Filing BK and foreclosure redemption period?

[debee]

debee So if the sale has happened but the full 10 day redemption period had not lapsed and the stay is lifted during BK, the bank DOESN'T need to redo the sale???

I really don't know. My inclination is to agree with what joe said in his post above. If you file before the sale, it will be postponed and you'll get some extra time there.

[debee]

debee

So if the sale has happened but the full 10 day redemption period had not lapsed and the stay is lifted during BK, the bank DOESN'T need to redo the sale???

I've never heard of an auction having to be done over because of a disruptive bk filing, but I haven't read much on foreclosure stalling tactics.

Sorry for the double post. My browser froze and I thought I lost the first post.

[ccsjoe]

Brokeded...I looked a bit at NC laws and from a bird's eye view once the sale happens, they do not have to redo it just because you put a stay in place. They have to give you your ten days, however, whether the stay stops those ten days from counting since the sale already transpired or not I do not know. From a legal standpoint(meaning my guesswork), the collection action itself is the foreclosure sale to satisfy the debt via the lien. I doubt a judge would look at the ten days recission period as an attempt to collect, hence would probably not be covered under the stay...but I am attempting to guess and interpret beyond what I firmly know.

[BROKEDED]

Thank you very much. Looks like I need to speak to the attorney tomorrow about this. No reason to just roll over and hand it to the mortgage company at this point. The best thing that could happen right now is that I'm able to convince the mortgage company to delay the sale but I'm not holding my breath. I'll see what the attorney says and update this post as soon as I can.

Thanks everyone!

[DebtZombie]

Holy Moly! This is ALOT of information, aka gobledygook to someone who didnt have a home on my BK. You guys are like freaking geniuses!

This thread should probably have shed light on my question I "thought" was related to the OP's question, but possibly not to my wee brain pan. If anyone can look back on page one and lemme know what my brother could/should do, that would lessen the headache this thread has caused me.

thanks

[ccsjoe]

Holy Moly! This is ALOT of information, aka gobledygook to someone who didnt have a home on my BK. You guys are like freaking geniuses!

This thread should probably have shed light on my question I "thought" was related to the OP's question, but possibly not to my wee brain pan. If anyone can look back on page one and lemme know what my brother could/should do, that would lessen the headache this thread has caused me.

thanks

Very well. For starters here is the typical foreclosure timeline in CO:

Colorado Foreclosure Process and Time Frames
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DELINQUENCY: The day after a payment is due, a loan is DELINQUENT. If the grace period runs until the 16th of each month (as it does for all FHA loans) and payments are posted each month on the 10th, then the loan becomes DELINQUENT for a short period each month.

DEFAULT: A loan is IN DEFAULT as soon as any payment has been due and unpaid for more than 30 days. Lenders often have subdivided collection departments dealing with loans that are in different stages of default.

FORECLOSURE: When a lender says a loan is in FORECLOSURE, they usually mean that the loan file has been transferred to an internal department whose job is to decide if and when to send the loan to the lawyers who handle the lender's foreclosures in Colorado. Most lenders use an outside law firm.

FHA loans cannot be put into foreclosure status until at least three payments are due and unpaid. However, a foreclosure on an FHA loan CAN begin before the grace period expires for the third payment. Conventional (non-government insured) loans can be put in foreclosure AS SOON AS THE LOAN IS IN DEFAULT, which may be only 15-20 days after the grace period ends. However, most lenders will choose not to begin foreclosure until three payments are due and unpaid.

LEGAL WORK: After the lender transfers a loan file to their foreclosure attorneys, the borrower will become responsible for the lender's legal costs, the total of which can be up to $2500 or more. Foreclosure costs and fees including all legal fees incurred must be paid in addition to back payments and late fees in order to CURE the loan and stop the foreclosure. The attorneys usually spend two to four weeks preparing documents, which, assuming the lender is foreclosing on a Deed of Trust, will be sent to the Public Trustee's Office for the county where the property is located.

PUBLIC AUCTION:

When the Public Trustee receives the foreclosure documents from the lender's attorneys, the Public Trustee will record a Notice of Election and Demand ("NED") and will schedule a public auction of the property 110-125 days in the future. The borrower's RIGHT TO CURE the loan is dependent upon borrower filing an INTENT TO CURE form with the Public Trustee's office for the appropriate county at least 15 days before the public auction of the property. Borrower will then receive the CURE FIGURES, i.e. the amount of money needed to reinstate their loan, within one week before the sale. The Public Trustee's Office must receive a cashier's check or other certified funds of the total amount due before 12 Noon, one day prior to the public auction.

The lender's attorneys must schedule a RULE 120 HEARING to take place before the auction date. The purpose of the hearing is to legally establish whether the lender has the right to foreclose on the property and have it sold at the public auction. The judge may cancel this hearing and simply sign the order allowing the sale, if the borrower does not officially respond when given notice.

REDEMPTION PERIOD FOR JUNIOR LIENORS:

If a home is sold at the public auction, it is followed by a short REDEMPTION PERIOD during which time junior lienholders may pay off the amount bid at auction plus "allowable fees" i.e. taxes, insurance, and any interest accrued per day, made payable to the county Public Trustee's Office.

To receive the REDEMPTION FIGURES the INTENT TO REDEEM must be filed at the county Public Trustee's office within 8 business days after the sale. Only junior lienholders whose liens were of record prior to the recording of the NED will be allowed to redeem.

