Is it possible the bank will never foreclose?

[tobee43]

I'm 100% with tobee on this issue and yes... it has been discussed ad museum.

If you surrendered it, the bank has notified you that they are aware it is vacant, changed the locks, paid the insurance, paid the taxes and possibly sent someone to inspect/secure it, then it belongs to the bank. The name on the deed is just paperwork at that point.

Others on this forum will say "You have to have liability insurance in case someone falls down on the property and gets hurt." I have many questions about this response.
1. What insurance company would even cover you?
2. If, by some miracle, insurance is found and if someone is actually hurt on your former property, would the insurance company really pay the claim? (not likely - yes I have an extreme dislike for insurance companies)
3. If you're responsible for the liability and some persons injury, then that would mean you had to give them permission to be on your property, right? Why were they there? Were they trespassing?
4. Wouldn't someone have to prove negligence to win?
5. How could it be negligence, if you weren't aware of any problem on the property?

I could go on, but you get the point. I'm not an attorney and I'm not saying it's impossible that someone could sue you while your name is on the deed, but I do find it improbable.

If someone that advocates the 'someone falling down' argument could point me to some cases where a surrendered home's previous occupants were sued for liability, I'd like to read them.

With 13% of all homes in the country vacant, you'd think this would be front page news quite bit, wouldn't you?

Just my 2 cents.

yes, i do agree, i have never seen case law in any case thus far to this date, (please hopefully someone will chime with with some current case law on the subject matter), indicating a previous owner who has surrendered their property during a bk and an order was issued by the courts that they are close and discharged, held responsible for any liability.

i think what lady's point is, actually, one can never be careful, and although we both attended different law schools, law is an ever changing cycle of life and it's situations. i personally cannot cite a case, to date where there was liability, however, it does not mean, at some point the law in whatever state cannot be changed.


here's what i know for FACT...in the case of where we owned our property it is impossible to get insurance on a vacate house in foreclosure. period. that may not be applicable to some other states. i assure you, in nj that is in fact the case.

please, don't take anymore of your precious thoughts and stress about this. honestly, you are fine. after all......there are REAL laws on people who actually do the TRESPASS ...which is clearly a violation and against the law in most all states that i know, and if someone is on that property it certainly is not with your permission. therefore, it's an illegal trespass, they have entered at their own risk.

[LadyInTheRed]

You seem to have inferred that I'm trying to argue with you - I am not. I'm truly interested in this topic and have searched quite a bit for information

I think I did misinterpret your intent. I read right past where you said "I'm truly interested" comment. Maybe partly because I enjoy a friendly argument. Sorry if I didn't sound so friendly.

Unfortunately, it is really hard to determine whether anyone has actually ever sued somebody in these circumstances. It could be that nobody ever has because this isn't a very common situation historically. In the "normal" course of things, you don't have a long period of time between when a debtor moves out of the house and when the bank forecloses and title is transferred. Welcome to the new normal!

It could be that since the bank has taken possession of the property by padlocking it, they have also assumed liability.

I also never said it would be impossible for someone to sue you - I said improbable. That's really what insurance comes down to - probability and statistics.

I think you are right that a lawsuit is unlikely. Not because I don't think an injured party would sue, but because the chance of there ever being an injured party in relation to any particular property is small. If it were me, I'd take the risk.

My biggest questions related to this topic are how you would actually find a policy to cover your liability on a vacant house and if you manage to find one, would it cover your legal defense should a claim arise? Obviously, every policy that you could find would be different in it's coverage, but my experience with insurance companies is usually "well... your policy doesn't happen to cover that."

I believe personal umbrella liability insurance is what somebody should look at. You make a good point that if you buy insurance for a certain purpose you should be absolutely sure the policy covers what you need it to. Don't just take an insurance agent's word for it. Read the policy. If a defendant is insured for the type of claim at issue, the plaintiff will learn that in discovery and name the insurance company as a defendant. The insurer will usually take over the defense. If you don't want to rely on the insurer's defense, you would need to hire your own attorney whose fees may or may not be covered by the insurance.

I see this topic a lot on these forums so many people are in this situation and need to make the decision for themselves if they want to take the risk or try and find a policy to cover them. I'm just posting the thoughts rattling around my head - maybe I'm just crazy or wrong. Who knows.

I think the more we post thoughts rattling around in our heads, the more we are giving people to think about when making the decision on insurance coverage. Who knows, maybe someone will eventually come along and post some actual legal authority!

