Foreclosure after discharge question(s). Bank is BofA

[NotInMyPlace]

Almost exact scenerio here. It is now exactly 24 months since our last payment. Ch7 discharged in December 09. As of today, there has been no movement on the part of Bank of America towards foreclosure (no NOD filed yet). I have contacted BofA many times. We also received a letter stating that our loan mod was denied ... and we never applied for a loan mod. Our letter stated the same. Recently, we received a letter regarding their Cooperative Short Sale Program. Our attorney advised us not to waste our time and noted that BofA may, in fact, use participation in that program as an indication of our continued liability for the debt (not a formal reaffirmation but may be construed as taking some responsibility). His advice was/is ... let the house go.

BofA will not let us do a Deed In Lieu. We just want away from the house. We vacated the property on December 31, 2010 and notified BofA of that event (however, we still want the property left in good order and check on it at least every two weeks to be sure it's still in good condition and not vandalized).

[scooter6251]

When you see the extremely poor business practices and the total lack common sense the banks show with these foreclosures, he's not hard to understand how they helped create this mess so many are in today. In case after case I've read on this forum, most folks don't want to abandon the houses and let them fall into disrepair or worse, especially in FL where mold can quickly consume a house, or pools destroy themselves without maintenance. But we are not able to pay electric costs, lawn maintenance, pool service, etc. I'm guessing everyone who lost their house in BK would be very willing to give the bank a DIL. That alone would save thousands of dollars on each house. Then the houses could be listed, put under the care of the realtor and their resources, and eventually sold for MUCH more than they will bring a year or 2 later, sitting unattended, often even damaged. No matter what, the bank will eventually have to deal with the houses so why not when they will return the most.

[tobee43]

When you see the extremely poor business practices and the total lack common sense the banks show with these foreclosures, he's not hard to understand how they helped create this mess so many are in today. In case after case I've read on this forum, most folks don't want to abandon the houses and let them fall into disrepair or worse, especially in FL where mold can quickly consume a house, or pools destroy themselves without maintenance. But we are not able to pay electric costs, lawn maintenance, pool service, etc. I'm guessing everyone who lost their house in BK would be very willing to give the bank a DIL. That alone would save thousands of dollars on each house. Then the houses could be listed, put under the care of the realtor and their resources, and eventually sold for MUCH more than they will bring a year or 2 later, sitting unattended, often even damaged. No matter what, the bank will eventually have to deal with the houses so why not when they will return the most.

i can see what you say makes so much sense...however...get this...

our house is in foreclosure...has been for bout 3 years now...it is in fact an FHA ...had PMI.....underwater over 200k.......so why doesn't the bank foreclose so they can collect the deficiency from the PMI???

our best guess at this point is there may be a document problem...or....what??? the money is there for the bank to take from the insurance...we have no clue as to why chase does not foreclose already.....

and the kicker of it all is they, the bank MUST follow of course certain "guidelines" to collection the insurance from FHA....one of which is the sheriffs sale....and the bank just will NOT budge!!

we have filed complaints to no avail...at first pressing the issue we just wanted our names off the deed...but now, we don't care...we just closed on our new house on the 15th of this month...found a 100% financed home and i can care less about ever using another bank for a mortgage again....LOL!!!!! since the ONLY box ever coming out of this house is with ME in it..

[ssc2761]

