Surrendering home question

[jimisbroke]

We are going to be filing ch 7 in May. We missed our first mortgage payment on Feb 1.
Lots of calls and a couple of letters from the bank but not much else. We are planning on surrendering the house. I have two questions - first, we have been ignoring calls from the bank. Is this a bad idea? Should we tell them anything? Second, from the time we file how long do you think we will have before we have to move? We are in the middle district of Florida.

Thanks in advance!

[SMinGA2]

Some states are notoriously slow on foreclosures, and I think Florida is one of them. Though ultimately it depends on the state laws regarding foreclosure & the rate at which the mortgage co. moves. If you've only missed February (and now March) then it is highly unlikely that you'll be forced out before you file in May. Depending on FL's statutes, it may even be impossible.

As to whether or not you talk to them - that is up to you. If you are absolutely certain you don't want to save the house, and you're also certain that you will have enough time in the home to meet your needs, then there is probably no point. If you want to 'buy time' you could wait a few more months then talk modification with them.

Many people have turned to Google Voice to divert those calls. Its free, and you can use it in different ways. You can get a new GV # and change so all your creditors have that for your contact. Let the calls go to voicemail. I only have a cell phone, and all of our accounts are so far gone that I don't even know which collection agency is handling which account. For my cell # I activated GV and it took over my voicemail. For my same phone #, I was able to add contacts thru Google's website. Put friends/family/etc. in a group, and those calls come right to me. Set 'unknown' calls to go right to voicemail, my phone doesn't ring. And other calls as they come in, I can screen and choose to accept or send to voicemail. Once I note a # as being a collector, I move it into a group that also goes straight to voicemail. I can listen to VM messages on my phone, or log in to my Google account and read them.

[btbeme]

One small advantage to answering the call once in a while is to verify that they have the right number and don't start chasing down your relatives trying to reach you. This is more a concern from collection agencies than a mortgage bank, but you might answer the call once or twice and verify your identity. But say no more than that.

Here is a link to a discussion about foreclosure, modification, and the ins and outs of living rent-free until they kick you out: http://www.bkforum.com/showthread.ph...-Ch7-Discharge

I second the Google Voice thing, except that it is Google and I believe they will someday be more powerful and a greater threat to personal freedom than Russia ever was. But, if that comes true, they will have your info and identity whether or not you gave it to them voluntarily...

[DeadManCrawling]

We are also in Florida Middle District and stopped paying about 4.5 years ago. The lender, BoA/Countrywide, has only filed a lis penden, one of the very first steps in the process. We moved out 2.5 years ago, due to the huge costs of operating and maintaining that house, and bought another, smaller, to live in.

If you can afford to pay the utilities, HOA, lawn, and so on, you could save a lot of money and be there for a very long time. It varies wildly by lender, and individual case, but the latest average for Florida is well over a year rent free.

Our lender is still trying to push a mod on us. Useless in our case. We did apply for one in the early days, as an attempt to delay the issue, but now it seems that was not necessary.

Good luck

[jimisbroke]

Thanks everyone! All good advice. We are still pretty new at this and nervous!

[MikeW]

We are also in Florida Middle District and stopped paying about 4.5 years ago. The lender, BoA/Countrywide, has only filed a lis penden, one of the very first steps in the process. We moved out 2.5 years ago, due to the huge costs of operating and maintaining that house, and bought another, smaller, to live in.

If you can afford to pay the utilities, HOA, lawn, and so on, you could save a lot of money and be there for a very long time. It varies wildly by lender, and individual case, but the latest average for Florida is well over a year rent free.

Our lender is still trying to push a mod on us. Useless in our case. We did apply for one in the early days, as an attempt to delay the issue, but now it seems that was not necessary.

Good luck

DeadMan, are you saying that your ch7 was over 2 years ago and they still haven't finished with foreclosure? So you could still be living there if you wanted?

I ask because right now I'm considering holding off on my ch7. I'm thinking this would buy me more time in the house while I submit apps for HAMP, short sale, etc. I was under the impression that once you file ch7, you have no more bargaining chips left and it's a fast track to foreclosure. I'm wondering if your case was an exception to the rule? I am with Greentree and I heard that they foreclose fast. So I'm really juggling my options.

[tobee43]

it can't be that fast Mike, FL is a judicial state and must go through a court process to get you out of the house. here in our HOA it has taken YEARS and still we don't have them foreclosed. i would stay as long as i can and save what i could, if i could. we moved to florida from a place that it cost for just the heat and the electric (two separate bills) don't cost the total of all of our expenses here in florida...but then again, we downsized in half and haven't even looked back. our "other" property we surrendered is also in a judicial state and it hasn't foreclosed as yet and it's over 4 years. could we have stayed? most likely, but it was time to leave and it wasn't easy after living in the house over 30 years, but we are so much better off now!

[btbeme]

I was under the impression that once you file ch7, you have no more bargaining chips left and it's a fast track to foreclosure. I'm wondering if your case was an exception to the rule? I am with Greentree and I heard that they foreclose fast. So I'm really juggling my options.