[tobee43]

lady, i too, cannot find anything "written" per sa, anywhere indicating something solid legally for a similar situation.

i can say this, when we left our house, our insurance company said no one in nj will cover you since the house was not occupied by the owner, and once the owner vacates, the property goes immediately onto the banks umbrella policy. we didn't or couldn't obtain insurance on the house unless we lived there, by any company.

of course, on would think, or speculate, that policy certainly would not cover the "stay and don't pay" people. if something happens while they are squatting, i.e. a fire, thief, etc., or something along that line, and maybe THEY would be held responsible for, ( really don't have any legal basis for that answer, i just think that may present some problems possibly legally), that could be some type of legal ramifications, at least one would think.

i think also believe this type of situation is relatively "new" in the legal realm, so as time passes maybe we will see more written case law on the subject matter, if it ever goes that far.

ps..my typo above..."never be careful"....should have been NEVER TOO CAREFUL. maybe someday i will learn to type, but it doesn't appear anytime soon.

[freeatlast09]

lady and tobee: I think you've hit the most important point. The new 'normal' is 1 year, 2 years, 3 years or more waiting for foreclosure. This is simply uncharted territory for homeowners, insurance agents and banks. It's a crazy downward spiral and nobody seems to know what to do.

[tobee43]

lady and tobee: I think you've hit the most important point. The new 'normal' is 1 year, 2 years, 3 years or more waiting for foreclosure. This is simply uncharted territory for homeowners, insurance agents and banks. It's a crazy downward spiral and nobody seems to know what to do.

agreed. and i think it will be sometime before we can see clearly what the outcome of these type of situations will bring.

[Clabbergirl]

Interesting discussion about the topic. I guess I'm looking for educated opinions here about my own situation then, as none of us can really predict what will happen from a legal standpoint.

My BK was discharged on 6/6/11 and STILL no notice from the mortgage company to vacate. I'm ready to move at the end of the month and am not sure how to proceed. Should I call my mortgage company and tell them I'm leaving on X date? They have not listed it for auction yet or contacted me since the discharge either. The house is livable but needs some work, work I'm not going to spend the $ for. I'd like to go on living rent free, but my family and I are ready to move forward with our lives. We have a place to move to that is ready for us and I don't want to keep stalling the inevitable. Any advice from those who've been here? How they reached the decisions they made?

[freeatlast09]

My BK was discharged on 6/6/11 and STILL no notice from the mortgage company to vacate. I'm ready to move at the end of the month and am not sure how to proceed.

What did you indicate on your petition? Surrender the house? When was your last payment and which mortgage company? Do you have HOA dues?

WF seems to be the only bank moving with any speed at all. BofA and Chase seem to have forgotten about a lot of properties.

My 2 cents - get all the free rent you can. There will be plenty of paperwork coming so it's not like you'll be surprised and have to move with 24 hours notice or something like that. or... if you want to get on with your life (as we did so I totally understand that thought process) go ahead and move. I'd let the mortgage company know you left so their property preservation people can take care of it.

Others will certainly chime in too. Best of luck.

PS I started a thread about waiting for foreclosure that may be of interest to you:

http://www.bkforum.com/showthread.php?71065-Longest-wait-for-foreclosure

[tobee43]

clabbergirl, i will just tell you about our experience.

we got our summons on foreclosure way before our filing and closing our bk.

when we decided to leave our atty told us to lock it and leave it. however, not my style...we had been working on a loan mod with a loan officer for over 18 months or so and i both emailed him and called him to advise him that we were vacated the premises due to the summons issued by chase.

that was well over three ago, and still the house has neither foreclosed nor been put up for auction. however, i think it varies depending where you are. a easy way is to do a simple look up in your country web site to see how fast the foreclosures are moving...that's one way if they have a site. i know in the county we had our property it was located at the sheriff's site.

that was just our own personal experience, others may have had different things happen at different times. hope that help at least a bit.

[Clabbergirl]

I stated surrender of the house on the petition, and the mortgage co. is Suntrust Mortgage. The HOA dues are paid for all of 2011. I included the HOA on my credit matrix, if that makes any difference.

Initially I thought I would go as long as I could because of free rent, but in actuality, a family member is moving and has offered to rent us her house at a low rate (lower than any properties we could even try to get). She needs someone to watch her house and I need somewhere to live - it just so happened these 2 things happened at about the same time. I don't want to string her along, and we really are ready to move on. Besides, I'm tired of dealing with the lawn care!!

