One big complicated mess - Any suggestions/advice?

[doodlebugger]

We had a house built on land that was gifted to us back in 2001. We filed bk7 in 2005, due to medical and employment issues. We lived in the house and made payments until around late 2011 when we were having additional medical and employment problems. At that point, we were at the 7 year mark from our bk7, and the house fell off our credit reports, but we proceeded to try to get a modification due to our financial troubles. The bank advised us to stop making payments in order to qualify for a modification. We did. That was our first mistake. Two years later, we were still fighting with the bank trying to get a modification and they would not accept our payments because we were already so far behind and we couldn't afford to pay all the arrears plus the exorbitant legal fees they were trying to charge us. We escaped foreclosure twice on technicalities (judge denied the bank's request to foreclose), and we started having problems with the property including mold issues. We were all getting sick, including our animals, and at that point, we decided to see what our options were. During this time, we were approved for an in-house modification, but then we found out that they violated our bankruptcy terms because they left some particular sections out of the modification that they were required by law to have. We stopped making our payments and demanded they fix their error. Then, since we did that, it messed up our modification, we have to have it redone. The entire thing was a nightmare and at this point we were done with this house. We ended up doing a quit claim deed for my husband to me on the house we were living in (basically putting it in my name only), and we were able to secure a USDA loan for him (the story was over at the mortgage forum) and we fully disclosed our entire situation and moved into the new house in January 2014. Note that I was not put on the loan or the deed to the new house, and was required to sign my rights away until such time we can get the old house removed from my name. We notified the bank and told them to foreclose or allow us to sign the deed back over to them. Nothing happened for over a year except that the bank took possession of the property by winterizing it and changing the locks. In the fall of 2014, I filed personal bankruptcy (just me) again due to medical reasons, and my lawyer advised me to include the first house "just in case". So the first house has been included twice in bk7 for me, and they finally started foreclosure proceedings again in January 2015, but I called them to see if they would now consider a deed-in-lieu to quickly get the house out of my name, and was surprised when they said new rules had been in place recently that allowed me to qualify for that. The first house is a Fannie Mae and is with PNC. The lady gets really excited and says that I might get up to $10,000 for doing the deed-in-lieu. I ask her if they know about the quit claim deed from my husband to me, and she says they have no record of it. She says that it's fine - I will be the one to sign the documents, and the house no longer has anything to do with my husband. Fast forward to a month later, we get a phone call from a local home inspector asking us for the lock box code on the house so they can get in to do an inspection. We call the bank, and they have no knowledge of why this person is there but it's likely to do with the deed-in-lieu process. I call back a week later to see what is going on and they tell me that I have to keep calling them because legally they can't contact me due to the bankruptcy. They tell me that I am still in the process of "getting approval" for a deed-in-lieu, but that I have to answer some questions that a credit analyst has. They ask me about a second lien which was released back in 2008-2009, and they claim they have no record of it. Um, that was mailed to you back in 2008-2009, and is on record at the local courthouse. They ask me if I could go to the house and have it in "broom swept condition" within 30 days. I tell them I don't have access to the house and haven't been there since January 2014. They get me the lock box code and tell me to go and check out the property. I get there, someone has built a railing on one set of steps, thrown garbage, boxes, and other belongings out of the house (these were things we abandoned), removed all the screens from the windows, removed all the doorknobs, removed a few light fixtures, and much more. The house is riddled with mold and stinks so bad. I got choked up from being in there just for 5 minutes. The roof has leaked, the carpet is stained, and who knows what else is wrong with it. I took pictures and left. I call them when I get home - they tell me that "broom swept condition" means that the house is clean, no belongings, no trash, swept floors, and basically move in condition which means no repairs to be done. I tell the people that the house is not like I left it in January 2014 and have no way to prove that we weren't responsible for the damages. She tells me that if we can't get it in "broom swept condition" at the end of 30 days, we won't qualify for the deed-in-lieu and they will proceed with the foreclosure anyways. We got court paperwork yesterday that says the final court date is in less than two weeks. I cannot find any place in the paperwork that states that due to my past two bankruptcies, that I don't have any financial obligation which really freaks me out.

