If foreclosure starts, can I still sell/list my house?

[KevFinnerty]

If foreclosure starts, can I still sell/list my house?

And what are the ramifications of all that if so?

For example I am learning today about something called "lis pendens" that has me confused. On the one hand it sounds like it is some kind of public record thing that occurs as soon as a bank starts foreclosure, but that it wouldn't necessarily be on a real estate listing itself, YET I am seeing it on real estate search engine type websites for some houses??? It would cause title/loan problems for interested buyers causing them to back away??? Or even tip people off that foreclosure was coming thus why bother to buy the house (instead try to bid on it for nothing later??). Or is it something that the bank creates a listing for??? I don't get it...

Sorry for all the dumb questions lately.

[jlmaca]

If foreclosure starts, can I still sell/list my house?

And what are the ramifications of all that if so?

For example I am learning today about something called "lis pendens" that has me confused. On the one hand it sounds like it is some kind of public record thing that occurs as soon as a bank starts foreclosure, but that it wouldn't necessarily be on a real estate listing itself, YET I am seeing it on real estate search engine type websites for some houses??? It would cause title/loan problems for interested buyers causing them to back away??? Or even tip people off that foreclosure was coming thus why bother to buy the house (instead try to bid on it for nothing later??). Or is it something that the bank creates a listing for??? I don't get it...

Sorry for all the dumb questions lately.

Filed by a lender, a lis pendens is the formal notice that starts the foreclosure process. Even though this is considered a pending lawsuit, the homeowner still has possession and the right to sell or refinance the property. Many homes that are in foreclosure are in the short sale market. This is not a hindrance as the lender does not want your home but money. Better for the lender if you can find a buyer, it saves them the cost of doing so.

[KevFinnerty]

Thanks.

I actually spoke to my lender today & they told me that I could still try to list/sell the house, but that at the time of sale their "foreclosure attorney" would have to get involved, and that he would have had unnamed fees and some kind of power to approve or disapprove of the transaction (or something). I asked if I could find out exactly what that all meant but they told me only that attorney would know, and he can't comment until after the foreclosure starts/goes through/I sell the house/something. So there is yet more I don't understand, but am getting somewheres (kind of).

[jlmaca]

Thanks.

I actually spoke to my lender today & they told me that I could still try to list/sell the house, but that at the time of sale their "foreclosure attorney" would have to get involved, and that he would have had unnamed fees and some kind of power to approve or disapprove of the transaction (or something). I asked if I could find out exactly what that all meant but they told me only that attorney would know, and he can't comment until after the foreclosure starts/goes through/I sell the house/something. So there is yet more I don't understand, but am getting somewheres (kind of).

To go through all this hassle you must be looking for some benefit. Why bother selling? Why not just move when the time comes? You could agree upon a move date and get cash for keys.

[jcraneesq]

Foreclosure Defense and Bankruptcy

If foreclosure has recently started, you should hire attorney ASAP.

1. If RESPA or TIL violations, Section 6 may permit you to rescind the loan and receive all payments you made back.
2. If a victim of predatory lending, you might also be entitled to such relief.
3. You may delay your foreclosure by months (maybe years) by fighting back.
4. You can always list the home for sale (short sale) even if foreclosure was already filed.
5. You can file a Chapter 7 to stall eviction.
6. You can file a Chapter 13 to catch up on arrears and give you time to make such payments.

All is not lost.

Good luck,

John M. Crane, Esq.

[KevFinnerty]

To go through all this hassle you must be looking for some benefit. Why bother selling? Why not just move when the time comes? You could agree upon a move date and get cash for keys.

Because my house should be worth anywhere from $80-125,000 more than what I owe on it, if it is able to sell.

[KevFinnerty]

If foreclosure has recently started, you should hire attorney ASAP.

1. If RESPA or TIL violations, Section 6 may permit you to rescind the loan and receive all payments you made back.
2. If a victim of predatory lending, you might also be entitled to such relief.
3. You may delay your foreclosure by months (maybe years) by fighting back.
4. You can always list the home for sale (short sale) even if foreclosure was already filed.
5. You can file a Chapter 7 to stall eviction.
6. You can file a Chapter 13 to catch up on arrears and give you time to make such payments.

All is not lost.

Good luck,

John M. Crane, Esq.

Thanks John.



#1 & #2 - Don't apply afaik.

