Citi Mortgage refuses to foreclose- Property still my responsibility?

[atvbutterfly]

Filed BK Oct '09, discharged Jan '10. Surrendered property in BK to Citi mortg, there was a small 2nd mortgage on the property. Neither of the Lenders filed or attended the 341, but a lien was placed by Citimortgage. Nothing from 2nd mortgage holder. Now 6 months after discharge I am still getting bills for taxes & upkeep of this property that I surrendered. My atty told me to request a deed in lieu of foreclosure, but Citi (Recovery Dept) told me they won't do it. Citi told me they will not foreclose either because the house has very little value for them, but I could so a short sale and pay citi, then the lien would be lifted and of course my name removed.
I do NOT want to do a short sale and I am nervous being responsible for property I surrendered, I have no insurance on this prop. and don't want that cost.

What exactly is going on, do I still own this property? Could I still inhabit it without consequences?


Anybody ever deal with this, what can be done?

[ccsjoe]

Yes, you still own the property...you just don't have a mortgage on it anymore. Unfortunately you have fallen into a black hole of sorts where lots of former homeowners are getting trapped. The discharge only affects your mortgage, not title to the property. As long as you are still on title, you unfortunately are responsible for things like property taxes, hoa dues, etc. Many times, when the bank moves swiftly enough, these get included in the cost of the foreclosure and you're done.

Now here's something interesting though. You stated that "My atty told me to request a deed in lieu of foreclosure, but Citi (Recovery Dept) told me they won't do it. Citi told me they will not foreclose either because the house has very little value for them". I would go back to your attorney and see what legal basis there is for forcing them to take ownership...there's a difference in they are running behind and them refusing...you surrendered it. So if indeed they told you this and you somehow captured it, you may have an interesting case. Otherwise, you unfortunately, remain responsible. See what other options your attorney may consider, however, you may need to consult with a real estate attorney who specializes in foreclosures.

[ccsjoe]

Correction: You do NOT own the property...You are on title. Yes, you could move in if you wanted. You have rights until the title changes hands.

[Ditos]

Can you use a quit claim deed and just deed it to the lender? Most states require only the Grantor to sign the deed and for it to be delivered to the Grantee for it to be valid. Grantor's signatures usually must be notarized as well. Lenders in many of the states hit hardest by foreclosure are pulling these shenanigans - talk about adding insult to injury - you lose the house to foreclosure yet they don't complete the foreclosure and leave you holding the tax & HOA bag.

[atvbutterfly]

ccsjoe: thanks for the info, I have contacted my atty. and requested he check into what options I have. My conversation w/Citi was verbal so I have no documentation that they refuse to foreclose due to low value on the property. It is income prop, so I am thinking if I have to maintain insurance and upkeep, I might as well rent it out. My concern is if Citi is entitled to the income now, even if the mrtg. was discharged?

Ditos:I will have the Atty. look into this quik claim thing, sounds like a good alternative. I am in Mich., and I think only the Grantor's signature is needed.
Thanks!!

[CCsAreEvil]

I was under the impression that you still have to pay home owner's insurance (mainly to protect yourself) and HOA. However, I've heard different opinions on property taxes. Anyone?

[Anewpage]

I am curious about property taxes also....If the bank takes its time with the foreclosure process, who pays RE taxes?
I understand that I should pay home owner's insurance.

[mrskal]

I have a question regarding this as well. If you drop your insurance, and say someone gets hurt on your property etc...they can sue you right? Cant they sue the lender as well since they are owners of the propery as well? I am keeping my insurance on the house, but am curious how that would work if you did not.

Also, as far as realestate taxes, I was told that the taxes go with the house, I did not pay mine this year, and got notice from the county before I filed. The lawyer said, the lender will probably pay them, because if they dont, they will attatch a lein on the house, and will eventually have to get paid before anyone else can buy it. The county is on my list of people they sent notice to about the BK.

[myid4u2c]

I do not believe the quit claim is going to work, it is a great idea. It is accurate that only the grantor need to sign, however on every quit claim I have seen the wording is in "consideration", normally $1 or $10.00. If this did not happen you would be committing fraud and the quit claim deed would not be valid.

[Fallonedward]

One of my neighbors has not paid their mortgage in 14 months (double job loss, hubby has since found a job in another state) and Citi has refused to start the foreclosure on their property. They have been renting it out and living in the other state. I just think in area's hard hit Citi is in no hurry to hit the foreclosure button.

[slam22]

I am curious about property taxes also....If the bank takes its time with the foreclosure process, who pays RE taxes?
I understand that I should pay home owner's insurance.

Property taxes attach themselves to the property and not to you. If you don't pay them and the lender doesn't as well then the taxing authority may/can put a lien on the property for the amount due. As far as personal liability for the property taxes you have none. In our case Bank of America has been paying them on our house for almost three years now. We have not made a mortgage payment in 32 months now. Filed Chapter 7 in spring of 2008 and are still living in our home.

[Flamingo]

I have a question regarding this as well. If you drop your insurance, and say someone gets hurt on your property etc...they can sue you right? Cant they sue the lender as well since they are owners of the propery as well? I am keeping my insurance on the house, but am curious how that would work if you did not.

Also, as far as realestate taxes, I was told that the taxes go with the house, I did not pay mine this year, and got notice from the county before I filed. The lawyer said, the lender will probably pay them, because if they dont, they will attatch a lein on the house, and will eventually have to get paid before anyone else can buy it. The county is on my list of people they sent notice to about the BK.

Keep insurance on the house until it is out of your name. Yes you are responsible if someone falls or gets hurt on the property while your name is still on the Deed. If you have questions about this, ask your insurance agent or discuss with an attorney. Also search this forum for many threads/postings regarding retaining house insurance during foreclosure.

[CCsAreEvil]

So, CitiMortgage filed the Motion for Relief from Stay almost on the clock at the 90 day default mark (we stopped paying for 3 months now). I'm curious as to figure if they are really trying to accelerate foreclosure or if it's just standard procedure. We're in Phoenix, Arizona. So, from this point forward, I guess it's a pure live "day by day" thing until we receive an actual NoD, correct? From my understanding, the worst case is 3 months from the NoD (shortest amount of time we'd get to stay in the home)? Call me a cheapskate, but we are saving for the 1st time in our lives and taking full advantage of it. We also are preparing to find a place to rent after we're booted from here (is it still 1st + last + deposit?).

As we keep going further into this "down" recession time, I see more and more people saying they are staying in their properties for months and month (and sometimes 1-2 years). I'm hoping we get to stay for at least another 6+ months but we're prepared to move.

[AngelinaCat]

Keep insurance on the house until it is out of your name. Yes you are responsible if someone falls or gets hurt on the property while your name is still on the Deed. If you have questions about this, ask your insurance agent or discuss with an attorney. Also search this forum for many threads/postings regarding retaining house insurance during foreclosure.

This is another Catch 22 for distressed homeowners. Many times insurance companies will not write a policy for a property that is not being lived in. You might be able to get a 'dwelling' policy that covers replacement in case of fire, but does not cover liability.

[debee]

This is a topic of interest for me too as we will be surrendering two rentals in another city when we file. My understanding in terms of taxes is that they attach to the land and if you have surrendered the property in bankruptcy, you will continue to receive the tax bills but won't be held personally accountable for any that accrue post-bk.

As for insurance, we have fire/vandalism policies on the properties now but lose coverage if they are vacant for a certain period of time. nIgHtmArE.