What happens if my home doesn't sell at Sheriff's Sale?

[Chazlyn]

I finally got notice that there will be a Sheriff's sale on my home on
Sept. 7th!!

But my question is, what if my home doesn't sell at the Sheriff's sale? The debt has been discharged, so I'm not worried about re-paying any difference. My concern is, when will the house be out of my name? I highly doubt it will sell, so does the bank take possession of the property if it doesn't sell?

I can't wait to finally put this behind me and truly move on from this house!!!

[justbroke]

It will be sold. Usually it goes to the Bank and becomes what's known as an REO property (Real-Estate Owned -- by bank).

[ccaplinger]

If it doesn't sell it will go back to the bank.

[justbroke]

It actually technically still gets sold, even when it goes back to the bank. That's known as REO or Real Estate Owned property. It is this way because foreclosure, in all States that I know of, require a sale.

[Chazlyn]

Thanks everyone for the info!! I just want this thing out of my name and my life forever already! I am still paying $97 a month to insure it. Can't wait to kiss it GOODBYE!!!

THANKS AGAIN!!!

[ej822]

Why are you paying insurance?

We're filing Ch7 and giving up our home. It's not worth anywhere near what our payments are in this market and we don't want to struggle to make payments any longer (our income has been reduced by approx 15K/year for the last 18 months and we had a second child - it's definitely been tough).

Our insurance is paid through escrow by the lender. Do we need to take that payment over until we foreclose?

[Flamingo]

We're filing Ch7 and giving up our home. It's not worth anywhere near what our payments are in this market and we don't want to struggle to make payments any longer (our income has been reduced by approx 15K/year for the last 18 months and we had a second child - it's definitely been tough).

Our insurance is paid through escrow by the lender. Do we need to take that payment over until we foreclose?

If you stop making mortgage payments you also stop making escrow payments so therefore the lender will not pay the next insurance bill when due. It would be to your benefit to contact your insurance agent as to how to handle that as the bank right now will have funds in escrow for your insurance depending upon when the last insurance bill was paid by them.

[ej822]

I guess I still don't understand the benefit of homeowner's insurance if your debt on the property has been discharged and you're foreclosing. It seems the only benefit that it would cover what is INSIDE the property in the case all you own was stolen or damaged by fire? Is there something I'm missing?

[justbroke]

The reason to keep "liability" insurance on the property is in case of an accident on the property. Physical loss or damage to the property is not your responsibility once the debt discharges (unless, of course, you did something illegal to cause the loss). However, liability doesn't just go away with a discharge.

The person who is legally responsible for the property, is liable should an accident occur. Your legal responsibility doesn't get removed until the title changes.