Can somebody help us understand what our options are?

In August 2007 my wife and I moved from Las Vegas to Charlotte, NC for a new Job. We bought the house we are currently living in and put our Las Vegas house on the Market. By September of 2007 the recession hit and we were unable to sell our house in Las Vegas. In a matter of a few months several other houses on our street in Las Vegas went into foreclosure. For two years, we both worked three jobs and did every thing we could to do the right thing and pay both mortgages, but finally came to the conclusion that our life savings was drained and we were no longer able to pay both mortgages. My wife bought the Las Vegas house for 250K and it appraised for $350K in May of 2007. But by May of 2008 the tax value was 75K. Everyone advised us that the market would bounce back and it never did. By 2009 we finally decided we could not live like this; working seven days a week to make both mortgage payments. We had postponed our marriage for two and half years because of the two mortgages. So we decided to file for Bankruptcy, chapter 7. Since both houses are solely in my wife's name she qualified for chapter 7. We went through the process and she was discharged of the all debt of the two houses.Our current loan that we have on the Charlotte house is structured as follows:The first Mortgage: with Citi Mortgage, the balance is approximately 187,000. The monthly bill is $1,623. We have a 6.5 % interest rate.The second Mortgage: with Sun Trust, the balance is approximately 22,000. The monthly bill is $200. We have an interest rate of 8.9 %. We just received a notice from Mecklenburg County that our property value has gone up and that we will have to pay and additional $100 dollars per month at the first of the year. Thats over $1800 dollars in monthly mortgage payments.Our original plan was to move to Charlotte and sell our Las Vegas house and have enough equity to refinance this loan. THE BANKRUPTCY ON AUGUST 5, 2009, WE RECEIVED OUR COURT LETTER STATING THAT SHE HAD BEEN DISCHARGED OF THE DEBT. Both homes were included in the bankruptcy and our lawyer stated that we could not reaffirm the debt of our current house because he would not sign the papers and put his firm at risk should we stop making payments on the Charlotte house. So, we did not reaffirm. We didn't realize what that would mean until years later when we are trying to refinance the loan. Because we did not reaffirm, our payment history is not being reported to my wife's credit report. When we contacted them again a few months back, our lawyers office then explained to us that, under NC law, if we wanted to reaffirm the debt of the house we would have to reopen the case at a cost of approximately $5,000 and not only reaffirm the debt of the current house we live in, but we would possibly be subject to the judges decision to reaffirm our debt of all the other debt in the bankruptcy case including the Las Vegas house. REFINANCING OUR CURRENT HOUSEHARP:My wife called CitiMortgage, which is the mortgage company that our current house is financed with. She inquired about the possibility of refinancing under the Harp program since our loan is a Fanny Mae loan. Their response to her was very interesting. They said that we qualify for the program but we would need to reaffirm the debt because their underwriters can only go off of the credit bureau reports. Even though they have our payment history in their records they officially can't look at those payments as a source of our credit. It has to show six months of on-time payments with the credit bureau for us to qualify. Once again there is this hitch with the bankruptcy. We also spent a lot of time working with 5/3 on a FHA loan that i will cover in the next section. But in the beginning, 5/3 also said that if we waited 4 years after the BK we could qualify for a harp program. But I came back and asked this question again later and it seemed that they were not quit sure and never really answered the question. We also asked CitiMortgage if we could somehow put me on the title and the said no. Because technically my wife no longer has this loan. Its like it doesn't exist. Since my wife has been discharged of the debt. Yet we still have an opportunity to refinance or sell this house and put my name on a new loan. Basically we reaffirm the debt though refinancing or we sell the house.FHA and 5/3 loan PROCESS AND RESULTSI have to say that over the summer I had some dealings with a 5/3 bank representative who understood our situation and was probably the nicest banking professional my wife and I have ever dealt with. He went out of his way to help write letters to the three Credit Bureaus' and truly made an effort to help raise my wife's credit score so we could apply for an FHA loan. He then passed us off to the loan officer and it has become a very rocky ride. My