After Discharge-Abandon or Wait for Foreclosure

[NoMoreRed]

Here's a brief history....

- Discharged 4/3/09.
- Home included in BK (did not reaffirm).
- Wife lost job and we decided to walk from the house in May.
- Last payment was on 3/30/09.

What I am wondering is....

Is it best to notify the mortgage company that we have moved and abandoned the property? Why?

or

Is it best to wait until the mortgage company forecloses on it's own? Why?

What would the pros & cons be in either situation?

We know it would have been best to stay in the house until they forced us out, however, the AC died and required $6500 to replace it. There would be no way to make it through the summer in AZ without it and we did not want to throw any good money at a bad investment. We tried for over a year to get a modification and never got anywhere with Countrywide/BofA.

[LSUTiger32]

Well if there is no AC and you obviously need it to survive, you have to move on and rent something with some nice cold AC. Normally I would say stay in it until they throw you out so that you could stockpile cash but in this case you need a safe place to live.

[NoMoreRed]

Well if there is no AC and you obviously need it to survive, you have to move on and rent something with some nice cold AC. Normally I would say stay in it until they throw you out so that you could stockpile cash but in this case you need a safe place to live.

Already moved in May.

My question/concern is more geared toward how it is best to handle the home now that we moved. Notify the mortgage company that we have abandoned the property or wait for them to forclose on their own? It has been 4 months since the last payment.

[bkmaggster]

Is it best to notify the mortgage company that we have moved and abandoned the property? Why?

or

Is it best to wait until the mortgage company forecloses on it's own? Why?

In my opinion it doesn't matter, you are no longer responsible for the house. In consideration of your neighbors you can keep the yard up.

The bank will probably find out on it's own when you have abandoned the property. I think they check postal info - they put up a notice on the door within a month of our home being abandoned.

I don't know what the advantage would be to letting the mortgage company foreclose first, hopefully someone else will have info on that.

[NoMoreRed]

In my opinion it doesn't matter, you are no longer responsible for the house. In consideration of your neighbors you can keep the yard up.

The bank will probably find out on it's own when you have abandoned the property. I think they check postal info - they put up a notice on the door within a month of our home being abandoned.

I don't know what the advantage would be to letting the mortgage company foreclose first, hopefully someone else will have info on that.

We do still keep the property up. Our neighbors on all sides are our best friends so we wouldn't have it any other way.

I believe that we are fully protected with our BK in either situation, but just would like some other opinions from anyone that may have gone through a similar situation.

[LSUTiger32]

We do still keep the property up. Our neighbors on all sides are our best friends so we wouldn't have it any other way.

I believe that we are fully protected with our BK in either situation, but just would like some other opinions from anyone that may have gone through a similar situation.

Sorry I mis-understood. The property is no longer yours so I wouldn't worry about it either way. It was IIB and you are done with it. I hope by keeping it up you simply mean maybe cutting the grass just for the sake of your neighbors. Other than that, I would call them and tell them you are out and that the property is their responsibility now. If the upkeep isn't done the neighbors can file a complaint with the city against the owner of the house, which happens to be the bank now.

I'm confused about the foreclosure part though. You IIB, they cannot foreclose from what I understand. I am sure one of the reasons you filed was to fend off a foreclosure.

[slam22]

One thing to add is that if Bank of America has not gone through the foreclosure process yet on your property then you are still responsible for any damage that occurs to it. In other words make sure you maintain your homeowner insurance until the bank actually take title back.

[staytogether]

I'm confused about the foreclosure part though. You IIB, they cannot foreclose from what I understand. I am sure one of the reasons you filed was to fend off a foreclosure.

I'm still learning about all this, but from your post, it sounds like that if your mortgage is IIB, when the bank takes back the house, it's not a foreclosure on your credit? I thought it was. Can someone clear this up for me?

[NoMoreRed]

One thing to add is that if Bank of America has not gone through the foreclosure process yet on your property then you are still responsible for any damage that occurs to it. In other words make sure you maintain your homeowner insurance until the bank actually take title back.

The homeowner's insurance is still intact.

I'm still learning about all this, but from your post, it sounds like that if your mortgage is IIB, when the bank takes back the house, it's not a foreclosure on your credit? I thought it was. Can someone clear this up for me?

I'm confused about the foreclosure part though. You IIB, they cannot foreclose from what I understand. I am sure one of the reasons you filed was to fend off a foreclosure.

I believe they still have to foreclose as this is the legal process they have to go through in order to take over the property. Our attorney told us not to worry about the foreclosure showing as it will not be a big issue since it was part of the BK.

[Chowder]

My understanding is, that anything not reaffirmed is no longer a liability.

So when one decides to stop paying on the car or house, there is no repo or foreclosure, added to the credit report. They are covered under the BK.

[NoMoreRed]

To be more specific....

If I tell the mortgage company we have moved out of the property (abandoned in their terms), can they try to reopen our BK case?

I know that since they would not reaffirm the loan and the discharge has been granted then we have no more liability.

[Chowder]

....can they try to reopen our BK case?.

Don't know on how. You're discharged. You don't owe them a dime.

[staytogether]

I have one more question, if down the road I get asked if I have ever had a foreclosure on my credit, do I have to say yes even though it was included in the bankruptcy?

[Chowder]

Good question.

I'm guessing anyone who asks that is going to pull a credit report anyway.

Also, I'd be interested in seeing how the BK reads on a credit report. How surrendered property is reported.

[bkmaggster]

One thing to add is that if Bank of America has not gone through the foreclosure process yet on your property then you are still responsible for any damage that occurs to it. In other words make sure you maintain your homeowner insurance until the bank actually take title back.

In our case, once the bank found out we abandoned the house, they put their own policy on the house and billed us for it. We included that in the BK as well.