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Hello,

I am hoping some of the experienced and knowledgeable people on this forum can answer a few very important questions I have.

My wife and I purchased a home in Michigan in 2005 for 285k. We did an interest only mortgage with 225k on the 1st (Chase) & 60k on the 2nd (BOA).
We are both on the mortgage with me as the primary borrower.

I got buried with credit card debt and filed Chapter 7 BK in 2009.

My wife did not file Chapter 7 and still has excellent credit.

We have made every mortgage payment on time since buying the home 6.5 years ago but are now in a position where we want out of this situation.

If we no longer make any mtg payments on the 1st or 2nd mtg and they foreclose how can we get deal with the possibility of a deficiency judgement.

I already filed and received a discharge back in 2009 so it is my wife that I am concerned about.

Will the 1st mtg company do anything other than foreclose?

I understand the 2nd mtg company will be coming after her to collect.

Will they settle with us for a small amount like less than $3,000?

I have read online that it is pretty common in a short sale. I have no idea if that is accurate with a foreclosure.

Would like to get through this with as little damage to my wife's credit as possible. She does not want BK and probably would not qualify. She has been dedicated to paying off her credit card debt.

Not concerned with obtaining another mortgage in the next 5 years. We will have other housing arrangements such as rent or staying with family.

I would really appreciate any insight or advice from the experts on this forum.

We never intended for things to work out this way but we don't want to work our whole lives for this house that is about $80k upside down.

Thank you very much for your assistance and consideration.

Sincerely,

Rock and a hard place in Michigan

jameshogg · Posted: Wed Jan 11, 2012 10:43 pm Post subject:

Hi Guest,

If the mortgages are included in bankruptcy filing and were not reaffirmed, then none of the lenders will be able to come after you for the deficient balance though he forecloses the property. However, if the property is foreclosed by the lender, it may have a negative affect on your wife's credit and the lender will come after her for the deficient balance resulting from the sale of the property.

Thanks

Posted: Thu Jan 12, 2012 4:55 pm Post subject:

Do you know how likely the 1st and 2nd mtg companies will be to pursue my wife for the deficiency? We live in Michigan. I don't know if banks are taking action on these.

Are they likely to settle for a small payment?

I have heard $1000-3000 mentioned many times but do not know if that is accurate.

We want to move forward with a clean slate and not have to revisit this years from now.

I really appreciate your help.

smithsussane · Posted: Thu Jan 12, 2012 8:55 pm Post subject:

Hi Guest!

Welcome to forums!

The bank has the rights to come after your wife to collect the deficient balance. It will be the bank's discretion whether or not it will settle for a small payment. Your wife will have to negotiate with the bank for the same.

Feel free to ask if you've further queries.

Sussane

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Michigan Foreclosure Question also involves Chapter 7 issue

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