 

If you got through all of that, here is what I want to happen, and I need to know whether it's possible or what I need to do.

I don't want the house, and I want it out of my name. I also do not want this to be reported to my credit report as a personal judgment against me, and I don't want to have any financial obligation.

If I let them foreclose, can I accomplish all of this? Should I go to court and talk to the judge?

[hoosier78]

I am a bit dizzy from reading all that.

[Kuuner]

My head hurts too from reading it but, you are making this way bigger than it needs to be. If everything you say is true, in the immortal words of Tony Soprano, "fugget abud it".

 

You have no obligation or liability financially to the property so, walk away and forget about it and quit worrying about it.

 

Sounds like you are going to get what you want, the house out of your name. There is no personal judgment on your credit report if it was included in your bankruptcy(ies) and you do not have any financial obligation. You just let them foreclose and be done with it.

 

P.S...paragraph seperation works wonders on the reader's eyes.

Edited March 31, 2015 by Kuuner

[doodlebugger]

Well to my credit, I did title it appropriately and say it was one big complicated mess!!

 

The big issue for me is the stupid "law firm" representing the bank. I can't afford a lawyer, and I am worried that by not responding, I could somehow get stuck with some kind of financial obligation. As long as the house was abandoned and included in two bk7, would we be liable for anything like insurance or property taxes? The "law firm" has been denied at least twice on foreclosure because they were trying to do it without the proper paper trail. I think everything is lined up now, but I just wanted to make sure that we are totally protected under the bk7, and that there aren't any hidden charges that could be extracted by the "law firm"?

 

Sorry for the massive post.....I was totally in panic mode and not thinking clearly. Hubby had me really stressed about the situation and I was telling him I would get some opinions here.

 

I'm so relieved to know I can just walk away......I do not want to go into that house ever again if I can help it!!!

[Kuuner]

You aren't liable for anything if it was included in your bankruptcy(ies). As mentioned, put it behind you and get some rest.

[tiggerlgh]

You are still responsible for insurance and taxes post bk. You still own the home not the bank, as such you are still liable for those unless I missed something.

[doodlebugger]

That's what I'm afraid of, but I thought if you filed bk7 no asset, that it would cover that, even if I didn't specifically name the insurance company or the tax division of my county/state???

[NAN101]

The taxes are attached to the house so those will still continue to accrue. The bank most likely though will continue to pay the taxes even if you BK the mortgage. They are not going to want a tax lien attached to the property. As for the insurance, since the house will still be in your name until it forecloses, you are responsible if anyone gets hurt on the property, so the insurance is for your protection. If you had an attorney with your BK, they should have sent you a notice of what you need to do or are responsible for after discharge as far as the house goes.

[Kuuner]

You are still responsible for insurance and taxes post bk. You still own the home not the bank, as such you are still liable for those unless I missed something.

The bank will force place insurance and they will pay the taxes. The taxes follow the home. Poster has no obligation to continue to pay.

The taxes are attached to the house so those will still continue to accrue. The bank most likely though will continue to pay the taxes even if you BK the mortgage. They are not going to want a tax lien attached to the property. As for the insurance, since the house will still be in your name until it forecloses, you are responsible if anyone gets hurt on the property, so the insurance is for your protection. If you had an attorney with your BK, they should have sent you a notice of what you need to do or are responsible for after discharge as far as the house goes.

The bank will force place insurance...the minute the poster stops paying. They will either advance to pay, or force place.

[tiggerlgh]

The bank paying it and ops obligations are two different things IMHO. Also op is still liable if any accident etc occurs at the home.

[Kuuner]

Considering there will be insurance, I would say the liability is mitigated

 

The bank paying it and ops obligations are two different things IMHO. Also op is still liable if any accident etc occurs at the home.

