Need help for a friend, walking away from townhouse after Chp. 7

[In Maryland]

A friend of mine was forced to declare chp. 7 after a layoff and decided to include his townhouse. It was discharged in June 2012 and he wants to walk away.

Wells Fargo owns the mortgage, the only problem is that they apparently can not find the original paperwork as his original loan has been sold several times since he purchased the home in 1994.

He has been waiting on them to take the property back but the process has not even started. In the meantime he has property taxes and association fees adding up even though he no longer lives there.

 

The property is in the northern Virginia area where the real estate market is rather hot at the moment. He owes less than similar townhouses in the same neighborhood are currently selling for.

 

Is there any mutally agreed way that he and the bank can sign over the property to the bank without the original paperwork being found?

 

 

[nekom]

A short sale or deed in lieu are the preferred "voluntary" property surrender instruments I'm familiar with. As to whether or not that requires them to find the original paperwork, I'm not sure. Hey, if they can't find the original paperwork, he might be able to fight to have the mortgage released entirely. Probably a long shot, but just throwing that out there.

[chicagorich]

Well, since he technically still owns it, has he thought about selling it.? Is there enough equity to cover realtor fees.? As to what would happen with any proceeds, he should get to keep the amount up to the BK exemption for his state, then I guess the rest goes to the BK trustee.

[800score]

I agree with chicagorich. Has your friend thought about holding it (ie, getting a renter) to cover those costs? It might be wise to get short term renters in at a lowered rent which will help him catch up with the amounts owed.

[Capstone Mortgage]

I think renting it at a competitive price to catch up may be the best option here. It will be a lesser pain then what he is going through now and in the end will probably be worth it. Its worth a shot anyway.