home surrender

[yak411]

I called my attorney yesterday to discuss the surrender of my home. My new place will not be ready until May 1 so I will surrender at that time. I asked about the process from there and was told this.
I will go in a sign papers to modify my plan and to notify the mortage company of the surrender. The mortgage company will send there own paperwork signed to accelerate the process with the court. The mortgage company will take possession and sale the property from there. Am I missing something? I have read other post which sound like a surrender of the property leads to the foreclosure process but I am being told something different than that. My attorney is acting like it won't be like a normal foreclosure because I am relinquishing the property.

[yak411]

Any ideas anyone??

[AriGold]

This surrender will stop the foreclosure. Ultimately the lender has to accept your surrender (i.e., Deed-In-Lieu of Foreclosure) in which case this will stop the foreclosure. However, if they do not, then the home will be foreclosed on. Either way they will get the home back, but it will be cheaper for them to take the home Deed-In-Lieu.

[yak411]

So it sounds like the paperwork that the attorney was talking about is actually the deed-in lieu of foreclosure paperwork...I will just sign the deed over. Well that would actually be smarter on their part. From that point, how long will it take for them to put the home up for sell? I will have a place for myself in about 6 weeks so I will not sign it over until then. I just want to know what happens next. My next door neighbor is concerned about the house sitting vacant.

[yak411]

Once I sign paperwork for the deed in lieu of foreclosure, how long until the bank sells it? Also, do I have to maintain the yard in the meantime?

[HHM]

It really is up to the bank how to proceed. The only thing in your control is modifying your plan and stopping mortgage payments.

At that point, it sounds like your attorney will try to expedite the process by stipulating to lift the automatic stay and at least suggest a DIL (note, if there is a 2nd mortgage, that mortgage must be with the same lender as the first, or else you have no shot at a DIL). Once the automatic stay is lifted, the decision to foreclose or accept a DIL is entirely the banks.

[yak411]

Wow! My attorney did not explain it to me like that at all. I do have a second mortgage, so I guess I will be responsible for the property until it forecloses. My attorney presented it as if I go in to sign papers, the plan is modified, the bank sends paperwork back over to sign off on, and I am under no further obligation. I stopped paying the mortgage March 1 and I begin paying for a rental home May 1. I am trying to figure out if I really need to move immediately. If the automatic stay is lifted, how much time until I need to be out?

[HHM]

Ok, I think we are talking past each other but saying the same thing

You can stop payment on your mortgage at any time and that acts as a de facto surrender...you are abandoning your obligation at that point. What the attorney is having you do is amend your petition to change your "statement of intention" to surrender the house and presumably to "stipulate" to the bank lifting the automatic stay. But that is where the path ends for you. Once the automatic stay is lifted, the bank will likely foreclose on the property (that is how banks take legal possession of the property ,and if there is a 2nd mortgage, foreclosure is the only way to extinguish the 2nd mortgage), but it is possible your attorney worked out a DIL, but I doubt it.

But, you will have no financial obligation to these banks nor do you have to move out ASAP. Depending on how long foreclosure takes, you could probably live in the house for 4-12 months before you actually have to move. In fact, you can stay in the house until the bank (or subsequent buyer) goes to the trouble to actually evict you.

[yak411]

Thank you HHM. If this is the case, I plan to meet with my attorny this week and complete the paperwork now rather than wait till I am gone. I will leave at some point in May. Sad that the house will sit empty for so long. I will have to hire someone to cut the yard until the process is over. Anyway, I am glad to have a back up home to live in!