Questions on Abandoning House

[laurannm]

Hello!

We are currently doing a ride-thru on our house (in MA), but have decided to relocate for a job promotion. So we are going to take advantage of our decision to not reaffirm and walk-away. I have some questions though that I can't seem to find a clear answer on (it may be something I need to run by an attorney):

1) Once we walk-away, we still need to carry liability insurance until the foreclosure is complete. Is this correct?
2) How about unpaid water\sewer\electric bills, are we still liable for any unpaid bills? I assume we are for electric, but wasn't sure about water\sewer
3) Am I responsible for future property taxes until the foreclosure is complete?
4) Since currently both insurance and property taxes are paid out of escrow, will the lender just keeping paying those on-time even though I am no longer paying the mortgage (thus it's not really a concern for me)?
5) Should I bother notifying our lender of our intentions?

Thanks!

[helpmeout]

#1-You may not be able to insure it since you aren't living in it.
#2-Utilities can be turned off. When I moved out of the house after being served, I turned them off. Water and sewer may be more tricky.
#3-Property tax attaches to the property, not the owner. The bank who held my mortgage continued paying the property tax even after I stopped paying. They don't want to lose the collateral to a tax sale.
#4-It's likely on the property taxes, but not a gaurantee. What the lender is likely to do is to get insurance on the property. Don't confuse this with insurance that will protect you if someone should get hurt on your property. It's only to cover damage to the property.
#5-You could extend them the courtesy.

When are you planning on moving? Since you are planning on walking away, you may want to stop paying the mortgage and start saving more money.

[laurannm]

Thanks!

So I understand that we probably won't be able to keep it insured once we leave, but do we need to even worry about it (for liability purposes)?

[mlsj2009]

Thanks!

So I understand that we probably won't be able to keep it insured once we leave, but do we need to even worry about it (for liability purposes)?

You should be able to get liability insurance only but not property insurance. That is, if you can afford it, it would be wise. Many just roll the dice by not buying the liability insurance and figure they cannot squeeze blood out of a turnip, but that is strictly up to you.

"3) Am I responsible for future property taxes until the foreclosure is complete?" Property taxes go with the property in most every state, as far as I know, so, you won't likely be held responsible when you walk away. It depends how much the house is underwater on how quick the bank will move on the property on whether they will continue to pay the taxes or not. A taxing authority cannot foreclose on property any faster than the lender can, and they are not too interested in fighting with the primary lien holder for whatever they can get out of the property.

Just a thought. Check out the keys for cash possibility before you walk away. You may be able to get cash for the keys. Don't know your particular situation or state though. Good luck whatever you decide to do. A good rule of thumb to remember is that you are still the owner of the property with your name on the title until the redemption period has finished its course in foreclosure. That means after the sheriff's sale has concluded and the redemption period is over. Then, you are no longer homeowner.

[Bell30656]

If you have an HOA you will still be on the hook until the property is transferred. They may wait quite a while to actually take the home.

[tobee43]

once you have surrendered the house the bank does cover the house with insurance. now, there is much to say about YOUR liability if something happens on that property.

check you local and state laws, in nj all you have to do is POST NO TRESPASSING signs all over, take pictures with a date and then if someone does in fact get hurt, it's on them because they have been given warning not to go on to the property. i have never ever seen any case law or in fact any case whereas a house that was surrendered to a bank and someone goinjureded was sued and won. NOT saying it cannot happen. people sue people every single day for the smaller of reasons. however, what i am saying is this. show me, show me a case where anyone was found liable on a situation as this.

i left my house no insurance, left signs enter at your own risk, and no trespassing signs. it's over 4 years later, i'm sure they are gone. the question for the courts is why is anyone on that property to begin with, let's start there??? if it is a bank employee they are the actual owners of the property at least in the state i have my property...(check to see whether your state is a TITLE theory state or a LIEN theory state). i also want to mentioned we TRIED to keep insurance on the property, however, no one, not a ONE insurance company in that state would cover it unless we lived in the actual house. this may vary from state to state. i just know we could not continue to insure it in anyway whatsoever.

take pictures of your house when you leave, of every room. of course turn off all utilities and make certain you are up to date on those bills and they will follow you on your move even if you change companies. the taxes will be paid by the bank, as mentioned above, no bank will lose your house over a back tax issue.

our atty advised us to just lock it up and leave it. but we contacted the bank via email, actually the loan officer that was working with us on our bank mod which was at the moment of our leaving going almost on over 18 months. (we did not NOT pay our mortgage all during that time, but were required by the bank to be at least 3 months behind to qualify for a loan mod which ended up to be a big joke). however, i did email the loan officer and let him know what we were doing since we were served a summons by the bank on their inforecloseforclose right in the middle of our loan mod. in the end, it really didn't make a difference at all.

[laurannm]

Thanks everyone, good info! What about water\sewer, doesn't that get attached to the property as well?

Great point on cash for keys, it's worth a phone call anyways. We have two mortgages though, does impact that option at all?

[helpmeout]

If they refuse to turn it off, then you can make the argument that it is a tax and attaches to the house. Don't know if you will win that one. I requested in writing that the municipality turn off the water and sewer as I no longer lived there. They flat out refused. I stopped paying when I gave them the written request. The water was pretty much up to date, but I did receive a bill for a time period that covers after I signed a deed in liu and just received a notice that if I didn't pay, that they would hold a tax sale. The way I look at it, I signed it over and agreed to have nothing to do with the house in the paperwork. The bank chose not to file the paperwork. Their problem, not mine, if they lose it to a tax sale. I made it clear to them when I signed the paperwork that I would not be paying the water and sewer. I'm fortunate in that there are no HOA fees. Although, I would make the argument that the minute I signed the paperwork, the bank became responsible. Especially since they put in the paperwork that I was to have nothing to do with the property.

[laurannm]

Earlier this year we fell behind on our water bill and Citi (our lender) paid the bill in order to avoid a tax sale. I am thinking they would do the same