wife's credit is now 662 and my credit is 748. When we gave all our information to the loan officer and he entered it into the 5/3 Bank desktop underwriter, we quickly got an approval for an FHA loan. We then went in on Sept 10, signed our papers, and were well on our way to being refinanced and finally out of the mess. But after two weeks of waiting we began calling to see what our status was. Our loan officer then called back and stated that our application had been denied by the underwriter citing the the following two reasons:1). First was that according to their credit report the bank that was holding our Las Vegas House did not immediately foreclose on the house. They waited until January 2010 to foreclose, obviously to spread out the damage that occurred form the crash of the housing market in Las Vegas to 2010. So in turn our underwriter said that is not three years removed. I immediately took our letter form the Western Carolina Bankruptcy Court to the bank. The discharge paperwork from the court stated that the debt was discharged on August 5th 2009. We never heard anything about this topic again but we also are not sure if this point was completely resolved. It appeared to my wife and myself that, at this point, it became even more difficult for our loan officer to respond to us in a timely fashion. He explained that to talk to an underwriter was extremely difficult and it would take weeks to work though this. I understand everyone is busy, but we felt at this point there was little interest in us and they wished we would go away. 2). The underwriter cited two 60 day late payments to my wife's student loans, starting in the fall of 2009. This is true. We are not trying to hide anything here, but due to the hardship of paying two mortgages and and our others bills we just couldn't pay every bill. My wife arranged for a forbearance on the student loan and we thought that had taken care of the late payments as well. We had to pay off some other bills and get our finances in order. Is there a statute of limitations on FHA loans concerning this guideline? How many years would we have to wait or would we never be able to refinance our loan because of 60 day late pay? I asked if this was a 5/3 guideline or an FHA guideline and once again i never got true answer. Who's guideline is it?After we continued asking questions, our loan officer was finally able to talk to our underwriter on the phone and she then decided to take a second look. She said that if we were only looking at my credit, the loan would go through, but because the house is in my wife's name, that's not possible. This loan has to go through only in my wife's name and we again had two options: 1). We would have to call CitiMortgage and start a process called quick transfer, where my wife would sign my name to the loan. This can't happen because technically the loan really doesn't exist because it has been discharged through bankruptcy. This is how my wife and I understand this. Is this correct? So option one is not really option at all. But please correct me if this is not the case.2). The underwriter said that she would call the FHA help line and see if 5/3 could proceed with what she called a manual underwrite. We then waited another week and heard nothing.I went in to our loan officers office after he did not respond to our e-mail several days later and then said stated the following. The underwriter said that we could not use the manual underwrite due to AUTOMATIC - STAY RULES. My loan officer did not understand what those rules were. He then pulled up those Automatic Stay Rules on the internet and printed the wikipedia version of the rules and handed them to me. I think he was trying to be nice, but I took this personally. Isn't he supposed to be trying to help understand and guide us? Can you explain what Automatic Stay Rules are in simple terms? I did not understand the internet version and how it applies to our situation.THE LOAN APPRAISALWhen we received a copy of the appraisal report there were several major errors in the report. First, one of the photographs is showing someone else's master bedroom. Ours is much nicer and appears much larger than the one shown. If the appraiser can mess up on something as simple as photographs of the property, I question what else he has done that I am not seeing.Second, the square footage is incorrect. The Mecklenburg County parcel information for our address clearly states that we have 2402 sq. feet of living space, not 2051 as stated in the report. As square feet serves to partially establish the value of a home, I feel strongly that this appraisal report needs to be corrected and our property revalued. I don't understand where he came up with his living area breakdown as he did not measure a single room and was only in our home for a matter of minutes.Third, how was the land value of $50,000 