how to PROPERLY turn over (to the bank) your foreclosed home.

[seth]

I am vacating my foreclosed home in a month.

BK7 Discharged sept. 09, Surrendered everything, including the house.

these are the things i intend to do before leaving my home for good.

clean up- there will be absolutely no materials (photos, letters and such) linking me to the property.

winterize - toilets, pipes, sinks drained, antifreezed.

utilities cut-off - electric, gas, cable, phone, internet. etc

take a good look around ( i stayed in this house for 10 years) and let out a big sigh....

Now, do i have to go to a bank (WF) and surrender my keys there? give it to the sheriff? or pay my lawyer to give it back? Please tell me how you left your foreclosed house. I have heard of horror stories where the Bank went after the former owner for damage pipes and such...

thanks,
Seth- not a lawyer or a smart guy.

[DeadManCrawling]

You can do all of the above and it may help.

Or it may mean nothing at all.

YOU are responsible until WF decides to transfer the deed back to their name. Nothing else counts. The fact that you surrendered the home in BK means nothing, legally. You are still responsible.

Often, banks do not care or even look to see what sort of condition a FC home is in. This can be helpful or hurtful, depending on the circumstances.

We just bought a foreclosure. It was in reasonably good shape and the bank did not pursue the former owners. Reasonably good shape in our case meant: There were walls and a roof. There was no AC/furnace. The light fixtures and sinks were all gone. The flooring was missing from three rooms. Drywall had been taken from another room. 2 toilets were missing. Most of the copper piping was gone. The pool heater was gone. The garage opener and sprinkler controls were gone.

We got a very good deal, though. We paid 100k or so, and the house immediately appraiesed for 200k.

On the other hand, the house to our south was a total disaster. Not only was ALL the flooring gone, all the drywall was gone. It was down to sstuds and plywood. The previous owners had also poured concrete down al the drains. Luckily, our new neighbors, who bought the place, are patient people.

In neither case was the previous owner pursued in court.

They could have been. But that would also have kept the homes off the market during the legal proceeding.

In your case, though, your goodwill and decency does not, unfortunately, protect you in any way.

You remain on the hook until the actual deed changes back to the bank. The foreclosure is a separate legal case, unrelated to your BK.

Others have tried different methods to get the home back into the bank's responsibility with varying degrees of success.

Hopefuly some will post here with their experiences.

[Rob517]

My situation is somewhat similar to your's so maybe this will give you an idea of what might happen. I vacated my foreclosed home about 2 months ago, filed BK in Oct. and had my 341 two days ago. I called the mortgage company when I vacated the property and informed them that I had left and that the utilities were also being shut off the following week. They just said "ok." I have not heard anything further from them. Auction date was Nov. 25th and so far, no new deed has been registered with the county so I do not believe it has sold.

Since that time, the utilities have been shut off, and my insurance was canceled by the insurance company. They did their 3 yr. inspection and found it vacant and sent me a cancellation notice. No other company will insure the property for me since it is vacant. I left the home the way it was when I lived there. The fridge, stove and Dryer are all still inside. My house is in a very good neighborhood and although its very unlikely that it will be damaged, I am not a fool and know anything could happen.

I wouldn't worry about giving anyone the keys, the bank or whomever takes over the house will hire a locksmith to come and change the locks anyway so it really doesn't matter.

We shall see what comes next.

[helpmeout]

I don't plan on keeping the house. So I discussed it with my attorney and he stated that I would still have to have insurance on it and that if I left, the house would be vacant and be considered a nuisance. A nuisance meaning that there could be vandalism, the yard will be unattended. And I could be held liable. I would also have a hard time getting insurance on the house if I wasn't living there. On the bright side, after the discharge, I don't have to pay the mortgage. Which means that if it takes 2 years like my attorney told me, I will have a nice emergency fund should I ever lose my job. And I wouldn't have to worry about financing my kids' braces (which they will need). And security deposits will be easier to come up with.

[AngelinaCatHub]

I don't plan on keeping the house. So I discussed it with my attorney and he stated that I would still have to have insurance on it and that if I left, the house would be vacant and be considered a nuisance. A nuisance meaning that there could be vandalism, the yard will be unattended. And I could be held liable. I would also have a hard time getting insurance on the house if I wasn't living there. On the bright side, after the discharge, I don't have to pay the mortgage. Which means that if it takes 2 years like my attorney told me, I will have a nice emergency fund should I ever lose my job. And I wouldn't have to worry about financing my kids' braces (which they will need). And security deposits will be easier to come up with.

Your tack is probably the best to take. Keep the utilities on, and insurance on it. Live in it free as you are doing a service for the bank. If it is uninsured and burns down, you both lose.

It is a shame a person would wreck and sabotage a house with concrete in the drains, etc. It was not the banks fault that the house had to be surrendered but to maliciously damage the place should be addressed. If the bank does not have the time, I believe there should be a "bad faith" clause in the bk code that to damage a secured item on purpose would negate the bk. Actually it is criminal, not a civil thing to perform wanton destruction on property not clear of liens.

There is nothing in the law that says you cannot burn down your own home, if it is clear of debt and proper safety permits pulled to do so (such as letting the fire department practice) However, you can't destroy an item you have forfeited.

