Do I need a lawyer for voluntary foreclosure?

[darly]

I received a Chapter 7 discharge in Nov. 2009. The house was included in the bankruptcy and I did not reaffirm. I was renting the house, have told the renter I plan to walk away and they are making plans to move. My question is, do I need a lawyer for the foreclosure process or can I just mail the keys and inform Wells Fargo that I will not be making payments? Or should I call them and explain that I can no longer afford this underwater mortgage?

[ryan]

If you are not going to challenge the FC and basically are fine with it going forward, there wouldn't be a reason for a lawyer, imo. Once a couple months of payments are missed, the lender will probably start the process anyway. You could call them however, and discuss what to do about fire insurance, especially since it sounds like it will be vacant for a while.

[darly]

Thanks, Ryan that's what I thought. The insurance is paid through escrow, and is due in February. There should be enough in there now to cover the payment for a year.

[debee]

Not that it matters since you have something in place, but it's not your responsibility to pay the insurance anymore. Even if the house burnt to the ground, and the bank could only get $1 for the lot, they couldn't come after you for the deficiency. They can't bill you for property insurance or compel you to pay it since you are giving up the property. (Had you wanted to keep it, they could compel you with the acceleration clause that is likely in your loan docs).