Ok I said I would post again after talking to BofA. I spoke with the specialist who basically advised me of the 2 short sell programs: 1)HAFA or Home Affordable Foreclosure Alternatives program. 2) Cooperative Short Sale program. The main difference I see is that HAFA requires you too submit alot of paperwork upfront like tax returns and pay stubs, which I am not willing to waste my time on. With the Cooperative program, you just sign an Acknowledgement of Interest and then i don't know how they determine your qualified from there. I did some research on the 2nd program and asked our BK attorney as well. The BK atty. said if we want to obviously get rid of the house quicker then a short sale would make sense or a DIL. Problem that I have is the Co-op short sale program states the investor may require the right to pursue deficiency. The specialist on the phone advised me I am protected by the BK surrender of this property and so they couldn't come after me for any deficiency between the loan and what the house actually short sells for. In my case, this home won't short sell because no one is buying homes in my area even though they are worth 50% of what we paid for it. Then after 120 days I can DIL. Now, I would have to let BofA appraise the home so they can approve a sales price and then I would have to get my own agent to try and sell it within those 120 days. I don't know at this point if I should just let it foreclose or try to do this program to speed up the process. BofA hasn't even filed a NOD yet in my case and last payment was 2/2009. Don't really know what to do, but at least saying yes to the program couldn't hurt I guess. Sorry about rambling on, but its a lot of information. Also what was interesting is the impact on your credit as per some research I did states: Credit impact is typically less than a foreclosure – deficiency charge off will be reported to credit bureaus. All this stuff is so confusing I want to pull my hair out.

[aaskybabe]

Well my husband and I have decided we will not pursue either the DIL or the Fannie Mae Deed for Lease. (Its just doesn't seem to offer many benefits for us...) BofA is offering a DIL, a Fannie Mae Deed for Lease (Which is required to be offered by Fannie Mae not Bof A), a short sale or a Forebearance program. That last one is hilarious considering the mortgage was included in our discharge. Of all the otpions offered the Fannie Mae Deed for Lease is the best option of the 4... although it's only a 12 month lease. And I'm fairly certain BofA won't get around to foreclosing on the house within 12 months. So I really would rather save the money instead of paying rent. Since this is a business decision for BofA I am going to keep it a business decision for us too not an emotional one. The smart thing is to let it go into foreclosure. I also think Bof A will lie, cheat and steal to get us to pay the rest of the mortgage...even though it was discharged!!

When you see the extremely poor business practices and the total lack common sense the banks show with these foreclosures, he's not hard to understand how they helped create this mess so many are in today. In case after case I've read on this forum, most folks don't want to abandon the houses and let them fall into disrepair or worse, especially in FL where mold can quickly consume a house, or pools destroy themselves without maintenance. But we are not able to pay electric costs, lawn maintenance, pool service, etc. I'm guessing everyone who lost their house in BK would be very willing to give the bank a DIL. That alone would save thousands of dollars on each house. Then the houses could be listed, put under the care of the realtor and their resources, and eventually sold for MUCH more than they will bring a year or 2 later, sitting unattended, often even damaged. No matter what, the bank will eventually have to deal with the houses so why not when they will return the most.

On another note, scooter6251, you are right it would make sense for the banks to take over the houses to limit damage. But that is an emotional response. Not a business response. There was an article in the St. Pete times about how the yearly cost to maintain a house a bank had foreclosed on averages $50,000 a year(depending on property management fees, HOA fees, Taxes, insurance, house maintenance, etc.)...so why would the bank want to hurry up and foreclose when they would be resposible for all the fees and maintainence of the house? They wouldn't. So they wait.

[tobee43]

just found this as an update to the B of A situation with foreclosures...and credit....HATE THEM!!!!

Related News:Law .Bank of America, Foreclosure Accord, Card Access: Compliance

By Ellen Rosen - Feb 25, 2011 7:39 AM ET

Bank of America Corp. won dismissal of claims by investors that it misled them about the liquidity of its auction-rate securities and manipulated the market for the investments.

U.S. District Judge Jeffrey White in San Francisco said in an order yesterday that investors could renew market- manipulation claims if they added more information to their complaints.

Investors who bought auction-rate securities from 2003 to 2008 sued Bank of America in 2009 on claims that the products were offered as safe, cash-like investments while the company hid their risks. Banks running periodic auctions abandoned the $330 billion market for the securities in 2008 amid the fallout from the subprime market slump and investors were stuck with them.

Bank of America, based in Charlotte, North Carolina, agreed in October 2008 to buy back $4.5 billion in auction-rate securities from investors and pay a $50 million fine in agreements with the U.S. Securities and Exchange Commission and then New York Attorney General Andrew Cuomo.

