Trustee is employing real estate agent

[tdawg]

I just checked pacer, and my trustee is employing a real estate agent to try to sell my house. I filed ch 7 in November, and my 60 days is up next week. I am current on my mortgage and always have been. I did not reaffirm but was hoping to do a ride-through. At my 341, the trustee asked for a phone number that he could have a real estate agent get ahold of me at.

I am in Washington state. It says in the contract that the real estate agent has until May to sell the house. What happens now? Can I keep living in the house? Do I have to make my mortgage payments or can I just stop making them? I highly doubt they'll be able to sell it for what they're listing it at (what I bought it for 1.5 years ago). Has anyone had this happen to them when they're current?

[helpmeout]

Apparently, you have enough equity in the house that the Trustee wants it. Did your attorney exempt your state's allowance for homestead equity?

Personally, I would stop paying the mortgage and save the money.

[OhioFiler]

Did you indicate in your petition your intention was to surrender the property?

[Redfish]

It sounds like you can keep living in the house but you should be prepared to move. Typically you will be aware of the sales process, as you'll be called when your home is about to be viewed by a potential buyer. Once an offer is made and accepted it typically takes 30-60 days to close. So I don't think anyone is going to kick you out tomorrow, but you definitely need to start looking for new housing. Personally, I would stop making the payments, but that's just me.

[tdawg]

Apparently, you have enough equity in the house that the Trustee wants it. Did your attorney exempt your state's allowance for homestead equity?

Personally, I would stop paying the mortgage and save the money.

I definitely have negative equity in the house. I bought it 1 1/2 years ago with 0 down, and houses in my area have went down roughly 10% in this area over that time. Every source I've looked at online shows it has between $25,000 and $50,000 negative equity. And judging by what other houses are listed at in this area, that seems true.

[tdawg]

Did you indicate in your petition your intention was to surrender the property?

I indicated that I was going to stay and pay in my petition.

[tdawg]

It sounds like you can keep living in the house but you should be prepared to move. Typically you will be aware of the sales process, as you'll be called when your home is about to be viewed by a potential buyer. Once an offer is made and accepted it typically takes 30-60 days to close. So I don't think anyone is going to kick you out tomorrow, but you definitely need to start looking for new housing. Personally, I would stop making the payments, but that's just me.

I wonder what will happen if the house does not sell. The contract with the real estate agent is for 3 months. I wonder if after those 3 months no one makes an offer on the house if the trustee with abandon the property. Or if he just keeps wanting to sell it, it could take over a year to sell. Would I not have to pay my mortgage or any rent during that time?

[StartingOver08]

Did you purchase your home with a 100% mtg or one of those 80%/20% loans?

I ask because it sounds like your Trustee does not have all the mortgage information encumbering your home. It makes no sense to sell an asset with negative equity to me. What will the sale generate for the BK estate? Does your attorney know what the Trustee is looking to achieve by trying to sell an upside down primary residence?

[tdawg]

Did you purchase your home with a 100% mtg or one of those 80%/20% loans?

I ask because it sounds like your Trustee does not have all the mortgage information encumbering your home. It makes no sense to sell an asset with negative equity to me. What will the sale generate for the BK estate? Does your attorney know what the Trustee is looking to achieve by trying to sell an upside down primary residence?

100% loan. Here's another tidbit of information. At my 341, my lawyer had another lawyer stand in for him (he had told me he might do this and it was fine with me). After the trustee asked for a phone number for me to have a real estate appraiser call me and we were done and outside, the lawyer told me that he asked me that because he was going to approach the bank and see if they'd offer him some cash to sell my house. I told her that I was current and it had negative equity. She said that didn't matter and that he could do a short sale.

I asked my attorney about this later, and he said that he had never heard of that, and he talked to some colleagues about that, and if the trustee tried that that we had to fight that because it would set a horrible precedent. Basically the 3,000 times on here that people have asked if they should reaffirm their home, every time people have said, "No. You can just keep paying on it and the bank won't take it." If my case goes down this way, then that won't be true anymore. Now, my attorney charged a flat fee for his services, so I wonder if he's willing to "fight it" for no added cost.

[helpmeout]

What the Trustee is doing is highly unethical and your attorney should report him/her after your case is resolved.

[Redfish]

Sorry, I didn't realize you had negative equity in the home. I don't know what to tell you. You should definitely speak to your attorney. On one hand you stop paying the mortgage and the home sells, leaving you with money to move on. But if the home doesnt sell and you havent paid the mortgage will you be foreclosed on?
I hope it works out for you, whatever you and your attorney decide to do. Please let us know how it goes.

[StartingOver08]

A short sale does not generate any funds for the BK estate. The "stand in" attorney appears to have just stood aside when it was up to him to set the record straight. There is no reason to take over a property that is current on payments and has zero equity! I'm still trying to see what the Trustee gets out of this...unless the Trustee is trying to panic you into offering $$$ to the Trustee (BK Estate) to stay in your own home.

[tdawg]

A short sale does not generate any funds for the BK estate. The "stand in" attorney appears to have just stood aside when it was up to him to set the record straight. There is no reason to take over a property that is current on payments and has zero equity! I'm still trying to see what the Trustee gets out of this...unless the Trustee is trying to panic you into offering $$$ to the Trustee (BK Estate) to stay in your own home.

That standin attorney said the bank could give him cash, but that seems like a bad precedent/unethical to me. I'm guessing he might be trying to panic me into offering him $$ too (like you said), which again seems kind of unethical. I know he collects for the estate (creditors), but he gets a cut of that too. It is supposed to be a "fresh start", not a punishment.

[StartingOver08]

I see you filed a Ch 7. The Trustee makes $60 (or it might be $65) per case on a no asset Ch 7. So if the Trustee can squeeze any funds out of you it certainly increases the Trustee's income. This is beginning to make a little sense. It still sounds unethical IMO, but if this Trustee's SOP is to squeeze extra funds out of every case and turn it into an ASSET Ch 7, then the Trustee's income increases tremendously. The creditors still get nothing or next to nothing, but its not too difficult to see that even an extra $1000/case would highly benefit the Trustee. Is there a way your 'real' attorney can enlighten you on this?

[lalap123]

Tdawg,
What state do you reside in, if you don't mind my asking?