negative consequences.
Is there anything else you can suggest that might help us keep the house? We are in a position to possibly come up with emergency funding to help rewrite the terms of the loan but time is of the essence - we only have about 30 days remaining until the preverbal doo doo hit s the fan.
You have mentioned that you spoke to the loss mitigation department of Country Wide but they have not responded. You can speak to them once again and check if they will be able to offer an alternative plan or not and ask them to specify the time within which they will help you with the plan.
In case, the alternative payment plan does not work, you may rent away the house and pay the mortgages with that rent. If this option is not possible, you can go for Chapter 13 bankruptcy rather than chapter 7. This will have a low effect on your credit score and you will also be able to save your property.
jerry