Plaintiffs in the case pending in federal court in San Francisco haven’t benefited from the settlement and continue to hold the securities or sold them at a loss, according to White’s ruling.

Dan Girard, an attorney for investors, didn’t immediately return a voice-mail message seeking comment.

The case is Bondar v. Bank of America, 08-02599, U.S. District Court, Northern District of California (San Francisco).

Compliance Action

Regulators Said to Push $20 Billion Foreclosure Settlement

U.S. regulators probing flawed and illegal mortgage- foreclosure practices may try to extract $20 billion of penalties in a settlement with banks that serviced the loans, according to two people briefed on the talks.

Terms of the potential accord, from regulators led by the Treasury Department and the Department of Housing and Urban Development, haven’t been formally presented to banks, according to the people, who spoke on condition of anonymity because the discussions aren’t public. Lenders embroiled in the investigation include Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co.

The government originally floated a $25 billion penalty, which banks rejected, one person said. Banks are resisting a large settlement because while regulators have found widespread flaws and violations in documents and procedures, the federal agencies said they so far have uncovered few examples of wrongful foreclosures.

Regulators are weighing whether the settlement should require servicers to write down mortgage principal that would lower home-loan payments for distressed borrowers, the person briefed on the talks said.

Details of the settlement talks were reported earlier in the Wall Street Journal.

Mortgage servicers drew scrutiny from federal bank and housing regulators and state attorneys general after evidence emerged in court cases that banks and their contractors submitted flawed or illegal paperwork in hundreds of thousands of foreclosure cases.

The so-called robo-signing scandal has slowed foreclosure and bankruptcy cases, clogged state courts and prompted a review of major financial companies.

Officials from HUD and the Office of the Comptroller of the Currency have said publicly that regulators may announce fines against servicers in the coming weeks.

SEC Lawyer’s Role in Madoff Case Questioned by Lawmakers

U.S. House Republicans asked Securities and Exchange Commission Chairman Mary Schapiro to disclose details of the participation of the agency’s chief lawyer in the investigation of Bernard Madoff’s Ponzi scheme.

The SEC said yesterday that the agency’s departing general counsel, David M. Becker, didn’t recuse himself from the Madoff probe after he and his brothers inherited about $2 million in 2004 from their mother’s investment with the jailed financier.

Becker sought an opinion from the SEC’s ethics office “shortly after his return to the agency in 2009” about the family Madoff account, John Nester, an SEC spokesman, said in a statement. The ethics office told Becker he didn’t need to disqualify himself from “participation in certain Madoff- related matters,” Nester said.

Becker said on Feb. 23 that he learned through a summons last week that he and his two brothers were sued in bankruptcy court in New York by Irving H. Picard, the trustee liquidating Madoff’s firm, who seeks to recover $1.5 million of the inheritance as a “fictitious” gain.

House Financial Services Chairman Spencer Bachus and three senior members of his panel sent Schapiro a letter yesterday requesting information on any meetings between Becker and Madoff, as well as whether he prepared “any legal memoranda, or provided counsel to any SEC employees about any matters” involving Madoff’s firm.

The lawmakers also asked for information and documentation about Becker’s involvement in the Madoff case, including “all meetings with the Department of Justice, the Securities Investor Protection Corporation, Mr. Irving Picard or any Madoff victims.”


read on...interesting!

http://www.bloomberg.com/news/2011-02-25/bank-of-america-foreclosure-accord-card-access-compliance.html

[ssc2761]

Update: Ok finally spoke with BofA again. They stated in writing that if I participate in a Co-Op short sale, then they will not pursue any deficiency and will give me $2,500 even though I don't live there anymore. It is a new program that only started end of last year. If the home doesn't short sell within 120 days from listing, then they have also agreed to DIL at that point so I'm not left hanging. If DIL occurs, then I still get the $2,500. The Co-Op program also does not require me to turn in any paperwork such as tax returns, wage statement, etc.... This new program just requires an Acknowledgement of Interest form that indicates I want to attempt the short sell. Then I hired a realtor who then works with the BofA rep. BofA will send appraiser to meet the realtor at the house, and then set the price the house will be put on sale for. At that point the realtor will list it and then we just wait. I will update once realtor lists the home. In speaking with the realtor, he was aware of this program and he advised me that BofA will in fact do the DIL if it doesn't sell. I feel a bit better, but will wait to see what happens.

