how to get rid of my stupid house...

[truckerswife]

We moved out of our townhouse in October. Yesterday we got notice from USAA that our homeowners insurance was being canceled. The reason being that it was no longer owner occupied and that it made it a much larger risk. We have not made a payment on the house in almost 2 years. We moved out in October because we received notice that the stay was being lifted. I check the court site daily (and sheriff listing) and there is still no mention of our home being foreclosed on. Is there anything else we can do to get rid of this place? Insurance is going to cost me an arm and a leg. We can't sell it. We owe about $85,000 and it might get $70,000 (though I really doubt it).

[optimistic1]

You should have did a deed in leiu of foreclosure along time ago, maybe you still can.

[DeadManCrawling]

You cannot legally force the bank or lender to foreclose or accept a deed in lieu.

This is an increasing occurrence as lenders and banks can avoid being responsible for these properties until they are ready and willing. That could be a very long time.

One property I am aware of in our county has been in limbo for 6 years, unoccupied and unforeclosed.

One debtor filed a motion with his BK judge, asking to force the lender to foreclose quicker. He lost. There is no legal method to force someone to take back their house, even if you really want them to.

The benefit to the lender is that you, the borrower, continue to be on the hook for everything from insurance, HOA fees, damage or injury liability, and in many cases, repairs, and suits by the county or city for things like overgrown weeds and other code violations.

Lenders can save a LOT of money, when they have, say, 100,000 properties that they are NOT foreclosing on. It adds up, and is becoming more prevalent. If the average cost of maintaining that many properties were $200/month (sounds conservative), that would be $20 million per month, right? Big money.

I think we will see more and more of this as the housing crisis widens. At this point about 50% of foreclosures involve PRIME borrowers with fixed-rate loans, who are realizing they will be upside-down or underwater for the next 15 years. On a business level, it makes no sense for them to keep these inflated properties.

And many of those prime loans have much much higher costs in HOA fees and insurance. How many of us have a HOA that is more than $500/month? Most newer neighborhoods, I think. For the higher-end, probably even higher. One I live near has fees of $1500/month. Thats HOA only.

This is gonna get very expensive for SOMEONE and the banks are trying to make sure it is you and me, not them.

[optimistic1]

You are correct.

In order to be considered a deed in lieu of foreclosure, the indebtedness must be secured by the real estate being transferred. Both sides must enter into the transaction voluntarily and in good faith. The settlement agreement must have total consideration that is at least equal to the fair market value of the property being conveyed. Sometimes, the lender will not proceed with a deed in lieu of foreclosure if the outstanding indebtedness of the borrower exceeds the current fair market value of the property. Other times, lenders will agree since they will end up with the property anyway and the foreclosure process is costly to the lender.

Because of the requirement that the instrument be voluntary, lenders will often not act upon a deed in lieu of foreclosure unless they receive a written offer of such a conveyance from the borrower that specifically states that the offer to enter into negotiations is being made voluntarily. This will enact the parol evidence rule and protect the lender from a possible subsequent claim that the lender acted in bad faith or pressured the borrower into the settlement. Both sides may then proceed with settlement negotiations.

Neither the borrower nor the lender is obliged to proceed with the deed in lieu of foreclosure until a final agreement is reached.



I personally would have mailed the keys to them and wrote them a letter, they would have got the hint, and either accepted or accelerated the foreclosure process. I dont see the benefit of just not doing anything at all for a whole 2 years, that sounds a bit unusual.

[EverHopeful]

Deed in Lieu

You should have did a deed in leiu of foreclosure along time ago, maybe you still can.

Can you do a deed in lieu rather than foreclosure ,then file chapter 7? I don't think I can do a deed in lieu since I have a first mortgage and a Heloc.

I plan on giving the first mortgage holder Wells Fargo the keys when I move out ,then file chapter 7 at about the same time.

[optimistic1]

Yes, as longer as the lender agrees, which most likely would be the case, even if the market value is less than what you owe, because the foreclosure process is more costly to the lender. And just in case they try to sue you for the underwater balance, which would be secured by nothing at that point, you could file a 7 and rid yourself of the debt. Not sure about the HELOC, I really have no knowledge of those.

[EverHopeful]

Thanks optimistic1.

As for the Heloc, the 2nd , the equity line , i wonder if I can discharge that with a ch 7 , presuming that the 1st mortgage agrees to a deed in lieu?? Any one knows if this is possible?