Considering there will be no lapse in insurance, I would question any potential liability for the OP. Again, it's just that simple. There will be coverage. If some yahoo trips, they are going to file a claim with the insurance company. It doesn't matter who purchased the insurance. The bank will not let the property go without insurance for the exact reason of some yahoo tripping so, while I understand your point, I would disagree that they are two different things.

[NAN101]

Considering there will be insurance, I would say the liability is mitigated

 

The bank paying it and ops obligations are two different things IMHO. Also op is still liable if any accident etc occurs at the home.

Considering there will be no lapse in insurance, I would question any potential liability for the OP. Again, it's just that simple. There will be coverage. If some yahoo trips, they are going to file a claim with the insurance company. It doesn't matter who purchased the insurance. The bank will not let the property go without insurance for the exact reason of some yahoo tripping so, while I understand your point, I would disagree that they are two different things.

 

The issue with forced placed insurance is that the coverage will only provide for and cover the banks interest. If the house burns down or has significant damage to it, they will be covered. It isn't going to pay for an injury, etc to someone on the property. My BK attorney was very clear about that once the discharge takes place and until the foreclosure is complete. The forced place insurance is only collateral insurance and nothing else. Since the home is still in your name prior to foreclosure, the homeowner is responsible for any injury or claim for an individual against the property.

Edited April 15, 2015 by NAN101

[Kuuner]

 

Considering there will be insurance, I would say the liability is mitigated

 

The bank paying it and ops obligations are two different things IMHO. Also op is still liable if any accident etc occurs at the home.

Considering there will be no lapse in insurance, I would question any potential liability for the OP. Again, it's just that simple. There will be coverage. If some yahoo trips, they are going to file a claim with the insurance company. It doesn't matter who purchased the insurance. The bank will not let the property go without insurance for the exact reason of some yahoo tripping so, while I understand your point, I would disagree that they are two different things.

 

The issue with forced placed insurance is that the coverage will only provide for and cover the banks interest. If the house burns down or has significant damage to it, they will be covered. It isn't going to pay for an injury, etc to someone on the property. My BK attorney was very clear about that once the discharge takes place and until the foreclosure is complete. The forced place insurance is only collateral insurance and nothing else. Since the home is still in your name prior to foreclosure, the homeowner is responsible for any injury or claim for an individual against the property.

 

I would suggest a review of the policy by the bank as every FPI policy we apply to a loan has blanket coverage for these exact types of potential issues.

[doodlebugger]

We cancelled our home owner's policy on the old place when we moved into the new place. The mortgage company sent us a notice stating they were securing a policy to cover the house. Also, we notified the local sheriff's office that we no longer lived in the house and that it was surrendered in bk7, and they said the only way we would have to pay is if the bank refused to pay the taxes and then they would have a lien on the property. However, the bank/mortgage company did pay the taxes and they are not in our name any longer because we have not seen a bill or a notice in over two years for it. Our bk lawyer said we had no obligations to the house or the bank. I forgot to respond or do anything, so by not I am certain that the foreclosure was approved by the judge, and I will find out tomorrow when I go to the clerk's office whether they will try to hold us liable for anything. I also have to follow up with the bank tomorrow, because they insist that they cannot call me due to bk7 (despite it's been discharged twice and the latest one was over 6 months ago!!!). I am just hoping this nightmare will be over!

[doodlebugger]

So, we got a notice that says that the house was approved to be foreclosed on, and that our application to do the deed-in-lieu was denied. Fine. I wanted it to just be over with. The house was supposed to sell this past week. I got a letter in the mail from the bank that my account has been assigned to loss mitigation. What in the world does that mean? Did they not sell the house??? Am I still stuck with it??

[IndyPoolPlayer]

So, we got a notice that says that the house was approved to be foreclosed on, and that our application to do the deed-in-lieu was denied. Fine. I wanted it to just be over with. The house was supposed to sell this past week. I got a letter in the mail from the bank that my account has been assigned to loss mitigation. What in the world does that mean? Did they not sell the house??? Am I still stuck with it??

