How did you "Walk Away" from your home post discharge?

[JohnnyQ1980]

I'm a couple years post Ch7 with a 1st and 2nd mortgage IIB and just mulling the possibilities...

I know I'm not liable for paying on either mortgage now and can let the banks deal with the house but how does this happen? I've heard of folks just mailing keys to the bank which doesn't make sense to me but what do you do when you want to walk?

I'm asking because the current housing market is looking pretty good and if by some miracle, I could secure some bank or non-bank loan, I could get into a much better property with a loan that is much less expensive than the one(s) I'm paying on now.

So, obviously, you stop paying your loans... then what?

[NoMoreCards]

You will find what works for you. I was able to purchase for cash by borrowing some and taking some from my 401k. Found a great deal on a foreclosure and bailed on the other house. Sheriff sale was last week, however in Michigan there is a 6 month redemption so my daughter is enjoying free rent. Granted now i am paying back the money i borrowed, but in two more years it will be paid for. You will find what works for you, there are options.

[keepsmiling]

You might also want to consider settling with the second, if the house is underwater.

[JohnnyQ1980]

Actually, I wasn't looking for advice about loans etc... but a more pragmatic question: The actual physical moving out bit. Obviously you get your stuff out and into storage and/or your new place but who do you hand the keys to? The sheriff? I guess I'd feel more than a little weird about leaving my home of 11 years to the elements.

The timeline of events e.g. notice of default, trustee sale date etc. will determine what the various steps are for me. I suppose I would have to prepare for the worst and get cracking on renting after about 3 months but I've heard other stories of people staying rent-free for a year or two. Is it the notice of default that I would have to look out for or could I stick it out and wait for the trustee sale date?

That would be a really good deal if the banks on my 1st and 2nd drug their feet for two years. Or would it, since from what I've read, getting a "normal" loan post-BK and foreclosure still requires some time to expire after the end of the foreclosure process. I think I would go after for sale by owner/owner financed properties to avoid the long wait.

I'd be interested to hear of other post-bk "walk away" experiences as that was one of the benefits touted to me during my bankruptcy process. "Walk away..." they make it sound so easy but I can't imagine it being so...

[denisec]

#1. You should google your state's foreclosure time line and see what how long the process will take from the time you receive a NOD. In WA, it is 120 says from NOD to notice of auction sale. Every state is different. I have sat in a house post discharge with no payments for 2 years and still no NOD. I decided to not start seriously looking for a rental until I receive the NOD, or after I repay my whole student loan which should be in another 5 months. #2. You can't get financing from FHA (which is the easiest) until 3 years after the foreclosure sale NOT 3 years from the discharge date. So unfortunately if the bank takes forever to foreclose on you and the sale at the courthouse steps doesn't take place in 5 years, then you can't finance for 8 years from now. So you can't finance a home unless you can figure out a creative way, like all cash, or have the owner hold a note or borrow from relatives or whatever. So that's it in a nutshell.

[panda]

Well for us, we had to move. Our business went bust, we were in Hawaii, and the tourist industry died literally over night where we were at. Had refinanced our home trying to buy time and of course this never works, especially when things are going into a deep dark period. We are talking deep debt, we more than doubled our original mortgage in the refinance. Maxed cards to the tune of 100k. It was bleak.

I certainly did not want to be stuck in Hawaii with no money, it was pretty tight anyway and we moved there with substantial funds nine years previously. Hawaii is great if you have the funds to keep your little spot going, but when your broke, not so much.

So we planned a three month saving marathon starting Feb 1 which was our last payment to BOA, I was scared to death they would get us tossed out rather quickly as at that time they were able to push non judicials through within 60 to 90 days. New law went into effect in Hawaii on May 1 and now Hawaii has laws on the books for slowing things way down, not what we wanted nor needed.

Sorry so long winded, just wanted to give a bit of background. Anyhow, we set everything up for the container to arrive, we loaded it, sent it on its way over the ocean to Seattle, sat in a rental for a week while our daughter finished school. We told BOA that week we were leaving, they said we would go to the top of the foreclosure list, which is what I wanted. They told us to lock the home up and leave all the keys on the counter.

Seven months later they keep sending paperwork for a hamp, I get out the magic marker and put on the paperwork that the home is vacant, would they please foreclose. Every month I get my bill saying information only, we know you have been through bankruptcy.

I want them to take the place, it is sitting there molding, and it breaks my heart when I think of all the hope and wonderful times we had there. We left the home in excellent condition, but it won't matter now as the jungle is trying to reclaim everything around it, and then will start to swallow the house up as well.

What an absolute waste of a perfectly good home that they could have sold, albeit at a loss, but at least someone would be caring for it.

We are getting on in life, not creaking old yet, but well, you know kinda slowing down, so we are renting and unless something really brilliant comes up, we will do this until we can move into the senior rentals when we get old enough to do that, that have some really nice ones here where we are living now.

[cocoasmom]

I took our keys to the house and the deed, walked into the bank's attorney's office, handed them over and asked for a dated receipt.

[JohnnyQ1980]

So you didn't have a second? If I go through with this, I would have 2 banks from my 1st and 2nd. I suppose since the 1st is underwater making the 2nd worthless, I could give my keys to the 1st bank attorney. Someone in an earlier post just locked the keys in the house per the banks instructions. How does *that* work??!? You'd think they would have to break in then.

I have a basic understanding of all the foreclosure timelines and whatnot but when it comes down to the dirty deed when you physically *walk away*, it seems like there are a variety of ways to do it. It will definitely feel weird if I ever do walk away.

[researchnerd]

You don't need to do anything when you walk away, whether it's before or after BK. We just stopped paying, moved out a few months later, locked everything up, and took the keys with us. Believe me, they can get in when they are ready, and they already have all the paperwork they need.

[cocoasmom]

If the house is not out of your name and something happens to it, you can be held liable. Ideally, you'd want homeowners insurance on it until title is transferred.