If you have to leave, I would write the bank a declaration that you will not be responsible after such and such a date, and have it recorded into Public Records. (I don't know the legality of this.) 'Hub

[StartingOver08]

OP and others, even if you leave the home in good condition the home may be taken apart by the banks own 'clean out' subcontractors that come to lock up the home. I know this sounds nuts, but the bank actually hires contractors to make sure the home is clean - and in many instances, at least here in S Fl, the subcontractors remove anything of value from appliances to granite countertops. This is not every foreclosure contractor, but it happens often enough that it is a real issue when showing bank owned homes.

I am NOT suggesting leaving the home in a mess. Because the minute I get notice of the final sale I too will leave my home in great condition and completely cleaned. However, in the meantime I am here saving my funds just like helpmeout suggests. And, at the end, I will take photos as of the day I leave it, just in case. I think it is the decent thing to do, leave the home in good condition for my peace of mind.

[Flamingo]

We just bought a foreclosure.

How did you do that in the midst of filing Chapter 7?

[seth]

I don't plan on keeping the house. So I discussed it with my attorney and he stated that I would still have to have insurance on it and that if I left, the house would be vacant and be considered a nuisance. A nuisance meaning that there could be vandalism, the yard will be unattended. And I could be held liable. I would also have a hard time getting insurance on the house if I wasn't living there. On the bright side, after the discharge, I don't have to pay the mortgage. Which means that if it takes 2 years like my attorney told me, I will have a nice emergency fund should I ever lose my job. And I wouldn't have to worry about financing my kids' braces (which they will need). And security deposits will be easier to come up with.

had i known that this forum existed with "experienced" members , i would have taken my time, and live rent free for as long as i can. but i have made a commitment with a hiring employer, and i feel lucky just to get out of this mess relatively unscathe. thanks for the replies guys.

thx for moving my post and being patient with me Mods!

[DeadManCrawling]

How did you do that in the midst of filing Chapter 7?

The answer is quite complicated, but I will give an attempt at explaining.

My mother in law passed away last summer. She left behind life insurance that allowed us to purchase the home outright. The insurance money went to dad in law, but we are Durable Power Of Attorney. He has mid-stage Alzheimer's disease and cannot live on his own. He has been living with us for the last year and a half or so.

So, we bought this home, which has an attached in-law suite for dad in law, and got a heck of a deal. Since it was his money, and is his homestead, it does not factor into our Ch 7. We needed to find a way to exempt this money from HIS creditors, as well, since he signed for personal responsibility on her medical debt, which grew to over 250k.

We will move in after our 341 or as soon as the attorney says we can. Lot of renovations under way at the place now, anyway.

That's the rough explanation. There were many more details and things we had to do, legally, to make it all work.

[Bell30656]

If you home is in a subdivision or neighborhood with HOA fees, guess who gets to be responsible for those fees? Yep, you are until the bank decides to transfer it.

[mummy]

Wow this post makes me feel better and better about living rent free! I feel guilty but I love our house and would hate to see anything happen to it.

We are planning to surrender our house in a Chapter 7. We're taking our time now to declutter and get rid of as much stuff as we can before downsizing.

Thank you for posting this question because I was wondering the same thing. I wonder if we should leave it in move in condition or just leave it as is with some of the furniture and things we are not planning to take.

[JustFileSuit]

For those who are moving for compelling reasons (job in another State), has anyone thought about recording a Quit-Claim Deed in favor of the lender onto the land title records? that should shovel ownership of the property onto the lender.

I am not advocating this tactic; just soliciting thoughts on this as a possibility. With banks not taking title on the Land records for years, the continuing exposure to the departed owners can become substantial.

Anybody have any thoughts or experience?

[justbroke]

For those who are moving for compelling reasons (job in another State), has anyone thought about recording a Quit-Claim Deed in favor of the lender onto the land title records? that should shovel ownership of the property onto the lender.

There has to be consideration for a Quit-Claim Deed to work.

(On a more personal note... you should change your forum name to "SoSueMe" )

[JustFileSuit]

There has to be consideration for a Quit-Claim Deed to work.

Well, there is "consideration," in the form of relief from future tax claims by the Town. The Grantor gets the relief from taxes, and the Grantee gets the foreclosed property. It is going to be very tough for the Grantee to argue that it should not receive the Deed; after all, that is exactly why they filed in-rem lawsuit against the property in the first place. Should the Grantee lender attempt to set aside the Grant, then there are excellent grounds to sue the lender for fraudulent litigation filings, a classic lender-liability case.

May I solicit your comments?

[justbroke]

Well, there is "consideration," in the form of relief from future tax claims by the Town. The Grantor gets the relief from taxes, and the Grantee gets the foreclosed property. It is going to be very tough for the Grantee to argue that it should not receive the Deed; after all, that is exactly why they filed in-rem lawsuit against the property in the first place. Should the Grantee lender attempt to set aside the Grant, then there are excellent grounds to sue the lender for fraudulent litigation filings, a classic lender-liability case.

Consideration is a two way street. Merely quit-claiming (QC) a property to a lienholder, where the lienholder is not party to nor signed the QC, doesn't mysteriously create consideration.

For the QC to work, the lienholder must actually accept it. You can't just do this casually as it will, otherwise, not hold up. The Grantee can easily show that there was no consideration. Even if you claim, on the QC, that you paid them $1, and sent the $1 check to them.

It's a good theory though. I do not know if it has worked yet. Of course, quitclaims are used in deed-in-lieu of transactions, so it's not like the lenders don't know about them.