[JacaG]

I am waiting a call back from BofA about the same program. Do you have to find your own realtor or do they have realtors they work with?

[ssc2761]

You do have to find your own realtor. I found one on realtor.com where you click on Find Realtors. You just enter your address and then I recommend choosing SFR as the certification, which stands for Shortsale and Foreclosure Resource. Hope this helps.

[JacaG]

Thanks that does help.

[Inca]

Hey...

I understand the getting $2,500 part (who wouldn't want to get $2,500) but I don't understand why they are saying they won't come after you for any deficiency. They can't do this anyways since your mortgage was discharged in your bankruptcy. I assume you know this, right? So the only way a short sell will benefit you is that you will be getting $2,500, other then that they won't be able to get anything from you if you decided to up and walk away from your home today if your mortgage was included in your bankruptcy.

[LookingFrwrd]

What about fees for the realtor?? Won't you have to pay those? Also, are you in a judicial foreclosure state?? We were told by BofA about the same program as a 'quicker' way to get the foreclosure done but our house is in Illinois, which is a judicial foreclosure state, and I'm afraid of what now trying to do a short sale/DIL arrangement with BofA would do the Judgement of Foreclosure that the county court granted us WAY WAY WAY back in September of 2009.....??? BofA said "oh no, that's no problem" but since they don't know what they are talking about 99.9999999% of the time, I'm a little afraid to believe that!

[ssc2761]

I am not trying to do the Co-Op short sell for just the $2,500.00. It is a way to get the house out of my name a lot quicker either via short sell or DIL. If I just sit around and wait, who knows when the sheriff's sale will take place and who knows if it even sells at that point. I want the clock to start to be able to buy again or even refinance if it was justified in a few years. Realtor fees are payed out of the purchase price anyway and not out of my pocket, so I am not worried about that part. The house was listed a week ago, so I will see what happens with it.

[ssc2761]

UPdate: BofA of course appraised the house way too high and my realtor said he will just list it at their price and try to adjust it when no offers come in within the first few weeks. Our loan is $323,000 and the house is listed for short sell at $183,000.00. Comparable homes in the area sell between $160-$175k, so if we hope to sell it, BofA has to accept an offer a little bit lower. Otherwise at the end of 4 months, or at some point in July, we can do a DIL. At least the home is out of our names quicker, they won't come after us for deficiency(which they could not do anyway since we were discharged), and CA is not a judicial foreclosure state either. So either way, its a win-win for us, since home will be out of our names. Hopefully it short sells, because I believe we can get another loan/refi 2 years from then vs 3 yrs for a foreclosure. I will update again if we get offers or what the outcome is for all this.

[SleepWellNow]

We are also in the Coorperative Short Sale program and in California. We are a little ahead in the process than you are. When the appraisal came back and BofA set the listing price, we thought it was high and we'd be in the house rent-free for a bit longer. The negotiator even told me they would probably accept less than the listed price so send in whatever offer we got. Wouldn't you know it...the first person who saw the house put in a full-price all-cash offer. This buyer has some personal reasons why they specifically want our house and are willing to pay above market for it. Because it is a cash offer, an appraisal doesn't need to be performed to justify the price. The second person to see it put in a back-up offer, although much lower in price. Our agent has sent the first offer to the negotiator and we are waiting to see what the next step is. This certainly is going much faster than I thought it would. Of course, once in escrow, the buyer will still have to do their inspections and make the decision to proceed. Now we wait...