The last time I tried to call Suntrust, they sent me through 3 different departments (almost went mad from all the different automated phone menus!!) before they finally said they'd sent my account to their BK department or agency or something. It was frustrating. I wouldn't feel right not letting them know the property is empty though. Moving out of this house really is the last hurdle I have (emotionally and physically) in getting on with my life post divorce. Sigh.

[freeatlast09]

Well... about the only real reason to stay and wait for foreclosure is free rent. If losing that doesn't bother you and you'd be better off emotionally, I'd say move. Sounds like you have a pretty sweet deal waiting at the new rental so go for it. The only thing I see that could be a problem would be HOA dues. You're paid for 2011, but if the bank takes quite awhile to foreclose, you may end up having to pay those starting in 2012. Some HOAs are getting the dues from the mortgage company (tobee is very knowledgeable about this) while others could be a pain and bug you for them.

All the best.

[Clabbergirl]

Thanks, freeatlast09. Money is money and it's better to have no rent than to have rent at all, but then one has to decide what it's really worth in truth.

I thought the HOA could put a lien on the house for their dues - a house I no longer care about. They could sue me for their piddly $120 if the deed doesn't change hands by 2012?

[freeatlast09]

They could sue me for their piddly $120 if the deed doesn't change hands by 2012?

oh... your HOA dues are only $120/year? That's not something to worry about. I've seen some that are several hundred dollars a month.

[tobee43]

Thanks, freeatlast09. Money is money and it's better to have no rent than to have rent at all, but then one has to decide what it's really worth in truth.

I thought the HOA could put a lien on the house for their dues - a house I no longer care about. They could sue me for their piddly $120 if the deed doesn't change hands by 2012?

unfortunately you will be responsible until the house is sold. i know in this HOA we add HUGE late fees, cost, charges blah and blah, and by the time we are done the amount goes well into the thousands in some cases and our dues are only $125 per year. we do put the liens on the house, however, we don't after the homeowners usually, if they filed bk and the house goes into foreclosure. instead, you know what they say.......just follow the money...so we just wait for the bank to attempt the sale, they can't have clear title on the house until the lien is satisfied and in our state i when a homeowner falls behind on their association dues, the homeowners’ association commonly files a lien against the property. some states grant homeowners association liens senior lien status, which means they are given priority over other liens recorded at an earlier date. liens given this status are termed “Super Liens”. in other states, the lien would be paid in the order in which it was recorded.

[Hopeful09]

Just wanted to share our story here, sounds like there are definitely some others in the same boat. Our last payment was December 08! BK filed April 09 and discharged July 09. We moved out July 09 and BOA "secured" the house in September 09. The only paperwork we've ever received was in March 09 - which was the intent to accelerate. For a long while after discharge, I'd call every month because I was under the impression that foreclosure would take place very quickly. Boy was I wrong...month after month I'd get the run around - they didn't get this paperwork or that paperwork...most recently, I was told that I needed to try to sell it for 90 days before they'd do anything.

I drove past the place today and the grass is a good 3' high, it's really sad. This was our dream house and we practically begged for help when we started having trouble without any luck. At this point, we've moved on and have been renting a nice condo for almost 2 years but would love to have this out of our names so we can close that chapter of our lives!

I haven't heard of any limitations on the amount of time it takes for the bank to transfer the deed. How do I find this out?

[tobee43]

Just wanted to share our story here, sounds like there are definitely some others in the same boat. Our last payment was December 08! BK filed April 09 and discharged July 09. We moved out July 09 and BOA "secured" the house in September 09. The only paperwork we've ever received was in March 09 - which was the intent to accelerate. For a long while after discharge, I'd call every month because I was under the impression that foreclosure would take place very quickly. Boy was I wrong...month after month I'd get the run around - they didn't get this paperwork or that paperwork...most recently, I was told that I needed to try to sell it for 90 days before they'd do anything.

I drove past the place today and the grass is a good 3' high, it's really sad. This was our dream house and we practically begged for help when we started having trouble without any luck. At this point, we've moved on and have been renting a nice condo for almost 2 years but would love to have this out of our names so we can close that chapter of our lives!

I haven't heard of any limitations on the amount of time it takes for the bank to transfer the deed. How do I find this out?

it depends on your state. i know we inquired about the "law" pertaining to how long the bank has legally to make the transfer. unfortunately, in nj where our property was, it's 20 years. so, actually, if the banks decides not to sell it, or knock it down, as opposed to selling it (at which time the deed is changed), we could actually have it in our names for that full 20 time period.

your state may be different as far as the statue of limitations of deed transfer. i would check the laws in your state. best of luck to you!