Selling house after IIB

Anonymous · ‎02-01-2016

Hello all!

Has anybody sold a house after bankruptcy that was not reaffirmed? My question is are all of the accumulated interest, principal, escrow, etc. that have not been paid going to be included in the payoff amount? Even the amounts after bankruptcy was filed? We have not made a payment since January 2015 and filed bankruptcy in 4/15, discharged 7/15. The last statement we received had a principal balance of $264k and an amount due to be current of $24k. Just wondering what kind of figure I am looking at to sell it for.

ezdriver · ‎02-01-2016

Because all of the mortgage debt has been discharged, the mortgagor will have to approve your sale unless you sell for more than the principal balance owed. That is the amount to which the mortgagor is entitled. You do not need their permission to sell it for more but you need it if it will a short sale.

Anonymous · ‎02-01-2016

ezdriver wrote:

Because all of the mortgage debt has been discharged, the mortgagor will have to approve your sale unless you sell for more than the principal balance owed. That is the amount to which the mortgagor is entitled. You do not need their permission to sell it for more but you need it if it will a short sale.

So to be clear, you are saying the payoff amount is the principal owed and nothing else?

StartingOver10 · ‎02-01-2016

@Anonymous wrote:

@ezdriver wrote:
Because all of the mortgage debt has been discharged, the mortgagor will have to approve your sale unless you sell for more than the principal balance owed. That is the amount to which the mortgagor is entitled. You do not need their permission to sell it for more but you need it if it will a short sale.
So to be clear, you are saying the payoff amount is the principal owed and nothing else?

No, that is not what EZ is saying. You can sell a property that has been through bankruptcy and if you were still current on your payments you would owe the principal balance plus the interest due from the last payment and whatever fees are associated with the sale (doc stamps, title insurance, commissions etc).

However, since you have not been making your payments since the filing date, there are fees that kick in that you would owe - attorney fees etc

Some people elect to get a payoff quote from the lender before they put it on the market so they know if they are going to have a short sale or not.

If you go through a short sale, where the market value is less than the amount owed, then you need bank approval for the sale. In cases like your case, you would be trying to short sale the property prior to the foreclosure.

Other people have equity anyway and choose to sell it on the market as a traditional sale.

The issue becomes a problem when the fees begin to pile up after your BK filing date.

As a result, some people just allow the lender to foreclose on the mortgage lien. If your property forecloses, it still shows as iib on your CR because it was discharged in BK

ezdriver · ‎02-01-2016

@StartingOver10 wrote:
@Anonymous wrote:

@ezdriver wrote:
Because all of the mortgage debt has been discharged, the mortgagor will have to approve your sale unless you sell for more than the principal balance owed. That is the amount to which the mortgagor is entitled. You do not need their permission to sell it for more but you need it if it will a short sale.
So to be clear, you are saying the payoff amount is the principal owed and nothing else?
No, that is not what EZ is saying. You can sell a property that has been through bankruptcy and if you were still current on your payments you would owe the principal balance plus the interest due from the last payment and whatever fees are associated with the sale (doc stamps, title insurance, commissions etc).

However, since you have not been making your payments since the filing date, there are fees that kick in that you would owe - attorney fees etc

Some people elect to get a payoff quote from the lender before they put it on the market so they know if they are going to have a short sale or not.
If you go through a short sale, where the market value is less than the amount owed, then you need bank approval for the sale. In cases like your case, you would be trying to short sale the property prior to the foreclosure.

Other people have equity anyway and choose to sell it on the market as a traditional sale.

The issue becomes a problem when the fees begin to pile up after your BK filing date.
As a result, some people just allow the lender to foreclose on the mortgage lien. If your property forecloses, it still shows as iib on your CR because it was discharged in BK

Well said ...

Payoff amount on loans change daily. Principla balance owed remains constant if no new payments are being made. The only way to know what the payoff amount is for a given date rane is to have the mortgage provide it in writing. The only reason that you seem to be asking the question is that you may think that you have some equity in the property once it is sold. However, your actual equity will be determined by reducing the sale price by all expense as So explained.

Are we missing something in your question? Your discharge does not remove the mortgagor's entitlements. In fact, they can and will foreclose on it when they are ready because you are not paying them ... so you are a squatter to them.

