Previous Property - Post CH 7

[jjjd123]

Need some advice to see if any one has run into this before.  I recently discharged a Ch 7 about 45 days ago, I included the mortgage on a previous property I owned and had vacated several years ago.  For some reason the mortgage has been transferred around and the lien holder has never foreclosed.  Today I received a nice leter from the city with a list of violations from the grass being to long to the pool water not being clear.  Not surprising since I have not occupied the house in almost 4 yrs.  I have contacted the current lender and tried to get them to start foreclosure and offered to sing a deed in lieu, they just dont want to move very quick.  Anyone run into somethin similar.  Not sure what to do about the city trying to come after me.  I guess I can have the yard cut, but i dont have musch cash to throw at the other problems and there is no power to even try and drain the pool.

Suggestions?

[amber78]

I have heard of this happening.. I just FILED and have two vacant houses (US Bank and CHASE) and so I am hoping this doesnt happen to me.  the mortgage and actual home owner are two different things.. you can have the house, but not the mortgage.. have the mortgage but not be an owner the house.. or have the mortgage and the house.. things get even WORSE if you are divorced... with me my ex and I have in our divorce papers that we both plan to file.. issue now is he doesnt qualify for CH 7.  Currently homes are reporting I filed CH7 and owe nothing, but my name is still on as half/owner of both houses  so I believe I am responsible for anything that happens with the house.  

I want my ex to sign an quit claim (signing my part of the ownership over to him) but if he rejects it I think Im SOL

[StartingOver10]

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@amber78 wrote:

I have heard of this happening.. I just FILED and have two vacant houses (US Bank and CHASE) and so I am hoping this doesnt happen to me.  the mortgage and actual home owner are two different things.. you can have the house, but not the mortgage.. have the mortgage but not be an owner the house.. or have the mortgage and the house.. things get even WORSE if you are divorced... with me my ex and I have in our divorce papers that we both plan to file.. issue now is he doesnt qualify for CH 7.  Currently homes are reporting I filed CH7 and owe nothing, but my name is still on as half/owner of both houses  so I believe I am responsible for anything that happens with the house.  

I want my ex to sign an quit claim (signing my part of the ownership over to him) but if he rejects it I think Im SOL

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So yes, amber78 your personal liability for repayment of the mortgage has been discharged in your Bk 7.

But the mortgage company still has a lien on the property and in order to remove the mortgage lien you would need to sell the property (short sale or regular sale) OR get the lender to accept a Deed In Lieu OR the lender has to foreclose.  You can sell a property after BK. Most end up going as a short sale. Lenders can take their time foreclosing and that is where the issue pops up of property maintenance, HOA fees (if any) and other property related items.

A quit claim deed won't help in any of the above.

It is in your best interest to sell the property since you have been discharged. That way you are pushing the bank to either accept the short sale OR complete their foreclosure. The bank takes their time because they are leaving the current owners of record (you) on the deed for as long as they can do so to pass through property related expenses to you. I have noticed that loan servicers use the Deed in Lieu as a carrot and when you decide to sign it they suddenly decide not to accept it in many instances so be very, very careful and consult an attorney before you sign one.

Now, if you had actual equity - you wouldn't believe how fast the bank can move to foreclose. It is when the lender/servicer thinks there is no equity where they drag their feet. The more upside down you are the slower the lender will move to foreclose especially if there are HOA fees involved. At least that is my experience as an agent here in S Fl where the number of f/c's is still very high.

[cliccmade]

I would send them the bk papers and watch them poop themselves

[StartingOver10]

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@cliccmade wrote:

I would send them the bk papers and watch them poop themselves

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Not going to happen^^^^. The op still has ownership of the property until the property is out of her name. She is responsible for liens issued after her BK. She needs to get in touch with her BK attorney to have it explained to her. The issue is she still owns the property and events from Bk discharge to now are her responsiblity. She only discharged personal liability for the mortgage. Not subsequent city liens.

[0REDSOX7]

Just for my own info - what happens to those liens when the lender actually forecloses if the city has put a lien on your house because of fines?

[StartingOver10]

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@0REDSOX7 wrote:

Just for my own info - what happens to those liens when the lender actually forecloses if the city has put a lien on your house because of fines?

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From a practical standpoint - because I see this all the time - the lender/servicer eventually forecloses. Then the city goes after the lender/servicer and they ignore the liens right up until they sell it to another buyer. Then the servicer does one of two things (and I have seen both).  If the buyer is a cash buyer and not very observant, the lender will NOT pay the lien and deliver a clouded title to the buyer. If the buyer is financing the property, the lender/servicer will negotiate a settlement with the city for clear title.

I have been an agent for buyers on REO properties and the servicer always tries to get away with not paying the liens first. I suggest to the buyer that we get an attorney to represent his interest to get clear title. It always takes longer and involves a lot of back and forth just to get the lender/servicer to clear the liens prior to closing. I am amazed though at the number of cash buyers (that are not my clients) that do not read the title commitment before closing. They assume it will be paid by the lender/servicer because they now own the property. Those new owners are going to be surprised when they turn around to sell and discover their is a cloud on the title.

They do not try this maneuver on a financed property.....what does that tell you?

[0REDSOX7]

Interesting - we did not reaffirm my mortgage and am still paying on it to keep it current (we are living in the house).  When we go to move, we will sell the house as if we never went through BK because in two years, we will (should??) have positive equity in it.

There is no issue with this, right?

[StartingOver10]

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@0REDSOX7 wrote:

Interesting - we did not reaffirm my mortgage and am still paying on it to keep it current (we are living in the house).  When we go to move, we will sell the house as if we never went through BK because in two years, we will (should??) have positive equity in it.

There is no issue with this, right?

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^^^No issues at all

It is an excellent strategy. You are in the best of both worlds. First you have discharged your personal liability for repayment of the mortgage but retained ownership of the property and continued to make ontime payments. Any equity you have belongs to you subject to the payoff of your mortgage and closing costs at the time of sale.  If the trustee was going to make a claim on the asset (your home) the trustee would have notified you during your BK.

[0REDSOX7]

Awesome. That's some good news. Our home values have actually been going up where I live so, glad this strategy would pay off.

Second question. Our mortgage is with B of A - how do we get payment history for them if we just use online bill pay? There are no cancelled checks, etc. I assume we would not be able to get a new mortgage with them because of the bankruptcy (and other cards discharged with them)???

Sorry for the questions and thread hijacking. But I am curious now.