Yet another question - RE:Foreclosure

[DivorceRuinedMe]

I have a house that I plan to let go in the bankruptcy. I tried to sell it and it didn't sell. I even looked into a deed in lieu and a short sale and nothing panned out. It was a house that my ex-husband and I lived in and I got in the divorce. He lived in it until it was final and has since moved out. I've been out of it for almost a year now and I don't want to move back to it. I have since bought another house that I will be reaffirming (or continuing to make payments to) after the bankruptcy. I am planning to let the old house go to foreclosure as I cannot pay for it and I cannot rent it out either for what I owe each month on the mortgage. And besides - it's an asset for bankruptcy purposes so it needs to go one way or another.

Anyway - on to my question. My taxes and insurance are included in my mortgage payment. What happens when i stop paying the mortgage? What happens to the insurance company and the taxes not getting paid? Pardon me if I sound stupid but the payments I'm paying now are for what year for the taxes and insurance? If I stop paying the mortgage and the insurance isn't getting paid and something happens to the house, then what can happen to me? I also got a letter from the insurance company saying that my address has changed and is this house still my primary residence and if it's not I need to send them a letter to cancel the policy. I'm so confused. Would they just become creditors after the bk? I've called my atty but he hasn't gotten back to me yet about this. I think he's on vacation this week.

[BKOnce]

1. Every month, lenders take out some $$ from your payment put into reserve escrow to pay for ins + tax.

2. If you stop, they stop too.

3. Ins + Tax this year still incurred, they send bill to lender and/or to you if lender don't respond/pay to it.

4. If you ignore, your county government will put lien/condition on house, therefore can not sell/clear title. Tax incurs every year & will change hands to new owner/lender if sold.

5. If you don't cancel policy, insurance will also bill you and automatically cancel/void it at expiration date or asap if bill not paid after grace period this year.

[DivorceRuinedMe]

So, if the house is getting foreclosed on, then do I care if a lien is put on the house? I don't care what happens to it at this point, I just want it gone.

If I cancel the insurance, what are the ramifications of that?

[SinkingFast]

If you have been continuing payments for a while since taxes or insurance was paid, there might be some money in your escrow. That's the way it worked for us.

The Lender didn't figure our Escrow into their numbers. We went into Foreclosure and got a last minute buyer. After the dust settled, out of the blue, we got a check back. It was the funds remaining in our Escrow acct.

What year you're paying on depends on where you live. Our taxes were paid in December for that year. Billing in 12/05 was for '05 taxes. Some States/Counties run a year or 2 in arrears. Some bill for the next year coming. So it's really gonna depend on where the property is.

About the insurance,........... You wanna be sure to keep coverage on the property to safe guard you against liability. If someone walks onto the property, falls and and hurts themselves, you want to be sure you're protected.

What State is the property in??!! Maybe we can help give you some idea of how long the Foreclosure process is.

[DivorceRuinedMe]

If you have been continuing payments for a while since taxes or insurance was paid, there might be some money in your escrow. That's the way it worked for us.

The Lender didn't figure our Escrow into their numbers. We went into Foreclosure and got a last minute buyer. After the dust settled, out of the blue, we got a check back. It was the funds remaining in our Escrow acct.

What year you're paying on depends on where you live. Our taxes were paid in December for that year. Billing in 12/05 was for '05 taxes. Some States/Counties run a year or 2 in arrears. Some bill for the next year coming. So it's really gonna depend on where the property is.

About the insurance,........... You wanna be sure to keep coverage on the property to safe guard you against liability. If someone walks onto the property, falls and and hurts themselves, you want to be sure you're protected.

What State is the property in??!! Maybe we can help give you some idea of how long the Foreclosure process is.

The sunshine state, Florida - LOL. It hasn't been so "sunny" for me.

[lostinmich]

About the insurance,........... You wanna be sure to keep coverage on the property to safe guard you against liability. If someone walks onto the property, falls and and hurts themselves, you want to be sure you're protected.

At what point is it safe to assume that one would not be liable? After the sheriff's sale? Redemption period? Discharge of ch 7?

[SinkingFast]

At what point is it safe to assume that one would not be liable? After the sheriff's sale? Redemption period? Discharge of ch 7?

I don't know when you could safely let insurance lapse. We didn't get into that far in the process, thankfully. We sold our house about a month before we were due to renew our coverage and about 3 months before we filed BK.

As we were Consulting around, every attny asked about insurance on the house. They all told us to be sure to keep the insurance current so we were covered for liability.

The State our property was in has rather funky Redemption rules. If the Lender buys the house back, the owner can't Redeem. If the owner wants to Redeem, they have to declare 10 days in advance of, or at the Sale. Then, you only have 20 days to execute the Redemption.

When we thought the house was gonna Foreclose, I did ask our attny about our insurance situation. Our coverage would have remained in effect for a couple of months after the Sale. Our attny said to leave the standing insurance in place but when it came time to renew, not to.

I don't know if that info will help or not.

[SinkingFast]

The sunshine state, Florida - LOL. It hasn't been so "sunny" for me.

Florida is a Judicial Foreclosure State with a typical timeline of 180 days.

http://stopforeclosure.com/Florida_Foreclosure_Law.htm

There is no "Right of Redemption" and the Sale is usually declared final within 10 days.

[DivorceRuinedMe]

Florida is a Judicial Foreclosure State with a typical timeline of 180 days.

http://stopforeclosure.com/Florida_Foreclosure_Law.htm

There is no "Right of Redemption" and the Sale is usually declared final within 10 days.

Pardon my stupidity but what does all that mean?

[lostinmich]

Pardon my stupidity but what does all that mean?

The "right of redemption" is a period of time in which the homeowner has a chance to "buy" the house back from whomever purchased it at the auction. Here in Michigan we have a 6-month 'right of redemption' which means I have 6 months to pay the loan off plus any incurred fees to whomever bought the home. Once that period passes, whomever bought the place can now initiate eviction procedures. There are instances however where the home can be deemed 'abandoned' and the 'right of redemption' is then reduced to 30-days.