#3 - I spoke with an attorney this afternoon and got some interesting advice. He did say some of the things you mentioned as far as fighting/delaying foreclosure, and even helping me with my other creditors. Unfortunately I have no money to retain him or any lawyer.

#4 - Yup. Although in my case it wouldn't be a "short" sale. The property should be snapped up even at the price of my mortgage at an auction because it is worth much more than that. I'm afraid I will have difficulty selling it for anywhere near it is worth but it should definitely go for more than what I owe the mortgage co.

#5 - Filing for Chpt 7 to forestall anything is not a good idea from what I have heard - it will be contested & overruled immediately & have other consequences.

#6 - Chpt 13 is not an option for me since I am unemployed/broke...

[jcraneesq]

You are not broke

If your home has equity...sell the damn thing ASAP. Walk away with something. Even if someone steals it from you, it beats being foreclosed on and walking away with zero. You need to retain an attorney...explain to them that you have equity in the home and will give them a charging lien if they take your case. This will give them the right to get paid from the proceeds of the sale. As an attorney, I understand the bills have to get paid and most attorneys need money up front. But I also understand that we became attorneys (hopefully most of us) to help people.

This is a chance for someone to help you and help themselves in return. They will get paid...just not up front!

Good luck,

John M. Crane, Esq.

[KevFinnerty]

If your home has equity...sell the damn thing ASAP. Walk away with something. Even if someone steals it from you, it beats being foreclosed on and walking away with zero. You need to retain an attorney...explain to them that you have equity in the home and will give them a charging lien if they take your case. This will give them the right to get paid from the proceeds of the sale. As an attorney, I understand the bills have to get paid and most attorneys need money up front. But I also understand that we became attorneys (hopefully most of us) to help people.

Thanks.

I spoke to one atty so far, who although was very helpful, said he had to have his fees up front, and would not work on $$ from sale of house to come later.

I'll try calling some more I guess...

[EDIT: Alternatively, if I CAN sell the house, I could use $$ from that to then retain an atty]

[KevFinnerty]

If your home has equity...sell the damn thing ASAP. Walk away with something. Even if someone steals it from you, it beats being foreclosed on and walking away with zero.

I've been going 'round in circles about this, concluding yes it would be better to sell the house to get some of the equity then use that to settle with my other creditors. But looking at it over & over as realistically as possible I'm thinking now that is going to be a big mess, and leave me worse off than if I just file Chpt 7 and let the trustee take the house since:

(1) It is going to be very difficult for me to sell my house anywhere close to what the value is - I can't do the things nec. to fix it up to put it on the market and make it look attractive to buyers (replacing carpets, windows, flooring, repainting). I won't be able to pay various fees for fixing things that might need fixing. The foreclosure will be starting soon, giving it Lis Pendens status and that is going to screw things up even worse, giving the house a scarlet letter of sorts, making it unattainable by buyers who need financing, and speculators with cash will know they can get it much cheaper later at auction. Plus in general the housing market sucks and it may never sell at all anyways.....

(2) Even assuming I could miraculously sell it - say if I sold it for like $50,000 less than other similar homes - I have all this other pressure from my unsecured debt creditors, of which I owe around $100k!!! They may sue me & put liens on the property b4 it sells. They may freeze my bank accounts etc etc. And even if they don't, assuming I do sell it - pretending I would get enough out of it to settle with the other creditors for like 40-50% which I actually believe I WON'T get enough $$ out of the sale to do - then I would get stuck with huge "income" on next year's tax return that I will not be able to pay & be ruined that way, in addition to - having to deal with the tons of stress involved in trying to sell the house, fighting with all these creditors to try to settle, trying to avoid lawsuits, account freezes, you name it - I'll never come through all that...

(3) If they take it as Chpt 7 & I claim federal exemptions then at least that gives me $20,000 of the equity for myself to start over with. It wipes out all my debts. It takes the burden and enormous pressure I am under now to sell it quickly at a price that will suck. I can stay here (hopefully) until that all gets sorted out.....

Does this make any sense or am I overlooking something? How does the trustee go about selling houses? What price will they end up accepting? What happens if they can't sell it?

But maybe I should ask about this in a separate thread in the bankruptcy forum.

Also I need an atty to handle this and I can't afford one, however I heard about free "legal aid" in my area that can do Chpt 7 filings - but of course there is probably something there I haven't discovered yet, like you get what you pay for, and for free they'll do a crappy job & I'll be even worse off.

[jdcat]

I'm not sure how a trustee goes about selling a home but there is no way a trustee would pass up a house like yours with that much equity exposed.