Anonymous · ‎02-01-2016

@ezdriver wrote:
@StartingOver10 wrote:
@Anonymous wrote:

@ezdriver wrote:
Because all of the mortgage debt has been discharged, the mortgagor will have to approve your sale unless you sell for more than the principal balance owed. That is the amount to which the mortgagor is entitled. You do not need their permission to sell it for more but you need it if it will a short sale.
So to be clear, you are saying the payoff amount is the principal owed and nothing else?
No, that is not what EZ is saying. You can sell a property that has been through bankruptcy and if you were still current on your payments you would owe the principal balance plus the interest due from the last payment and whatever fees are associated with the sale (doc stamps, title insurance, commissions etc).

However, since you have not been making your payments since the filing date, there are fees that kick in that you would owe - attorney fees etc

Some people elect to get a payoff quote from the lender before they put it on the market so they know if they are going to have a short sale or not.
If you go through a short sale, where the market value is less than the amount owed, then you need bank approval for the sale. In cases like your case, you would be trying to short sale the property prior to the foreclosure.

Other people have equity anyway and choose to sell it on the market as a traditional sale.

The issue becomes a problem when the fees begin to pile up after your BK filing date.
As a result, some people just allow the lender to foreclose on the mortgage lien. If your property forecloses, it still shows as iib on your CR because it was discharged in BK
Well said ...

Payoff amount on loans change daily. Principla balance owed remains constant if no new payments are being made. The only way to know what the payoff amount is for a given date rane is to have the mortgage provide it in writing. The only reason that you seem to be asking the question is that you may think that you have some equity in the property once it is sold. However, your actual equity will be determined by reducing the sale price by all expense as So explained.

Are we missing something in your question? Your discharge does not remove the mortgagor's entitlements. In fact, they can and will foreclose on it when they are ready because you are not paying them ... so you are a squatter to them.

I may or may not have equity in the house, frankly it depends on the payoff vs. the offer and any closing costs. I am proceeding as if there is equity, but if there is no equity left (payoff too high) than I will do a DIL or let it foreclose. I guess i'm trying to find out if the interest that I haven't been paying would be included in a payoff quote. Does it still accrue after the bankruptcy discharge? Let me give the breakdown on on the amount due:

principal $491.12+

interest $752.53+

escrow tax and insurance $339.49=

regular monthly payment $1583.34

fees and charges $1734.47

overdue payments $20674.96

total amt due (13 months) $23992.77

principal $264269.71

I can see the principal and fees and charges included in a payoff quote ($266004.18) but not sure about the other line items. Sorry to not be very clear in my question!

jacetx · ‎02-02-2016

I'm very curious about this thread because my parents are in this situation. They have a mortgage through Wells Fargo and it was not reaffirmed. They contacted the bank and were told that they could not sell the house, however, they could walk away and owe nothing. Of course my parents are not doing this since they don't want to lose all of the equity in the house. So, I guess I need to call them and see if they are still interested in selling the house so that it can be listed?

ezdriver · ‎02-02-2016

@Anonymous wrote:
@ezdriver wrote:
@StartingOver10 wrote:
@Anonymous wrote:

@ezdriver wrote:
Because all of the mortgage debt has been discharged, the mortgagor will have to approve your sale unless you sell for more than the principal balance owed. That is the amount to which the mortgagor is entitled. You do not need their permission to sell it for more but you need it if it will a short sale.
So to be clear, you are saying the payoff amount is the principal owed and nothing else?
No, that is not what EZ is saying. You can sell a property that has been through bankruptcy and if you were still current on your payments you would owe the principal balance plus the interest due from the last payment and whatever fees are associated with the sale (doc stamps, title insurance, commissions etc).

However, since you have not been making your payments since the filing date, there are fees that kick in that you would owe - attorney fees etc

Some people elect to get a payoff quote from the lender before they put it on the market so they know if they are going to have a short sale or not.
If you go through a short sale, where the market value is less than the amount owed, then you need bank approval for the sale. In cases like your case, you would be trying to short sale the property prior to the foreclosure.

Other people have equity anyway and choose to sell it on the market as a traditional sale.

The issue becomes a problem when the fees begin to pile up after your BK filing date.
As a result, some people just allow the lender to foreclose on the mortgage lien. If your property forecloses, it still shows as iib on your CR because it was discharged in BK
Well said ...

