Chapter 7 BK and Short Sale...my story and questions...

[ab33arch]

Hi Ab33arch,

Deed in Lieu is where you and the bank agree to allow you to deed the house to the bank instead of the bank following a foreclosure process; you both must agree to it.

Short sale is where you AND the bank agree to sell the house to a third party for less than it's value.

Cash for Keys (C4K) is where the bank pays you to surrender the house without destroying it. This happens after change of title. On my name, click the 1 blog entry I have on this site to read about my experience and the mechanics of C4K.

Thanks. That was definitely helpful to know... just to make sure i completely understand, the c4k program then only applies when the sheriff sale produces no buyers and the lender ends up with the house and wants me to leave? i thought i could get "kicked out" by the "sheriff" before the auction takes place???

[ab33arch]

Hi Ab33arch,

Deed in Lieu is where you and the bank agree to allow you to deed the house to the bank instead of the bank following a foreclosure process; you both must agree to it.

Short sale is where you AND the bank agree to sell the house to a third party for less than it's value.

Cash for Keys (C4K) is where the bank pays you to surrender the house without destroying it. This happens after change of title. On my name, click the 1 blog entry I have on this site to read about my experience and the mechanics of C4K.

Thanks. That was definitely helpful to know... just to make sure i completely understand, the c4k program then only applies when the sheriff sale produces no buyers and the lender ends up with the house and wants me to leave? i thought i could get "kicked out" by the "sheriff" before the auction takes place???

[ccsjoe]

No, the sheriff can not kick you out until the lender or new owner is on title. They can not evict you from your own place. And the best you can do, when the sale happens, is either reach out to lender to attempt negotiating a surrender or wait for lender rep to come verify occupancy of the house and then engage the negotiation options. Either way, there is a good likelihood you will not simply get kicked out, too many legal hoops to go through and you'll get notified each step of the way. If you know your state's civil code regarding evictions, you can file motion after motion to trip them up even more.

[Bkman2]

Cash for keys can be done with a short sale. I do them all the time.
A quick caim removes a person from the title, not the loan. You have to refi to get them off the loan.

If you are going to walk from the house then why fight the bank to stay in it? Move out, let them foreclose and file chapter 7..... Done.

Each state has its own laws on deficiency judgments for the banks. When they foreclose and they get the house back they 1) Get the house and thats it or 2) They sue you for the difference.

If you do a short sale they can make you sign a note for the difference owed, send you a 1099-C and you pay the IRS taxes on the difference, or they sell the debt to an attoney and they come after you for the difference (I'm seeing more of the 1st and last options happening).
Its rare but sometimes you get to walk and owe nothing.

My 2 cents would be to foreclose, BK, and move on. Don't drag things out and make more stress in your life.

[nceguyfromne]

Cash for keys can be done with a short sale. I do them all the time.
A quick caim removes a person from the title, not the loan. You have to refi to get them off the loan.

If you are going to walk from the house then why fight the bank to stay in it? Move out, let them foreclose and file chapter 7..... Done.

Each state has its own laws on deficiency judgments for the banks. When they foreclose and they get the house back they 1) Get the house and thats it or 2) They sue you for the difference.

If you do a short sale they can make you sign a note for the difference owed, send you a 1099-C and you pay the IRS taxes on the difference, or they sell the debt to an attoney and they come after you for the difference (I'm seeing more of the 1st and last options happening).
Its rare but sometimes you get to walk and owe nothing.

My 2 cents would be to foreclose, BK, and move on. Don't drag things out and make more stress in your life.

When I "short saled" the mortgage insurance company saddled me with a nice, hefty promissory note to pay back the deficiency over the coming 8 years. It felt soooooo good to discharge that 18 months later but I wish I'd never signed it and wasted all that money on the first 18 payments to begin with. Oh well, lesson learned.