As far as paying your attorney use the funds that you had planned on using to catch up on your mortgage. That I think would be the smartest thing to do. If you know for sure that you are going to file chapter 7 that is. Why put the money into catching up on the house when you will be loosing the house anyway? Use it to get the protection that chapter 7 can give you.

You might also want to find out how soon you will need to file since you are so close to foreclosure. You may need to file ASAP to stay ahead of the whole foreclosure process.

[KevFinnerty]

I'm not sure how a trustee goes about selling a home but there is no way a trustee would pass up a house like yours with that much equity exposed.

As far as paying your attorney use the funds that you had planned on using to catch up on your mortgage. That I think would be the smartest thing to do. If you know for sure that you are going to file chapter 7 that is. Why put the money into catching up on the house when you will be loosing the house anyway? Use it to get the protection that chapter 7 can give you.

You might also want to find out how soon you will need to file since you are so close to foreclosure. You may need to file ASAP to stay ahead of the whole foreclosure process.

Thanks.

I am I am reading more & more about things & getting scared, not sure I can even file for Chpt 7....I used one of credit cards for a cash advance in March to keep afloat when I had the rug pulled from under me and no more $ coming in. At that time I had no thoughts of declaring bk, was still trying to get a job & stay afloat. Now I'm reading that that is not allowed in bk? It would be dismissed if cash advance within 6 months?? Or maybe I can just not try to include that card in my bk (and worry about settling with that one later)??

I am so confused by all this, it is so complicated, plus the "credit counseling" stuff as well looks like a black hole to navigate and I am majorly confused and concerned about that, the ins/outs of bk in general, what I'm up against now in foreclosure, how I remember in another thread someone saying that Chpt 7 won't stop a foreclosure anyways, on and on and on this is getting worse and worse and worse and looking impossible.

As far as having $$ to keep mrtgage from foreclosure, I haven't been able to raise anything so far trying to sell things which I had hoped to do to stop foreclosure temporarily, so no money for lawyer using those (nonexistent) funds, barring a miracle. Also lawyer I did talk to again today recommended I use him for (a) foreclosure defense ($1500) to keep that delayed, then (b) bankruptcy filing ($2000 + $299). We didn't even get into to many specifics of which I am sure there are many issues as I start learning more and more about Chpt 7 bk.

I will see if the free "legal aid" thing can help me in any way, but so far it is impossible to talk to one of their advisers over the phone (I have been calling for 3 days), although they told me that I can come in in person and wait in line on a first come first serve basis in the afternoon (I shudder to think what that is going to be like but I have no choice).

[jdcat]

Definitely go to the legal aid thing and wait for as long as it takes. You never know...it may be just what you need. And at least you'll know that you tried.

As for the credit counseling...easy peasy! Nothing to fear at all. As a matter of fact it can be quite educational and informative. And there is no judgment involved, it's just taking a picture of your current financial situation and offering tips for budgeting and things like that. There was a thread posted earlier today I believe for a free online credit counseling course. So if you do end up filing look up that thread.

And as for the cash advance you wouldn't get dismissed but the creditor could object and that could potentially get messy. There are others here who have actual experience with that very situation and can hopefully chime in. *hint hint to the people who know*

[mrskal]

Homeowners Emergency Mortgage Assistance Act

http://www.govtrack.us/congress/billtext.xpd?bill=h111-3142

Not sure, but can this help you out, this is the new bill that still needs to be signed by the president. Supposed to take effect 10/01/2010. I did not read the whole thing, but it is modeled after a program in PA, that is already in effect.

I could not find a site with the PA stuff, but you can do a google search.

[KevFinnerty]

Thanks. I had tried to look into something like that - I met with a counseler from "Credability" which is nonprofit, referred to by my mortgage co.

Since I am not employed & have zero income I was not eligible for anything at all. It was a complete $*&ing waste of time!!! The best they could do would be if I was able to get a job immediately with a certain percentage income relating to my mrtgage they could then "apply" or ask that my foreclosure be postponed, but it would take something like 3 months for that to even go through (or some such b.s.) thus meaning it wouldn't even make any difference, the foreclosure would be pretty far in effect and house already gone. The counselor had no idea what to say to someone like me in such dire straits. He just kept spouting some of the same stuff that didn't apply to me over and over then he was just basically trying to get me to end the phone call so he could help somebody that fit with the actual programs out there :-(