What is this trustee's thought process?

[freeatlast09]

[DeadManCrawling]

What state and district?

Many of these types of things are specific to certain areas, and even certain trustees.

[freeatlast09]

Western District of WA.

I saw some posts by TDawg about the same thing in this district, but he was trying to keep the house.

[spetkovich]

I've seen the same thing with a property in NC and a trustee in FL. The debtors moved from NC to FL and thought to keep the house up there as a vacation home, couldn't afford two mortgages, and surrendered the NC property in the bankruptcy. The scheduled values showed they were upside down for about 35-40k based on independent appraisals, but the Trustee thought there was equity and administered the estate. Ultimately the Trustee got about $100k in proceeds from the sale, prior to costs (realtor, association fees, insurance, etc.). I didn't see the final accounting, but I assume there was also a pretty fat amount of administration fees in there too.

[ColoradoBell]

I think I need YOUR trustee for MY sitch! LOL!
My house has a contract on it for way under what its wortth (and a not at arms lenght transaction.) While I wouldn' tmind avoiding a couple of the liens on the property (which would happen if it sold at th econtract price) I'd much prefer to buy out my Xs share and fix it up anhd sell it for much more. .......Would your trustee consider moving to Colorado????????

Who is paying for the taxess and insurance and maintenance of the house all these 10 months? Were you a no asset case? Does the property list on the MLS 'as if' it is bank owned or does it specify bankruptcy?

[freeatlast09]

Who is paying for the taxess and insurance and maintenance of the house all these 10 months? Were you a no asset case? Does the property list on the MLS 'as if' it is bank owned or does it specify bankruptcy?

We were no asset until he decided to try and get money out of a negative equity house. The insurance was paid through March/2010, but now BofA is whining about it being paid. We are still listed as the owners and the MLS simply lists it as a short sale. Taxes? I'm not paying no stinking taxes.

With a short sale, he won't get a nickel for the creditors so I'm assuming BofA has some deal to pay him a commission anyway?? Pretty unethical if you ask me.

[frogger]

Question:
What is he thinking? How does he get any money for creditors?

You know that the trustee gets paid first? So you gotta ask the question of who the trustee is trying to make sure gets paid.

[tdawg]

I think this is the trustee's strategy

You know that the trustee gets paid first? So you gotta ask the question of who the trustee is trying to make sure gets paid.

When there's a mortgage on a house, generally it has to be paid off in full for the house to be sold. However, since you abandoned the property and stopped paying the mortgage a long time ago (I'm assuming this), then the mortgage company is faced with a foreclosure generally.

So, I think this is the way the trustee does this. He lists the house for xxx,xxx (seems to pick a number out of a hat). Then, when he gets an offer (why would he care if it's one week or two years later), he files with the court to sell the house on the condition that the mortgage company agrees with the real estate agent getting their full commission and the trustee getting $30,000 or so. Then he contacts the mortgage company, tells them he has a buyer on the house and they'll get xxx,xxx dollars. The mortgage company at this point will probably accept it rather than having to wait to get the house back and probably taking another year to sell it (especially in a declining market). I actually saw one case on pacer in Western Washington where the trustee did exactly this (I'm assuming the communication with the mortgage company).

Of course this doesn't seem like the most ethical thing. There are only 2 people that really gain in this "scheme" (the trustee and the real estate agent). I don't understand why the mortgage company can't foreclose on the trustee if he "owns" your house after you file. Maybe it's a big headache for them, or maybe they haven't seem this happen very many times to start contemplating that. In a normal ch 7, they get the house back a few months after someone files.

Now, in my case, I don't understand how the trustee could justify this. The mortgage company told me they have no interest in letting him sell in since I am completely current on my payment. When I contacted them, they didn't understand what I was talking about until I explained it in full. My attorney thinks that the trustee thought that I was behind on my mortgage (seems like a pretty elementary mistake).

Aren't lawyers (even trustees) held to a higher standard? Could someone file a complaint with the bar association against a trustee for doing something like this? Or does anyone think the trustee is totally justified in doing something like this?