Walking Away 6 mos. Post-Ch 7 Discharge - questions

[LookingFrwrd]

I'm hoping someone can give some advice on the best way to proceed...

We were discharged from a Ch. 7 in June 2008, no reaffirmation signed on 1st or 2nd (both with Countrywide). We continued to make mortgage payments until I was laid-off in January. We have decided to give up the house and are planning to move out of state after school is out in May.

My question is, do I need to contact Countrywide and let them know our intention to walk away or do I just wait for them to initiate the foreclosure process?? We'd obviously like to stay as long as possible to save up money for the move. I'm also concerned that maybe the foreclosure process will be expedited since the mortgages were already discharged in BK versus a foreclosure without BK?? We did not pay January or February so I'm not sure when we should expect the first paperwork from CW -- but I don't want to be taken unaware and be forced out in 3 months when I am anticipating it will take at least 6 or 7 if not more.

Also, what happens if we get to July and the foreclosure is still in process but we need to leave the state? We are not planning to have an attorney work us through this process (unless that's recommended) so what would we do, just mail them the keys? I'm also concerned about our RE taxes due in June -- will we need to pay those if we are still in the house??

Sorry for all the questions -- lots of concerns and I don't want to do anything wrong. If anyone can give advice, it would be greatly appreciated.


LookingFrwrd in Illinois

[BassBoy]

Lot's of good questions..............

First, you've skipped Jan and Feb mortgage, so very soon, you'll be receiving the Notice of Default and the lender will state what you need to do in order to cure the default, how much you need to pay to cure it by and what steps the lender will take if you fail to cure the defualt. This is a good start to the timeline. From here, it could take the lender several months to file suit against you and have it heard buy the court. The lender MUST file a suit against you in civil court. It's part of the foreclosure process if you live in a judicial state. For the upcoming steps the lender will take, you need not be represented by an attorney and you do not need to be at any of the court dates. As far as how long you have in the home, that depends on your state. Some states are really backed up and foreclosures are taking more than a year to complete. Others may be 6 months. If you had an attorney represent you in your BK, you can always contact them and they can give you an idea of how long you have. Your attorney will receive everything you receive regarding the foreclosure, and even though the attorney is not a real estate attorney, they can offer you some advice and offer information.

Since you're leaving the home, you do not need to contact the lender until you've vacated the property. You want to make sure everything you want to take is out of the house and you have no reason to return. And just leave the keys on the counter.

As far as the Property Taxes...........normally your escrow account is ahead by 6 months or a year, so your taxes should already be paid for the first half of this year, and more than likely, your taxes should be covered for the remainder of the year. But if the escrow account is depleted, the lender will cover the taxes to prevent a lien on the home while the foreclosure process is active. Whatever that amount is gets added to the debt you owed them and considered discharged. The same applies to homeowners insureance. When you've left, the lender will take their own policy out against the home.

[LookingFrwrd]

Thank you so much BassBoy...that information is very helpful.

I was doing more research today on how to handle the HOA and have seen conflicting information. Am I correct to assume that we need to continue to pay HOA monthly until the deed is no longer in our name? And when does that happen exactly? If the house does not sell at auction, what happens? Are we still on the deed at that point or is that when our names come off sale or no sale?

And you said contact Lender once we've vacated -- I'm guessing that should be in writing, probably certified mail or some such?? And that's just a letter saying we've vacated and keys are on the counter? Would we send that to the attorney for CW who is named on the notices or directly to CW or both??

Thanks in advance!!
LookingFrwrd

[relief13035]

I am confused about HOA fees also.
I haven't paid the HOA fees on the rentals that we are surrendering since Sept. 2008. I can't afford the mortgage, let alone fees. Renters hit hard times and didn't pay and everything had a domino effect.

[BassBoy]

Thank you so much BassBoy...that information is very helpful.

I was doing more research today on how to handle the HOA and have seen conflicting information. Am I correct to assume that we need to continue to pay HOA monthly until the deed is no longer in our name? And when does that happen exactly? If the house does not sell at auction, what happens? Are we still on the deed at that point or is that when our names come off sale or no sale?LookingFrwrd

Yes, you may have to keep the HOA up to date. The home is your name until the deed transfers. If the home doesn't sell, usually the lender gets it, so the deed should transfer some time after the sale. We had an HOA and we had to keep that current. It sucks to keep this up because you're not living there. The law about HOA's after BK is interpreted as communitive housing (i.e., condos). If the property is vacated, the fees are no longer to due by the owner. Single family homes are usually not treated as such.

And you said contact Lender once we've vacated -- I'm guessing that should be in writing, probably certified mail or some such?? And that's just a letter saying we've vacated and keys are on the counter? Would we send that to the attorney for CW who is named on the notices or directly to CW or both??

Thanks in advance!!
LookingFrwrd

You can call the lender and tell them you vacated. No need for a certified letter. We had Countrywide and we simply called to inform them we were vacating the premises.