Ch7, kept house and walked out of it later...

[JasonK94Z]

We filed Ch7 and kept our house. Countrywide did not reaffirm.
I later got a better job in another state, so we just packed up our stuff and walked away from the house. I called Countrywide and told them what we did. I spoke withe bk dept too. They said no problem, and it would just got through the forecloser process. I also cancelled our homeowners policy, so countrywide then turned around and insured it through their insurance. Its 3 months later, and I'm still getting statements from them about how they paid my homeowners insurance that they provided with my escrow account which had a negative balance to begin with. This is running my escrow into the negative territory by a couple thousand bucks now.

Whats in it for them to keep running my escrow account into the negative teritory like this?
Will this come back to haunt me later?
I should be free and clear of all of this right?

[AngelinaCatHub]

If you did not reaffirm, and you told them about you have abandoned the place, it should not. However, they are charging you after your bk and they may 'have' some legal recource. You need to document closely the timeline. Ask your lawyer please.
'Hub

[itneverends]

We filed Ch7 and kept our house. Countrywide did not reaffirm.
I later got a better job in another state, so we just packed up our stuff and walked away from the house. I called Countrywide and told them what we did. I spoke withe bk dept too. They said no problem, and it would just got through the forecloser process. I also cancelled our homeowners policy, so countrywide then turned around and insured it through their insurance. Its 3 months later, and I'm still getting statements from them about how they paid my homeowners insurance that they provided with my escrow account which had a negative balance to begin with. This is running my escrow into the negative territory by a couple thousand bucks now.

Whats in it for them to keep running my escrow account into the negative teritory like this?
Will this come back to haunt me later?
I should be free and clear of all of this right?

I think you may have a problem. You did not reaffirm your mortgage, which was discharged, but I think the insurance is going to be considered "new debt" incurred post BK. Until they foreclose, the property is still yours and they are going to try and you you responsible for this new debt.

[Help!]

When you say you "kept the house", you mean that you continued to keep living in it. You didn't reaffirm the mortgage and that account is IIB, right? If so, the lender will follow exactly the same steps in foreclosing as if you hadn't declared BK. They'll continue to add in their fees, insurance premiums, tax payments, etc., and this will of course make the deficiency larger when the house is sold at auction. By declaring BK, however, you have protected yourself from any kind of deficiency judgment. You are not required to insure the property.

The lender will continue to send these statements and to add in all of the expenses they're incurring in the process of foreclosing on the property... not because they're going to be able to hold you responsible, but for accounting purposes. At the end of the process, they're going to be writing off their losses and it's to their advantage to include every dime they've spent.

I am not a lawyer, though, so if you have a good one you should ask them. Ours didn't give us any information at all, and didn't explain to us that there would be a foreclosure even though we declared BK. In general, BK attorneys seem to be pretty clueless about the process. I get the feeling that until now, people just didn't surrender their homes in BK. It wouldn't have made sense before, but now it seems *everyone* is upside down and many are worried it'll be their only chance to get out from under their homes.

[JasonK94Z]

Your right on with that post. I won't be responsible for anything apparently.

It was our time to walk away. I found a new job that got me a promotion and a 25% raise. It required us to move, so we did just that. I at least had the courtesy to call CW and let them know about it. They were very cooperative, and their bk dept seemed to know how to handle it all pretty well. We were way upside down in our house. By a good $20k.
It hurts knowing I no longer own, but we found a brand new place to rent that is just as nice. I know in 2, oh wait, just 1 yr and 1 month that FHA will loan us a mortgage. Life has been great since we got the courage to leave that house behind us and move on to a better job and a different place to live. Free at last

[PoorGrammyinBK7]

This is interesting to me, as we are coming close to discharge (Ch 7) and have not reaffirmed our condo (or our cars). We were going to, but the condo, with recent market downturns, is worth less than we owe. Yet its cheaper for us to stay here right now than find a place to rent and move. So we had hoped to "ride through" and maybe sell later.

But, if the market gets worse, I really would like to know what happens if, after BK, you choose to "walk away" from the house later - in 6 months -- in a year -- in 2 years?

Anyone who has any experience with this? If so, I'd appreciate some testimonials on how it actually played out! By the way, our mtg (and car loans) are with a Credit Union.

Thanks

[yeahdischarged]

We did the same thing. We did not reaffirm, and continued to make the payment for over a year after discharged. But, other financial issues crept in and we were unable to make our payment. (Having too much house was a factor in the chapter 7 filing in the first place, but we tried to swing it as long as we could.) While looking for a cheaper place to live (rent), we received a job out of state and decided to move. We ended up living in that home without making a payment for 6 months.

In the 6th month, we received the other offer and notified the lender. They were very cool - knew just what to do. Home was sold at sheriff's auction after their foreclosure procedure. Since our insurance had been paid at the beginning of the year in full (from the escrow funds), we did not cancel insurance until after the sheriff's auction. We did get several hundred refund, which was nice.

And one of the biggest worries, possible misconceptions: people state that if you walk away later, that it will be considered a separate event and classified as a foreclosure on your credit report. Ours was not. It did NOT get entered as another public record. (How could it, we didn't legally own the home.) I think these are things that are fleshing out over time.

This was actually the 2nd home we lost in the same bankruptcy through foreclosure process. We owned one at the beginning in an other state. That home also went through the foreclosure process, did not get entered as a public record, did not get entered as a separate foreclosure. Both homes are listed as IIB, which is what they were.

We found a great home to rent in our new area, had no problems getting approved, and have truly had a fresh start with our lives. The only question I have is - if I ever want to purchase a home again (but certainly not in the near future with all the market mess), how will the lender look at this to determine the 2 years after discharge for FHA?

Yes, the home eventually went through the foreclosure process. But it was IIB - included in bankruptcy. It does not show foreclosure on the credit report and we did not legally owe anything on it when we gave it back to the bank. Time will tell, I suppose.

Oh, and had we not moved out of state, we could have lived in that home 8 months "free" before the auction. It took that long. As it worked out, we had moved before the notice was published in the paper and before people started driving by, etc.

So, to end: On our credit reports (all 3), we have ONE public record - chapter 7 bankruptcy. Although 2 homes went through the foreclosure process (one right after discharge and one 1.5 years after discharge), neither showed up as separate public records nor were listed as foreclosures. Simply IIB.

Soon, it will be 2 years from discharge.