determined? There are currently two lots in this subdivision for sale, both smaller than ours and listed as follows:.54 acres - $54,900.75 acres - $59,900I realize that list price doesn't mean that is what they would actually sell for, however, I see nothing in his report that tells how he arrived at the $50,000 value.Fourth, on page 2 of his report, he says that the most weight was given to comps #1 and #2 since they are in the subdivision. Actually comps #1, #2, #5 and #6 are all in our subdivision. Comps #5 and #6 are actually closer to our home, on the same street as ours, just a few doors down compared to comps #1 and #2 which are both located in the older portion of the subdivision. Our side of the subdivision contains newer built homes. It seems as if he pulled the lowest priced comps to compare our home to when in actuality, 8858 Fultram Lane (valued at $263,160 and only two doors down) is much closer to our home in size than comps #1 and #2.FHA AND HARP GUIDELINES AND BANK OVERLAYSI have a friend that is a independent mortgage broker and he has been advising and helping me understand the industry and how it applies to us. He recently explained to me that when it comes to guidelines for a FHA and Harp loans it goes something like this. The government FHA loan provides a set of Guidelines for a client to get approval. This is called a desktop underwriter or (DU). And according to the DU with 5/3 we got a approval for a FHA loan at 3.69 %). My friend then explained to me that banks have overlays or a set of guidelines that they apply to protect themselves from issuing bad loans. A kind of double check or an ability to police themselves if you will. The reason for this is because that banks buy and sell massive chucks of loans to either to gain capital of to unload some debt. And being that our loan came from a bankruptcy, it could be a red flag and could stop the sale of a massive amount of loans if the buyer didn't like our loan. And the bank would be stuck with our loans and could not liquidate our loan. This information draws me back to the 60 day late pay. Is this a 5/3 guideline or FHA guideline? How do I get a copy of the guidelines for FHA loans? I visited the website and cannot really find what I'm looking for. And how do you get a copy of the guidelines for 60 day late pays from the banks. The reason I would like this information is to see if there is a bank out there that would be able to do business with us. The 60 day late pay was a big reason 5/3 denied us and seemed to be the only thing holding every thing us up in the first place.REVERSE COURSEIn the last few days we have reversed course with 5/3. Since we cannot refinance our house I've asked if we could meet to inquire about a new direction. My wife and I love our neighborhood and love these two undeveloped lots down the street. I asked if couldn't just build another house at a lower interest rate and try to sell this house. Since the current house has be discharged, are we legally clear to walk away from the house if it doesn't sell? I have a great credit score and my wife has a much better income. Is there a reason we can't just simply build a new house and sell or walk away from this house? And how can the bankruptcy guidelines (Automatic Stay Rules) for this house impact us getting a loan for building or buying a new house? We posed these very questions to 5/3 and they didn't answer the questions. They just sent us an email from the underwriter which stated the following: "It would be a challenge to apply my wife's name to any loan until we cleaned up the BK" What does that mean? I quickly replied what specifically did she mean by "clean up" and we have not heard an answer. Once again we did not get a real answer to our questions. We have run into even more problems and zero solutions. QUESTIONS1). Is there a provision for people that went though a bankruptcy that we could qualify for a Harp Program after 4 years?2). Can you explain the status of our current house loan? Since the debt has been discharged, is it still in my wife's name? 3.) If so, would it be legal to claim that we don't own a home on a loan application?4). Is it true what our bankruptcy lawyer said, that we can walk away from our current house with out having any repercussions since it has already been discharged?5). How many years would we have to wait or would we never be able to refinance our loan because of 60 day late pay? Is there a statue of limitations concerning this guideline?6.) Is this a 5/3 guideline or an FHA guideline?7). What are Automatic Stay rules and in simple terms can you explain what they are referring too?8). How would these bankruptcy rules apply to a new build or purchasing a different house?9). Do we have zero options for the rest of our lives? Please will somebody help us. by ringor_604_833 from Charlotte, North Carolina. Oct 30th 2012 Reply