Loss Mitigation is the department that is in charge of disposing the house. Lining up a realtor, pulling property records from the county recorder and treasurer, and evaluating all of the offers that come in.

[Kuuner]

 

So, we got a notice that says that the house was approved to be foreclosed on, and that our application to do the deed-in-lieu was denied. Fine. I wanted it to just be over with. The house was supposed to sell this past week. I got a letter in the mail from the bank that my account has been assigned to loss mitigation. What in the world does that mean? Did they not sell the house??? Am I still stuck with it??

Loss Mitigation is the department that is in charge of disposing the house. Lining up a realtor, pulling property records from the county recorder and treasurer, and evaluating all of the offers that come in.

 

That's not entirely accurate. Loss Mit is in charge of exploring all alternatives to foreclosure (Short sale, deed in lieu, modification, forebearance) and in the absence of any approved alternative, completing the foreclosure and referring to REO if it doesn't sell third party. Once in REO, it gets assigned to an asset manager that does the things you associated with Loss Mitigation. The Loss Mit referal is standard. "Let's take one more crack at it before the foreclosure sale so no one can come back later and say we didn't try". They document the efforts and the file moves through the process.

[doodlebugger]

Received the notice that the bank bought the house back at the sale. Then we received another letter stating the loss mitigation department has assigned me a new case manager. I haven't called because at this point I don't want to stir anything back up. All I want is for them to take it out of our names and move on. So, I'm guessing at this point I'm still in the clear - how long before this stupid thing gets out of our name, and is there any way to speed it up???

[Kuuner]

Should be "Out of your name". Soon, someone will send a "Trustee's Deed Upon Sale" to the REO department for recording.

[doodlebugger]

Thanks Kuuner. I got a letter last week, that states it's an "Order Confirming Master Commissioner's Report of Sale" and it says that the purchaser will be given a deed by the Master Commissioner upon payment of the purchase price and that the purchaser be granted a Writ of Possession upon the giving of the deed. When should I go to my local courthouse to check to see if it's been transferred?

[Kuuner]

I don't know how fast and/or efficient your local courthouse records department is so, who knows.

[doodlebugger]

I followed up today with the local clerk, the PVA, and the sheriff's office (regarding county taxes), and this is what I found out - the bank has not removed our names from the deed, and I was told that if they fail to pay the property taxes, they said I would be responsible for them (taxes are up to date as of this year). They also said that if the bank did not keep homeowner's insurance on the property, and it's in my name, if someone got hurt on the property, I can be sued. I just want the property out of our names.....how can I expedite this? They foreclosed, and the bank bought the house back in June of this year. What I am worried about is what liabilities I will have if they keep the house in our names?

 

Edited to add - the PVA office told me that they don't have any ordinances that prevent them from keeping our names on the deed until they decide to sell, which could be a while because the house is in desperate need of major repairs, among other major issues like the driveway was found to be sitting on the neighbor's property (the builder's did not heed the property survey lines).....and my other question would be whether there is a chance that they could say it's not worth their time and write it off and leave it in our names forever (forget the legal terms for that)?

Edited July 22, 2015 by doodlebugger

[doodlebugger]

Also wanted to add that the bank has now informed me that they have cancelled any homeowner's insurance on the house, and that it is currently not covered, and since the property is still in our name, we are liable. They cannot tell me why the policy was cancelled either. No one seems to know anything. Could this be one of those zombie foreclosures?

I mean, if they cancelled the insurance, then they likely won't pay the taxes either this year? Or will they?

 

They told me to call the foreclosure law firm, but no one there will take my call, they won't return messages, and they won't return emails. I have talked to the foreclosure support team and now I'm on hold with the insurance department at the bank. They all say they don't have any supervisors or other higher ups to talk to about this.......

[doodlebugger]

Last update for the day....after being put on hold for over 45 minutes by the insurance department, I finally hung up. I have now opened a complaint with the bank's executive escalations department in hopes to resolve this issue.

[IndyPoolPlayer]

If nobody pays the taxes and it goes to tax sale that is one way to get it out of your name.