Foreclosure problem

[indiananorm]

On 12-31-2009 my Chapter 7 bankruptcy was discharged.  I did not keep the house and moved out.  Foreclosure proceedings were started but were never completed and the house is still in my name.  What can I do??  My loan was sold to Ocwan after the bankruptcy.

So much for moving on with my life.  

[StartingOver10]

You have a couple of choices:  Deed in Lieu or short sale (or foreclosure). As you have experienced, OCWEN is especially uncooperative with any of the above. Normally the servicer wants you to list your home for short sale, even after BK, before they will entertain a Deed in Lieu. If you list the property for short sale, make sure the agent you hire is working with an experienced short sale attorney. You are very likely to get an offer for a DIL from OCWEN once 60 days has passed. If you don't just continue with the short sale. There is no upside for OCWEN since your mortgage has been discharged.

Once you complete the short sale or the DIL then you can start the rebuilding process. 

[indiananorm]

I don't think I could sell the house.  No one has lived there for over 3 years and the house has been vandalized.

[StartingOver10]

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@indiananorm wrote:

I don't think I could sell the house.  No one has lived there for over 3 years and the house has been vandalized.

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Yes, you can sell the house. I'm a Realtor, that's what we do. I do a lot of short sales and quite a few are empty. Just because your personal liability for the loan repayment has been removed from the property via the BK, it doesn't remove the mortgage lien from the property.

Right now you and whoever else is on title own the property. The BK discharged your personal responsibility for repayment of the loan only. When you work with a Realtor, make sure the Realtor is experienced with short sale listings and sales. Many of us work with attorney's to handle the short sale communications with the bank. The fees for the Realtor and the attorney come from the proceeds of the sale.

Until the deed is transferred out of your name either thru the foreclosure process or DIL or short sale process, your rebuilding process is on hold. BTW, it is not unusual for the property to be vandalized while vacant. It does effect the value, but remember, you aren't responsible for the deficiency balance on the loan anyway because of the BK. Just getting it on the market and providing the short sale pkg may get OCWEN to move on it.

[indiananorm]

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@StartingOver10 wrote:

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@indiananorm wrote:

I don't think I could sell the house.  No one has lived there for over 3 years and the house has been vandalized.

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Yes, you can sell the house. I'm a Realtor, that's what we do. I do a lot of short sales and quite a few are empty. Just because your personal liability for the loan repayment has been removed from the property via the BK, it doesn't remove the mortgage lien from the property.

Right now you and whoever else is on title own the property. The BK discharged your personal responsibility for repayment of the loan only. When you work with a Realtor, make sure the Realtor is experienced with short sale listings and sales. Many of us work with attorney's to handle the short sale communications with the bank. The fees for the Realtor and the attorney come from the proceeds of the sale.

Until the deed is transferred out of your name either thru the foreclosure process or DIL or short sale process, your rebuilding process is on hold. BTW, it is not unusual for the property to be vandalized while vacant. It does effect the value, but remember, you aren't responsible for the deficiency balance on the loan anyway because of the BK. Just getting it on the market and providing the short sale pkg may get OCWEN to move on it.

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I visited the house yesterday and the place is trashed on the inside.  They would be lucky to get $10000 out of the house.  Would Ocwen work with that small amount??

[StartingOver10]

The short answer to your question is: Yes.  

The long answer is: It is not the actual dollar amount in a strict sense, it is the amount in relation to the market value.

When the short sale package is submitted to the servicer, in your case OCWEN, they will review the documentation and send out for a third party valuation of the property to make sure it is being sold for market value in its current condition. Market valuation is typically done as a BPO (Broker Price Opinion) or by an appraiser. The servicer will not take the valuation from the listing agent, only the unbiased third party evaluator.

The benefit to the servicer is 1) it will save them money on foreclosure costs and 2) they can deliver clear title when the title is transferred from you to the new buyer. Right now the banks/lenders are having a very difficult time obtaining clear title.

The benefit to you is you get it out of your name more quickly so you can move on with your life and rebuild without this event hanging over you. As long as the title is in your name you are responsible for fees and other items that occur after your BK. An example would be HOA fees generated after your BK filing date or property taxes. In the real world, the lender would pay the taxes to ensure they are first in line with the lien. But OCWEN is known for having major servicing issues including non-payment of property taxes. It other words, get it out of your name to keep any future liability from occurring to you.