DEFICIENCY JUDGMENT: If the debt on the home exceeds what the lender thinks the home is worth, a homeowner could still owe the lender money even after the loss of the home. If a court can be convinced that the lender bid less than a good faith estimate of the property's value (minus holding expenses) at the public auction, then a DEFICIENCY JUDGMENT for additional debt may be avoided. Otherwise the owner of the property will be held responsible for the deficient amount.

If you read through the above, it'll show you certain documents your brother MUST receive prior to the actual foreclosure sale. My opinion....to maximize amount of time in residence, wait until as close to public sale date as possible. Then call and announce intent to vacate and desire to negotiate cash for keys...maybe he'll get some $$ out of that.

[DebtZombie]

ok, printing and taking this to him, this is perfect!!!!!! YOU ARE A GOD!

So he sits and waits and gets all his ducks lined up then, BLAMO, a few days before the sale date, he files!

Got it!

Am lost on whats this means though::::::::: Then call and announce intent to vacate and desire to negotiate cash for keys...maybe he'll get some $$ out of that.

[ccsjoe]

ok, printing and taking this to him, this is perfect!!!!!! YOU ARE A GOD!

So he sits and waits and gets all his ducks lined up then, BLAMO, a few days before the sale date, he files!

Got it!

Am lost on whats this means though::::::::: Then call and announce intent to vacate and desire to negotiate cash for keys...maybe he'll get some $$ out of that.

Look up "cash for keys" or C4K, there are some references in the forum about it and I created a blog here in the forum about it as well. It's a negotiated surrender/vacating of the property in exchange for some token monetary incentive.

[tcreegan]

Hi BROKEDED,

Whether a foreclosure has to restart from scratch or pick up where it left off after a BK is state specific,

...was it you I saw in another forum saying you were going to hear from the NC banking commissionar or something? Any answers?

Tom in Colo

[BROKEDED]

So I spoke to the paralegal today, appointment with attorney on Monday to find out for certain, and she said that as far as she knew the bank would simply be able to take posession IF I filed during the redemption period AND the stay was lifted after the 341. She also said that it was her (not completely sure) understanding that the bank WOULD have to reset a sale date and subsequent redemption period if I filed before the original sale date and the stay was lifted after the 341. The unsure part was whether the bank would have to give the normal 20 day notice before the new sale date. The additional time there is potentially at least another 30 days in the home if filed before the sale date.

She also gave me a timeline of a similar case where the person filed, had their 341 about 30 days later, 15 days later the bank filed a motion to lift the stay, and then the attorney filed an objection 2 weeks later (allowed 15 days). I understand if there is no objection (I guess within the 15 days) then the stay is automatically lifted but if there is an objection how long does it generally take before there is a hearing?

By the time my attorney files an objection I could be 60 days into the CH7 so I was wondering how much time a hearing might add.

[BROKEDED]

DebtZombie Google, "cash for keys KPBS". There is an article and video from that local tv station. The amount given for cash for keys, if any, seems to vary wildly depending on your state, locale, lender, comparable homes, etc... but in this story it suggest that the norm is 3 months rent in a comparable home in the immediate area so if you could rent a home like yours for $1000 in your area then you might could see $3000 in cash for keys. Also google "what is cash for keys" and the second link down is another pretty good article to mull over.

I would take everything about this with a grain of salt though as there seems to be alot of variables including the timing of when THE HOMEOWNER REQUESTS IT.

[BROKEDED]

Hi BROKEDED,

Whether a foreclosure has to restart from scratch or pick up where it left off after a BK is state specific,

...was it you I saw in another forum saying you were going to hear from the NC banking commissionar or something? Any answers?

Tom in Colo

Don't know if it was me but I DID talk to the NCCOB about a rule that went into effect June 1st requiring banks to halt foreclosure if a homeowner requests a modification. Apparently that only applies to state chartered banks aka the little guys, maybe some regional banks but nationally chartered banks AND their subsidiaries are exempt. Just another way for the big guys to muscle around any smaller competitors.

Interestingly enough, today, Obama named the NC Comissioner of Banks as the Chief Regulator over Fannie and Freddie. Wonder if he'd care to hear my complaint about Fannie being indifferent to my modification dilemma?

[BROKEDED]

Well, for what it's worth the attorney did say that if I filed before the sale date that a new sale date and subsequent redemption period would have to be scheduled. However, he was pretty interested in deterring us (me) from trying to drag this out by trying to manipulate the sale dates and foreclosure etc... His thought was to move on and not worry about the hassle and stress of trying to squeeze a few extra weeks out of the process. He was also wary of appearing to "game the system" in the trustee's eyes. He basically said that there was nothing in our case for them to find but depending on which trustee we got, he could cause us extra hassle and grief by asking for extra documentation and whatnot. I don't know if he's really trying to look out for us or if it's just laziness on the attorney's part. More often it seems like they really want to say, "Just give me your money and let's not make a big deal outta this or cause any extra work for me."

SO, unless the bank postpones our sale date, right now it looks like we'll be waiting until the end of the 10 day redemption period to file. That should put our 341 about the 2nd week in January. Once that is done, we'll see when the bank request a relief from stay and the date of the hearing to decide if it's worth $175 to file an objection. Sometime before we file though, I'm going to question the bank or Fannie about Cash 4 Keys and/or a lease agreement. My only concern about Cash 4 Keys is that if we get the money before our case is discharged, would that screw up our filing or could the trustee swipe it?

Aside from anything out of the ordinary happening it looks like we'll be out by the first of February. We'll see.......