No more Foreclosures???? What is going on?

[Whites376]

Just wanted to post - I have been reading more and more about banks not foreclosing on properties and leaving them in the owners name. How common is this really? Are the banks really doing this? My question is if this becomes more of the norm in future months and years, what is going to happen? Another housing bust because there are all these homes sitting vacant that people cannot sell because the lenders will not foreclose? Is it just me or is that ridiculous? I guess I don't understand why they wouldn't foreclose and sell the property, they at least get something back........and are these banks continuing to pay the property taxes so the county can't take them in foreclosure for back property taxes? If they are going to pay these property taxes, why not foreclose? How would they write this off on their books either?

[davephx]

I have not heard "keeping in the owners name" anywhere.

Banks foreclose and usually they are the only bidder at the trustee sale. It than goes to their Real Estate Owned dept after they are sure the prior owners is kicked out by the sheriff. But title is now in the banks or Fannie or whoevers name. Maybe the servicer takes it in their name for Fannie , not sure.

Many than are holding off releasing their real estate inventory to the market so the market is less flooded with foreclosures in the hope that prices will increase and they can gradually sell of their foreclosed homes.

[Whites376]

Originally Posted by davephx

I have not heard "keeping in the owners name" anywhere.

Banks foreclose and usually they are the only bidder at the trustee sale. It than goes to their Real Estate Owned dept after they are sure the prior owners is kicked out by the sheriff. But title is now in the banks or Fannie or whoevers name. Maybe the servicer takes it in their name for Fannie , not sure.

Many than are holding off releasing their real estate inventory to the market so the market is less flooded with foreclosures in the hope that prices will increase and they can gradually sell of their foreclosed homes.

So you are saying you haven't heard of this? When we submitted our request for a DIL with Chase the loss mitigation department lady I spoke with said with the value of the property being so low they would probably deny the DIL - she said we want to try and sell our property because they probably wouldn't foreclose. I spoke with her again today and she said even with the BK (Ch 7 ) and us surrendering the house, that this would not change anything and they may still not foreclose. Is this just a scare tactic? At this point though, I don't know what they are "scaring " us into. We won't be responsible for the payments any longer once the CH 7 is discharged. I have been reading online thru the internet that this is becoming a more common practice and banks simply are not foreclosing - or holding off for a very very long time to do so.......what gives?

[davephx]

hmmm.. I misread your situation I was thinking foreclose and keep in owners name they simply don't want to foreclose the LTV is so low.

I can not think how this benefits them. But I have heard a case where there are all sorts of liens on a property and the bank doesn't want it back. That may be similar to your situation.

You are liable for upkeep which the city can enforce, but if you don't pay RE taxes, or mortgage .. you are maybe in a good situation if you wanted to keep the house or live there a long time? Except for credit reports of course.

[Whites376]

Originally Posted by davephx

hmmm.. I misread your situation I was thinking foreclose and keep in owners name they simply don't want to foreclose the LTV is so low.

I can not think how this benefits them. But I have heard a case where there are all sorts of liens on a property and the bank doesn't want it back. That may be similar to your situation.

You are liable for upkeep which the city can enforce, but if you don't pay RE taxes, or mortgage .. you are maybe in a good situation if you wanted to keep the house or live there a long time? Except for credit reports of course.

Well we filed Chapter 7 Bk so the payments will no longer be our responsibility, thus not effecting credit reports. We vacated the property at the lenders request for approval of a deed in lieu that was denied. So the property is vacant. We can't understand how that would benefit them either. Even with the LTV being so low, if they foreclose they still get something. The big thing is we don't want the house we walked away because the value was so low. We have moved on. After our BK is discharged, we are just going to try and sell it - and start over with a short sale with the bank. I guess we could always keep the house as a rental....and make some money off it, since we don't need to pay the bank, that would be money in our pockets.

[Lauren636]

The Bank will weigh all their options. If it is commercial property, they have to calculate and be ready to assume the cost of maintaining, insurance, etc. on the property. Sometimes the property value might be very low, the property/building might need a lot of work...there are a lot of considerations they have to make when deciding to take back a property. I don't think this is so much the case with residential property. It costs a lot for a Bank to foreclose on a property.

[Georgebow]

Originally Posted by Whites376

Well we filed Chapter 7 Bk so the payments will no longer be our responsibility, thus not effecting credit reports. We vacated the property at the lenders request for approval of a deed in lieu that was denied. So the property is vacant. We can't understand how that would benefit them either. Even with the LTV being so low, if they foreclose they still get something. The big thing is we don't want the house we walked away because the value was so low. We have moved on. After our BK is discharged, we are just going to try and sell it - and start over with a short sale with the bank. I guess we could always keep the house as a rental....and make some money off it, since we don't need to pay the bank, that would be money in our pockets.