When you file Ch 7, I believe that the bank sees that as a serious sign that you might default - in my opinion, that makes them more likely to agree to a loan mod, for several reasons. First, it is a sign that you cannot afford the house. Second, post-discharge, it means that you might now have the ability to afford the house since all debts are gone. Third, if your mortgage is discharged and not reaffirmed, that means their only recourses if you don't pay would be foreclosure (and the bank does NOT want to foreclose and become a homeowner), or a short sale (which means that YOU have to do a lot of the work). They cannot force a short sale; therefore, their only option if you do not pay is to foreclose. And in FL, that takes forever.

So, I'm my opinion, asking for a loan mod after BK discharge is a good move if you want to stay; otherwise, just don't pay and see if you can set a new record for how long thou can stay before being evicted.

[tobee43]

however, remember Mike...Floida is a deficiency state. so if you are going to file and leave your house it needs to be done before the mortgage relief debt act expires at the end of this year, otherwise, you may find yourself with a great big bill asking you to pay the difference in and if you go the short sale way, or if you decide to file bk after 2012 and include your home. if done prior to 2012 any deficiency would be covered and you would not be responsible, if not the bank can go after you for the difference the house sells for and what you owe.

[LadyInTheRed]

however, remember Mike...Floida is a deficiency state. so if you are going to file and leave your house it needs to be done before the mortgage relief debt act expires at the end of this year, otherwise, you may find yourself with a great big bill asking you to pay the difference in and if you go the short sale way, or if you decide to file bk after 2012 and include your home. if done prior to 2012 any deficiency would be covered and you would not be responsible, if not the bank can go after you for the difference the house sells for and what you owe.

This is not true. The Mortgage Forgiveness Debt Relief Act was an amendment of the Internal Revenue Code, not the Bankruptcy Code. Mortgage deficiencies are dischargeable in bankruptcy and will continue to be unless congress amends the Bankruptcy Code, even in deficiency states.

The mortgage relief act has only to do with the income tax on the "forgiven" part of a mortgage. If it weren't for the act, if the bank forecloses before BK and there is a deficiency that they write off before BK (or you never file BK), you could owe income taxes on the written off deficiency.

If you file a BK and discharge the mortgage (before or after foreclosure), the bank cannot go after you for the deficiency. If the debt is discharged in bankruptcy before it is "foregiven" by the bank, you do not have to pay tax on the foregiven debt. Both these things were true before the mortage relief act and both will be true after its expiration.

Anyone with questions about what the mortgage relief act does can read all about it on the IRS website: http://www.irs.gov/individuals/artic...179414,00.html or read the official congressional summary of the bill at http://www.govtrack.us/congress/bills/110/hr3648

[tobee43]

LITR...a story was just on the local news about such a situation. the third i have heard in the middle district.

it does not only have to do with taxes. in florida they will go after you for the difference not just the tax ramifications on a gain. that is what a deficiency state is all about unfortunately. the bank cares less about the taxes you owe. the debt does get forgiven but they still come after you here...even after a bk! truth be told...i mean it has to be true it was on the news..LOL!!

however, i stand by what i write, the amount is forever forgiven until the act is no longer in effect. one need to read the act very carefully, and while i understand there are a differences of opinion on the interpretation of the act, i understand it to be what it meant to be.

[LadyInTheRed]

LITR...a story was just on the local news about such a situation. the third i have heard in the middle district.

it does not only have to do with taxes. in florida they will go after you for the difference not just the tax ramifications on a gain. that is what a deficiency state is all about unfortunately. the bank cares less about the taxes you owe. the debt does get forgiven but they still come after you here...even after a bk! truth be told...i mean it has to be true it was on the news..LOL!!

You are wrong about this. Read the law. Regardless of what state you are in and whether it is an anti-deficiency state, if a bank comes after you for a deficiency on a mortgage discharged in Bankruptcy they are violating the bankruptcy court's permanent injuction.

[tobee43]

they may be in violation, however, they are still doing it. and, really you think that has stopped the banks before? i have read the law and there are many open ended areas which the banks are using to go after people. it happens, i don't change the facts, i just stating them as they are. i don't say i'm always correct, i am just show me a case and i'm good to go kinda paralegal.

[LadyInTheRed]

The fact that some banks may violate the law by trying to collect discharged debts is not a reason for MikeW to rush his BK filing or the surrender of his house so it happens before the expiration of the The Mortgage Forgiveness Debt Relief Act.

I am not going to debate this any further. I stand by what I've already said. Anyone with any questions about deficiencies in bankruptcy and The Mortgage Forgiveness Debt Relief Act should ask an attorney or do their own independent research.

[tobee43]

i have no debate with you, it is what it is. i stand by what i have stated.

when i see it in case law is when i will change my thoughts. i recommend anyone; especially those going through this consult an atty, they will find each atty has a different perspective of what the answer will or should be. only the future holds any credence to this situation as none of these cases in florida have been concluded. my advise to mike still stands and i would suggest he consult an atty for certain in this part of florida.