Sale Of House Set For 7/6...

nymess

LoanSafe Member
Nov 9, 2008
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Writing for a friend... She lives in upstate, NY. She made her last payment 2 yrs ago and received a letter today saying the sale of her house will be 7/6. She really wants to try and save the house, any suggestions ?? I suggested trying to do a modification, but since the mortgage is only in her husbands name the bank won't deal with her. Her name is on the deed, and her husband moved out and they are getting a divorce. .....
 

Moe Bedard

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Hello,

Unfortunately, there is not much she can do since she is not on the mortgage other than get her ex to cooperate. The mortgage holder is foreclosing on the mortgagee which would be her husband and they have a legally binding contract.
 

nymess

LoanSafe Member
Nov 9, 2008
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If she can get her ex to cooperate do you think there is anyway at this point for them to stop the sale of the house?
Thank you
 

Moe Bedard

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You are welcome and yes, that may do the trick. Please let us know how this turns our and if he cooperates, we can advise you further.
 

isisis

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Jun 22, 2010
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There may be various ways depending on her situation. Homeowners aren't helpless even though it can seem like it when it's just you against the bank. It's not easy but neither is losing your home.
See if your friends husband will file a quit claim with the county. That won't take him off the loan but it means she's the one they have to deal with. That's what happened with me, my ex quit claimed.
I'm thinking though if her name is on the deed they should have to deal with her no matter what. Remember that banks don't really want to work with homeowners to modify so they aren't necessarily going to be honest with you. Sometimes you need to assert your rights by learning what they are. If you want to tell us more about your friend's situation I can try to give you some ideas.
 
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Moe Bedard

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Please keep in mind everyone that the foreclosure action is on the mortgagee/ aka the borrower and it doesn't matter who is on the deed. Even if he quitclaims the home to her, they have the right to foreclose and take the property back regardless if she is on title because the lender owns the lien and by law has the right to foreclose.
 

despritfreya

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Sep 8, 2011
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Please keep in mind everyone that the foreclosure action is on the mortgagee/ aka the borrower and it doesn't matter who is on the deed. Even if he quitclaims the home to her, they have the right to foreclose and take the property back regardless if she is on title because the lender owns the lien and by law has the right to foreclose.
Please be careful here. Privity of contract is not generally required as it relates to bankruptcy. OP 's friend holds title to property that, once the bk is filed, becomes property of the bk estate and lender cannot foreclose without lifting the protection of the automatic stay. Chapter 11, 12 and/or 13 bk can provide for curing and paying lienholder. OP's friend needs to discuss with a bk attny.

Please see such cases as the following from NY:

In re Rutledge, 208 B.R. 624 (Bankr. E.D.N.Y., 1997)
In re Cady, 440 B.R. 16 (Bankr. N.D.N.Y., 2010)
In re Smith, 469 B.R. 198 (Bankr. S.D.N.Y., 2012)

Des.
 

Moe Bedard

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Thanks for the info Des.

OK, maybe they can claim bankruptcy and it may work. But that will be just a temporary band aid. The mortgage servicer will most likely have the automatic stay removed and move to foreclose within 60-90 days after the BK is filed.
 

despritfreya

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Sep 8, 2011
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Thanks for the info Des.

OK, maybe they can claim bankruptcy and it may work. But that will be just a temporary band aid. The mortgage servicer will most likely have the automatic stay removed and move to foreclose within 60-90 days after the BK is filed.
It is only temporary if the Debtor cannot afford the payments and/or is unsuccessful in negotiating some sort of modification.

If OP's friend provides a standard Chapter 13 Plan (cure and maintain) and/or properly utilizes loss mitigation referenced in Smith below (apparently NY has such a program - at least in the Southern District - my guess is that OP's friend is in the Northern District), the lienholder will most likely be required to accept payments under the Plan and/or negotiate some sort of modification.

"After a careful reading of the decisions of the bankruptcy courts that have dealt with this issue, this Court is persuaded by, and agrees with, the decisions that have followed the reasoning in Johnson and applied it to situations in which a transferee-debtor who is not the original obligor under a mortgage, and who is without any personal liability under the mortgage, may still treat the claim of the mortgage arrears in a Chapter 13 plan" In re Rutledge, 208 B.R. 624 (Bankr. E.D.N.Y., 1997)

"The Court finds that loss mitigation should proceed. The question of whether the creditor consents to the jurisdiction of the Court is a red herring, as the home is property of the estate, and the Loss Mitigation Order was entered, unopposed and after notice to the creditor, and has not been appealed. 1. The transfer of the home from Ms. Challenger to the Debtor did not violate the "due on sale" provision, for the reasoning stated in In re Lumpkin and other bankruptcy courts within the Second Circuit. The facts in the matter at bar are indistinguishable from Lumpkin with respect to the "due on sale" provision, and the Court adopts that court's reasoning. 2. The mortgage is a claim in the Debtor's chapter 13 case, even though the Debtor does not have personal liability on the debt, in accordance with established Supreme Court precedent. 3. As the mortgage is a claim, the home is property of the estate, and the creditor failed to object to loss mitigation when it was first requested in August 2011 or appeal the Loss Mitigation Order, there is no reason why the creditor is not required to obey the Loss Mitigation Order and engage in the loss mitigation process with this Debtor." In re Smith, 469 B.R. 198 (Bankr. S.D.N.Y., 2012)

I have been there/done that and know this issue well. Again, OP's friend needs to consult with a bk attny.

Des.
 

Moe Bedard

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I didn't know that...

What ended up happening in your case?