Wrongful sheriff sale and foreclosure

[Lands03]

I'm in Pennsylvania. Filed chapter 13 in June 2016.

Long story but I'll try to keep it short.

My father in law had 3 parcels of land. All under a mortgage. He deeded us 1 parcel which we put a modular home on. (not realizing it was mortgaged and lawyer that did deed didn't mention it)

My father in law passed away owning a great deal of debt so we were advised not to open an estate.

Fannie Mae started the foreclosure process and so we filed chapter 13 to get the automatic stay put on our property. In our confirmed bankruptcy plan we agreed to surrender the other 2 parcels, which when sold would cover the mortgage owed and that we would keep our parcel.

In October 2017, Fannie Mae filed and received the relief from automatic stay, but they only listed 1 of the surrendered parcels. Sheriff sale happened on 11/2017 and all 3 parcels were sold. Fannie Mae was the buyer. Now Fannie Mae is requesting relief of automatic stay for the 2nd surrendered property.

I've tried to explain this to my lawyer but he just keeps insisting that all 3 parcels could not have been sold because of the automatic stay, but they were! I've been to the court house to double check everything, and I am correct. Fannie Mae owns all 3 parcels on 1 deed now.

Someone please tell me they were not allowed to do this so I know I'm not crazy! And what can I do about it now?

If you got this far, thanks for reading!

[justbroke]

It was under 1 mortgage, but 3 parcels? It seems as though that's the key phrase. When did you find out that the foreclosure sale included all 3 parcels under the single mortgage? I don't know how a bank would go about foreclosing on a mortgage with 3 parcels pledged as security for the underlying deed of trust or mortgage. I mean, it should be one-mortgage for the 3 parcels, so one foreclosure. Maybe the bank realizes the error and is now trying to get "relief" for the other property in order to clean up the title and avoid a mistake.

In the end, even though one parcel may have bee quit-claimed to you, the property was still encumbered by the mortgage. I suppose the question is how did the bank mess up... and if they did, then is this just a forgivable scrivener's error or can the court undue the foreclosure.

Bottom line: you'll have to convince your attorney. There are so many questions, such as was this just caught now (and not in 2017)? What is the length of your Chapter 13?

[Lands03]

Thank you for your reply. Yes it was 1 mortgage that included all 3 parcels on it (theres a parcel with his dad's house, our parcel is right beside it, then a parcel of woods that run behind both properties)

Our bankruptcy was supposed to be 5 years long, but it just ended (2 years early) since we did not have to pay the back property taxes that we were behind on because when the sheriff sale happened in 2017 all back property taxes were paid off.


I agree with you that they filed another relief to try to cover themselves.

We just want our parcel back in our name and the lawyer said after we get the discharge certification we can worry about that. We got the letter from our trustee that we no longer have to make payments but she said it could be 90 days til official discharge.

[justbroke]

Sounds like an error, but was it a simple scrivener's error or is this cause to go back into the bankruptcy court. Your attorney is probably hesitant because should you lose, you would owe your attorney $$$ (probably at $250/hour to fight the relief).

Filing a relief from the automatic stay (RFS) after the case has been discharged, would have been considered moot. Since your discharge is not yet entered, I don't know why no one wants to touch this now. I mean, if your attorney is up for doing this on contingency, and perhaps making some caselaw, the attorney could file an objection to the RFS and claim that the RFS exposes the underlying issue that they did not have stay relief to foreclose on the other parcels. I say this because the RFS could be granted and then you would not be able to appeal a "final order" of the court if you wait the 90 days... rather than object now.

This looks like the bank wants what they call a "nunc pro tunc" (retroactive) ruling on the RFS under some theory. Actually, does the motion's cap have the words "Nunc Pro Tunc" in it or "confirming no automatic stay" (or something similar)? This may show the bank's intentions.

I can't tell the bank's intentions. Are they only to go after Parcel 1 and Parcel 2 but not the third parcel, where you are homesteaded? That's the 800-pound gorilla in the room. What are they trying to do.

But then again, that's probably why I don't practice bankruptcy law. Certainly an interesting case.

[spr250]

First off, sorry for you losses. I live in the country where people have a few plots and let family build houses on that land (if it meets the requirements). It sounds like to me that the bank had a lien on the properties when you FIL passed away. He may have deeded to you, but you didn't outright own it since the bank still had a security interest in it. Filing BK in any form would not protect the land since you were not the mortgage holder. The cold hard truth, just because you built a house on it, doesnt make it your property. It was joint owned by your FIL and the bank. When he died, he technically defaulted on the loan and they took back the property, just like if you were to default on a car and it gets repoed. Although, most banks dont like sitting on property as it may sit awhile and not get back what was owed, so they generally offer the family members a chance to assume the loan and keep the property. I take it, that was never offered or it was denied. If in that case, they are legally within their rights to assume ownership of the property and sell it off. Legally, you are nothing more than a renter with zero protections in place. Im not trying to be cold hearted, but it is what it is. This is a prime example of why you dont do business with family when that assest isnt paid for. You risk everything. I know it wasnt malicous in any form, it was life.

[LukeWhatever]

Im not trying to be cold hearted, but it is what it is. This is a prime example of why you dont do business with family when that assest isnt paid for. You risk everything. I know it wasnt malicous in any form, it was life.

Truer words were never spoken. No matter if it is a family, some points should be handled as if it was your business partner.