The bank cannot force you out without removing you from Title. They cannot force you to expose yourself to extreme liability, a vacant home can void your insurance coverage and you will personally become liable for what happens on the property and to the home, like if a kid breaks his neck in your yard you'll be named liable in the lawsuit.

Even non owner occupied coverage will lapse if it is vacant for a certain period of time. Make sure you read your insurance policies.

[Whites376]

Originally Posted by Georgebow

The bank cannot force you out without removing you from Title. They cannot force you to expose yourself to extreme liability, a vacant home can void your insurance coverage and you will personally become liable for what happens on the property and to the home, like if a kid breaks his neck in your yard you'll be named liable in the lawsuit.

Even non owner occupied coverage will lapse if it is vacant for a certain period of time. Make sure you read your insurance policies.

Well we were told by our Bankruptcy lawyer to carry liability coverage on the property, which we are doing. Not cheap about $562 every six months, but this should cover us if anyone falls on the property, or in your instance, someone breaks in to the house and is hurt. Now when I call Chase they refer me to their property preservation department, which they know the house is vacant. They state that I need to send a letter to them stating we are surrendering the house. They will then create a work order and have someone come out change locks, mow lawn, etc......how can they change the locks if we are still on the title? The bankruptcy attorney says that we are still liable for the house, as far as maintenance until the bank transfers ownership, which means they have to foreclose. I am fully confused.

[rural juror]

I read/heard that banks don't want to foreclose because then they have to realize the loss on their books. As long as they carry your mortgage, it looks like they have an asset. It's all part of the big lie going on with the banks, wall street, federal reserve, etc... What if you sign a deed into the bank's name and file it with the Recording Clerk in your county? Does anyone know if this is a legitimate solution to Whites376's problem, or if there are ramifications?

[Whites376]

Originally Posted by rural juror

I read/heard that banks don't want to foreclose because then they have to realize the loss on their books. As long as they carry your mortgage, it looks like they have an asset. It's all part of the big lie going on with the banks, wall street, federal reserve, etc... What if you sign a deed into the bank's name and file it with the Recording Clerk in your county? Does anyone know if this is a legitimate solution to Whites376's problem, or if there are ramifications?

Our lawyer did mention (because we told him that the bank may not foreclose) to sign a quit claim deed, have it recorded with the county and then send it to Chase. He said he would be interested to see what happens. I did a bit of research, and technically, if we were to sign a quit claim deed over to them and have it recorded, it is irreversible. I am not sure if there are any ramifications. We plan on trying to sell the property after the bankruptcy is discharged. I would rather them not foreclose actually, then I have the bankrutpcy and the foreclosure on my credit report. If nothing, we have to maintain the property for a few years, then it will go to the county for back taxes.

Chase is so screwed. I had the loss mitigation lady tell me that the bankruptcy would not make a difference, they probably still would not foreclose, then I am told to contact the property preservation department (this coming from their bk dept). The PPD tells me that I need to send them a letter saying I am surrendering the property in the bankruptcy, they will come out change locks, winterize and mow grass, etc.....I am still going with what the lawyer says....I had the property winterized already, and I am paying to have the grass cut, snow removed. I am not trusting Chase on any of this.....if they are not going to foreclose, why would they maintain property, etc......I would think they would still want to protect their asset.......

[litehouse01]

Would you not be able to keep your house in the bankruptcy if its chapter 13?

[kbspots]

Did you buy a house or move out of town. I would move back in until the sheriff came and threw me out especially if you are just renting somewhere. If they don't foreclose why not? That is the only way they are going to get me out of my house is to forcibly remove me.

[Whites376]

Originally Posted by litehouse01

Would you not be able to keep your house in the bankruptcy if its chapter 13?

We filed Chapter 7 - we don't want to keep the house. We vacated in July (per Chase's request) to pursue the deed in lieu, we have moved into a rental in a better area, better schools etc.. We don't want to move back into the house at this point. The mortgage is underwater by almost $100k - the city where the house is located got hit very bad with foreclosures and it is slowly going downhill. Homes are selling for $10-20k and investors are coming in and buying them up. When we initally bought the house, it was to be a short term placement. The school district is getting bad and I did not want my son to go to the high school. Plus we had an 80% ARM and a 20% mortgage with a balloon payment due in 7 years of $17,000.00 - it was either leave now or in 7 years when we couldn't afford the balloon payment payoff.