Payoff amount on loans change daily. Principla balance owed remains constant if no new payments are being made. The only way to know what the payoff amount is for a given date rane is to have the mortgage provide it in writing. The only reason that you seem to be asking the question is that you may think that you have some equity in the property once it is sold. However, your actual equity will be determined by reducing the sale price by all expense as So explained.

Are we missing something in your question? Your discharge does not remove the mortgagor's entitlements. In fact, they can and will foreclose on it when they are ready because you are not paying them ... so you are a squatter to them.

I may or may not have equity in the house, frankly it depends on the payoff vs. the offer and any closing costs. I am proceeding as if there is equity, but if there is no equity left (payoff too high) than I will do a DIL or let it foreclose. I guess i'm trying to find out if the interest that I haven't been paying would be included in a payoff quote. Does it still accrue after the bankruptcy discharge? Let me give the breakdown on on the amount due:

principal                            $491.12+
interest                              $752.53+
escrow tax and insurance $339.49=
regular monthly payment $1583.34

fees and charges              $1734.47
overdue payments            $20674.96
total amt due (13 months) $23992.77

principal                            $264269.71

I can see the principal and fees and charges included in a payoff quote ($266004.18) but not sure about the other line items. Sorry to not be very clear in my question!

YES ... you owe all of it...if you sell the house ... and the lender will likely have a say in that matter since you are not clear on whether or not you have any equity in it. The lender has just not gotton around to kicking you out but that does not mean they won't. The fact that you are not legally liable for any of it because of your discharge does not mean that the lender is not entitled to collect what is owed to them from the proceeds of the sale of their collateral. Walk away from the house if you do not want to pay any of it. To receive more accurate information, call the lender's bankruptcy department.

0REDSOX7 · ‎02-02-2016

@jace8602 wrote:
I'm very curious about this thread because my parents are in this situation. They have a mortgage through Wells Fargo and it was not reaffirmed. They contacted the bank and were told that they could not sell the house, however, they could walk away and owe nothing. Of course my parents are not doing this since they don't want to lose all of the equity in the house. So, I guess I need to call them and see if they are still interested in selling the house so that it can be listed?

I am not sure how Wells Fargo could tell them they could not "sell the house" - so long as they sell it for a profit, and Wells Fargo gets their money to satisfy the terms of the loan and release the deed, there is nothing they can do to stop it...

BK Discharge 2/11/14

Currently in the garden.

StartingOver10 · ‎02-02-2016

@0REDSOX7 wrote:
@jace8602 wrote:
I'm very curious about this thread because my parents are in this situation. They have a mortgage through Wells Fargo and it was not reaffirmed. They contacted the bank and were told that they could not sell the house, however, they could walk away and owe nothing. Of course my parents are not doing this since they don't want to lose all of the equity in the house. So, I guess I need to call them and see if they are still interested in selling the house so that it can be listed?
I am not sure how Wells Fargo could tell them they could not "sell the house" - so long as they sell it for a profit, and Wells Fargo gets their money to satisfy the terms of the loan and release the deed, there is nothing they can do to stop it...

I totally believe that jace8602's parents were told that they could not sell the house by WF - but it is a false statement.

If your parents have filed bk and successfully discharged from Bk, then they are free to sell their own home. Your parents own the home, even with a defaulted mortgage, right up until the date the mortgage lien is foreclosed upon. As pointed out earlier, they aren't responsible for the payments because it is iib, but if they sell the home, they are responsible for delivering clear title and they can only do that by paying off the mortgage lien and any other liens in full. [Please note: I am assuming that the trustee in the Bk abandoned the collateral before you put it on the market as they do in most cases, but not all. You will need to check your Bk paperwork to see the status or call your attorney.]

WF does NOT have the deed. Not in this country. That's why WF has to actually go through the foreclosure process - to get the collateral. Speak to your Bk attorney or a real estate attorney for clarification. My personal opinion is this: they say they have the deed either because the CSR doesn't know any better (no knowledge) or because they want to have as much time as possible to get the foreclosure moving so they get the property before you sell it. If you pay off that mortgage they have no right to the property and selling it would be a payoff (getting their funds in full). OTOH: if it is a short payoff, then you need WF to complete the short sale - then it is a problem.