Surrendered home in Ch7 last fall, HOA still coming after us

[EdenAurora]

We surrendered out home as part of our Ch 7. We received our discharge notice 10/08. We have not lived in the home since 9/07. Our home was already in foreclosure and had a scheduled auction date when we received our discharge notice. Since then the mortgage company has canceled the auction twice. We received notice 2 months ago that the mortgage company sold the mortgage to another lender. That's the last we've heard.

We are still listed on the Deed for the home. We keep receiving violation notices from the HOA for our surrendered/foreclosed home and just received a letter stating that they have fined us. As I understand it the HOA fees and fines accrued after our discharge date are new debts and we will be liable. Yet, technically we don't even own that home any longer. We can't force the lender to auction the home but we want the deed out of our names.

I thought maybe filing a quit claim deed would solve our problems but I'm not sure. There's got to be something we can do. I don't want to accrue any new debt because of a house that isn't ours.

[justbroke]

We are still listed on the Deed for the home. We keep receiving violation notices from the HOA for our surrendered/foreclosed home and just received a letter stating that they have fined us. As I understand it the HOA fees and fines accrued after our discharge date are new debts and we will be liable. Yet, technically we don't even own that home any longer. We can't force the lender to auction the home but we want the deed out of our names.

Technically, you do own the home. Until the deed changes hands you are the owner of the home and are liable for damages, assessments, annual fees and dues, fines and any especially claims arising from liability.

I thought maybe filing a quit claim deed would solve our problems but I'm not sure. There's got to be something we can do. I don't want to accrue any new debt because of a house that isn't ours.

Absolutely nothing you can do, because you can't even force the Lender to foreclose. (There was a good case recently on someone who tried to force the lender to foreclose.)

If you live in some States (like Florida), the lender can be liable for the fees for 12 months (up to 1% of the value of the home). Otherwise, there's not much you can do.

Quit Claiming the deed to the Bank seems like an interesting strategy. I am no lawyer so can't even fathom recommending that.

[EdenAurora]

We are in Florida. So does that mean that we can continue to ignore the HOA until October of this year and hope that the new lender finishes the foreclosure? How long can lenders drag their feet?

[EdenAurora]

Also, how can the lender sell the mortgage to another lender?

[EdenAurora]

One more question. Since we are still the owners, could we rent the home? We could use the money to maintain the home and pay the HOA.

I've heard that there's a new law that states that if a foreclosed home has a rental tenant, they have to let them live out the duration of the lease plus a few months before they could take possession of the home.

Can you believe that we don't even have keys for the home? The lender changed the locks over a year ago. I assume we could change them again?

[justbroke]

We are in Florida. So does that mean that we can continue to ignore the HOA until October of this year and hope that the new lender finishes the foreclosure? How long can lenders drag their feet?

Lenders are not dragging their feet, so to speak. They are just choosing not to take any action to enforce the terms of their contract. So, they can take however long they want. I suspect that many lender will wait until the end of 2009 to accelerate foreclosures. Otherwise, they will own a lot of property that they'd have to pay all the fees on.

Also, how can the lender sell the mortgage to another lender?

Easy... but these days, only the Federal Government (via TARP) is buying these so-called "toxic" assets (loans). Banks use to sell mortgages in the "secondary" market all the time. As a matter of fact, very few Banks actually carried mortgages. Most sold them to other Banks. National City Bank was one of the largest Banks that actually kept mortgages on the books.

One more question. Since we are still the owners, could we rent the home? We could use the money to maintain the home and pay the HOA.

Yes, you could rent it! You would, I hope you would, disclose to the tenants that the home is subject to foreclosure! You would also give them a good deal. I've seen this done alot in Florida. I almost ended up in one of these "foreclosure pending" homes at a great rate ($1M home rented for $1,500/month!). I would be upfront with any potential renter.

I've heard that there's a new law that states that if a foreclosed home has a rental tenant, they have to let them live out the duration of the lease plus a few months before they could take possession of the home.

Hmmmm. I haven't heard this, but they may have "considered" it, but I could not vote on anything like that! It would be unfair to a new owner. Now if you're talking about a foreclosed home that the Bank owned (REO) then I could agree. If I purchased it at foreclosure... the tenants are going to get a 30-60 day notice.

Can you believe that we don't even have keys for the home? The lender changed the locks over a year ago. I assume we could change them again?

They changed the locks to protect the home because you abandoned it. However, you do own it. You may need to tell them if you intend to move back in (or otherwise have "someone" move in... don't mention renting) because they usually hire a company to check on the home from time to time.

I wish you luck with whatever you're doing.

[moneytrouble]

Do the HOA's report past dues to the credit bureaus? They have a lien against home from before the bankruptcy. I am just waiting on the foreclosure to remove the lien and that may take months. Since they already have a lien, should I start paying them right after my discharge, or should I wait until they bill me?
It has been 7 months since I made any payment to my first mortgage, and about 10 to my second, and still no foreclosure date. In early 2008, they started foreclosure after 4 months of non payment. Times sure have changed.