deed in lieu and chapter 7

[JacaG]

We are in the process of filing chapter 7, have paid the fee and completed the paperwork so as soon as we hand it in we can file.
My question is about our mortgage, we don't want the house-we moved out of state 1 year ago (house has been for sale since with no offers). I have contacted BofA and they told me to send in income, hardship letter etc to apply for the deed in lieu.
Should we wait to file Chapter 7 until we find out about the deed in lieu or just let the house foreclose? I am worried they will sit on the house for 1-2 years before foreclosing (the house is in AZ), if I can do the deed in lieu the clock will start ticking faster for us to buy again someday.
Can I even do a deed in lieu after Chapter 7 or once the foreclosure process starts?
The mortgage is an FHA loan- do banks typically foreclose faster on those loans so they can get paid- or is that not how it works?
Thanks.

[hedgecat]

I'm sorry no one answered your question sooner. I filed Ch. 7 and have a home with BofA in Washington State. I also moved out a year ago and stopped paying in October of last year. I can tell you that if you file BK, it will tie up your home for about 4 months. BofA will not be able to do anything with it while it is in the bankruptcy process. I want BofA to take my home via Deed in Lieu but they inform me that I also have to do a short sale for a minimum of 3 months before they will consider it.

From what I've heard, and I'm no lawyer, once you include your home in BK, it behooves you to have the bank foreclose or do a DIL instead of a short sale. Short sales open you up to potenial tax liabilities that you may not have in the event of a DIL or foreclosure.

I've told BofA thanks but no thanks on the short sale and am waiting to see what happens.

We are in the process of filing chapter 7, have paid the fee and completed the paperwork so as soon as we hand it in we can file.
My question is about our mortgage, we don't want the house-we moved out of state 1 year ago (house has been for sale since with no offers). I have contacted BofA and they told me to send in income, hardship letter etc to apply for the deed in lieu.
Should we wait to file Chapter 7 until we find out about the deed in lieu or just let the house foreclose? I am worried they will sit on the house for 1-2 years before foreclosing (the house is in AZ), if I can do the deed in lieu the clock will start ticking faster for us to buy again someday.
Can I even do a deed in lieu after Chapter 7 or once the foreclosure process starts?
The mortgage is an FHA loan- do banks typically foreclose faster on those loans so they can get paid- or is that not how it works?
Thanks.

[JacaG]

Thanks for the info. Please post what happens. I did get a notice of intent to accelerate already and we stopped paying 6/2010.

[tobee43]

it's more likely going to be a warranty deed..not a deed in lieu...and make certain it also has a "general release".

the bank will take their sweet time and your names will continue on the deed until the house is sold by them usually at sheriff's sale...at which time the bank doesn't even need to send you anything, but can simply tranfer the deed at that time to the new owners thus giving them clear title...

although the deed may remain in your names you are not longer responsible provided you listed them on your chapter 7 and it was discharge.

ours has been over 2 years and we'll be lucky if this bank ever takes it out of our names!!