selling house after NOT reaffirming

[mammamouse4]

I have a strange question. We filed and were discharged in 2005. We, or I should say, my husband did NOT reaffirm the mortgage. We are still in our house as of now. We have requested a loan modification for the past 15 months to no avail, since my husband was laid off most of that time.
He has since went back to work for now, but is 3 hours away. I am not on the mortgage, but may be on the title (that legal form signed that allows me to have the house so I don't have to split it with my children-no idea what its called) Anyway...
Since we did not reaffirm, and are not responsible for the balance of the loan, I know we can sell it since its not in foreclosure (my husband is still the title holder)can we sell it for a loss? can he sell it to me to get out from under it? what about family?
I know we could just turn it over and walk away, but we could sell it too. Why can't we sell it for cheap? That would eliminate the possibility of foreclosure hassles.

[NoMoreCards]

Since we did not reaffirm, and are not responsible for the balance of the loan, I know we can sell it since its not in foreclosure (my husband is still the title holder)can we sell it for a loss? can he sell it to me to get out from under it? what about family?
I know we could just turn it over and walk away, but we could sell it too. Why can't we sell it for cheap? That would eliminate the possibility of foreclosure hassles.

You can not sell the house for less than what is necessary to satisfy the mortgage(s) on the property, unless the note holder agrees to a short sale which is difficult or next to impossible to get them to agree to.

You are correct when you say you are not responsible for the balance of the loan, but the house is not yours free and clear either.

[mtbc]

Does the lender still have a lien on the property? How easy lien-stripping is I've no idea.

[mammamouse4]

I'm a little confused. With the housing market taking a hit, most homes aren't worth what they once were, so underselling would be common right now. If we can't get what is owed, does that mean the mortgage company would just take over trying to sell it?
I also thought that a short sale couldn't be done unless foreclosure proceedings had already started.
I also thought that since the title is still in my husband's name, he could sell for whatever he could get. Not necessarily what is owed on the note. Thats not always possible in the best of circumstances.
Just wondering...

[Mi Bankruptcy]

I understand you line of thinking. Bankruptcy just freed your obligation to pay the note. It did not give you ownership of the home. You still have a mortgage that you are required to pay until you pay the mortgage off in full. However, due to your bankruptcy you are not legally liable for any money owed on the home if you decide to quit paying (ride through). The lender still has the right to receive what is owed on the note. However, if they decide to sell it for less than what you owe on it that is their business decision... not yours ( respectfully).. Hope this helps.

[mtbc]

I'd never heard before that a foreclosure is necessary for short sales, just agreement from the lender. (Though then you may owe the deficiency unsecured.)

If a lien is recorded on the property in local records, as usually would be with mortgages, I'd expect that no buyer's going to touch it until the lien is dealt with. The property can still secure the debt even if the lender can't pursue you for it.

[AngelinaCatHub]

I have a strange question. We filed and were discharged in 2005. We, or I should say, my husband did NOT reaffirm the mortgage. We are still in our house as of now. We have requested a loan modification for the past 15 months to no avail, since my husband was laid off most of that time.
He has since went back to work for now, but is 3 hours away. I am not on the mortgage, but may be on the title (that legal form signed that allows me to have the house so I don't have to split it with my children-no idea what its called) Anyway...
Since we did not reaffirm, and are not responsible for the balance of the loan, I know we can sell it since its not in foreclosure (my husband is still the title holder)can we sell it for a loss? can he sell it to me to get out from under it? what about family?
I know we could just turn it over and walk away, but we could sell it too. Why can't we sell it for cheap? That would eliminate the possibility of foreclosure hassles.

I don't understand this at all. If you are legally married, how can he sell it to you? Do you have the money to buy it? Does your family? I'm not sure what paper you talk of about that give you rights to the house not your kids, bit. Everywhere I know, if he were to pass, you own the house unless specifically agreed in some sort of contract.

Legally whomever is listed on the Deed is full owner of this house. There is a caveat though. The mortgage is first lien holder. They have secured equity in that house, you have full ownership. They care less what you sell it for. You can give it away if you wish, as long as you satisfy that lien by full payment and release of lien, called a "Satisfaction of Mortgage".

The ride through is very good and you can walk away, but you cannot sell the house without freeing that lien. 'Hub (and a confused 'Hub too)

[mammamouse4]

Thank you everyone!
I did talk to a real estate attorney today, and we have to go back to the bk attorney.
Basically it is going to get confusing because we still hold the title in (my husband's) name and are legally able to sell. Chase (unfortunately) holds the lien.
The confusion is that if we sell for less than what is owed what would happen, because with not reaffirming, we aren't responsible for the balance. But we aren't sure if Chase can do much about the price since the title is still in our name and we aren't legally obligated to pay them, but they may not release the title. That would mean they would have to take over and take care of the property and sell it with all the costs, etc...We are going to have to research the ramifications. I think that is what mtbc is getting at.
@Angela-I am not on the mortgage, and when we first bought the house I had to sign something that in the event of my husband's death, I would get the house, as opposed to having to split it with my children since they would be legal heirs as well. It would prevent me from having to go to court and be appointed guardian (stupid I know, but how its done) and then request that 'we' sell the house etc...I just can't remember what its called. I would still have to either sell it or obtain a loan to pay for it. And the 'satisfaction of mortgage' is where our questions come in. If we sell it, it doesn't seem to matter if we sell it for what is owed or $1, we don't have to pay them anything else. But we have to figure out when they legally have to release the lien. If we sold it for $1, aren't obligated to pay the balance, it would be 'satisfied' based on bk protection. But that probably doesn't matter to them! LOL!
Mi-no problem! not easily offended.

[HOMEBODY]

The document is called a "Quitclaim"...but you cant sell the property for under what is worth...the loan has to be paid to the bank in order to pass through escrow. I dont understand what you are trying to do. If you did not reaffirm the loan, means you can walk away and not be liable for the deficiency..but you cant sell for less than the loan.

[TEW]

You can not sell the house for less than what is necessary to satisfy the mortgage(s) on the property, unless the note holder agrees to a short sale which is difficult or next to impossible to get them to agree to.

You are correct when you say you are not responsible for the balance of the loan, but the house is not yours free and clear either.

I got a contract on my house shortly after I file BK.
It was for a lot less then what I owed on the house. At first the bank would not agree to a short sale BUT 2 days after my discharge they agreed.

[justbroke]

Basically it is going to get confusing because we still hold the title in (my husband's) name and are legally able to sell. Chase (unfortunately) holds the lien. The confusion is that if we sell for less than what is owed what would happen, because with not reaffirming, we aren't responsible for the balance. But we aren't sure if Chase can do much about the price since the title is still in our name and we aren't legally obligated to pay them, but they may not release the title.

Just a minor injection of information. Regardless of whether you're not personally responsible for the Balance, you still need Chase's approval to do a short sale. They are not obligated to allow you to sell the property without meeting the terms of the Mortgage or Deed of Trust, which is still in force, by paying less than the balance of the Mortgage. This is an important distinction and why liens remain in force.

Now, it would probably be in Chase's best interest to accept a short sale rather than go through a foreclosure. Also, these short sales would probably need to be arm's length, so no relatives or friends. Since you are discharged, you may find them (Chase) more amendable to a short sale.

[newbie2]

This is the easiest way to keep the mortgage / note straight:

The mortgage is the instrument securing the property. The note is the "promise to pay".

Bankruptcy relieves you of the note, the mortgage stays intact.

[justbroke]

newbie2, that's short and sweet! Thanks for adding that!

[Mi Bankruptcy]

This is the easiest way to keep the mortgage / note straight:

The mortgage is the instrument securing the property. The note is the "promise to pay".

Bankruptcy relieves you of the note, the mortgage stays intact.

nice distinction !!!