This is a Bankruptcy/Foreclosure question:
An elderly lady was talked into buying a property for a tenant that couldn't obtain financing to buy the house themselve. A Land Contact was drawn up and the tenant moved into the home and paid the 1st & 2nd mtg pmts directly. The tenant paid for a while but eventually had financial difficulties (eventually filing chapter 7
). No pmts were the straw that broke the camels back financially for the elderly lady, consequently needed to file chapter 7. She filed Chapter 7, 5/7/08 and included the 2 mortgages on the property. The bankruptcy was discharged 8/6/08 and the property went into foreclosure.
April/May of this year the elderly lady started receiving billing statements and collection calls for the mtg. She advised of her discharge bankruptcy but the lender stated until they were notified they still intend to collect.(of course they should have had all this since they did participate in the proceedings.) They wanted her to fax all info to them but she does not have a fax machine and further her box of legal documents, bank statements and check books were stolen when her primary residence was broken into. She eventually was able to give the her attorneys phone number and the bankruptcy case number. Here we are several months later they are still calling and mailing her statements in attempts to collect.
Meanwhile- A letter came from the city where the property is located wanting money for an updated renters occupancy permit. I investigated to find out why all this was happening and discovered the lenders foreclosure case was dismissed 6/2/09 - per court doc- "did not present evidence to the court that it owned the subject promisory note and mortgage." I also noted that the lender only had the 1st mortgage listed and not the second mtg in the foreclosure filing. I thought the lender misplaced their paperwork due to the multiple assignments. I discoved through county recorder records that the last assisgment on the property was released 7/08, within a month before the discharge. There doesn't appear to be any liens what so ever on the property *******
Oh, did I mention we also discovered the tenant is still living in the property. 2 1/2 years rent
free. Also there is over $4700 in delinquent property taxes owed but no lien has been attached to the property.
Before I discovered there wasn't any liens on the property I did try talking to the lender and advised we are willing to give them the proeprty. They want to go through a Deed in Leu of Forclosure proceedure which means anything owed on the property other than the lenders mortgages has to be paid and the tenant needs to be evicted. I advised the elderly lady could not afford any of that, but yet they will not proceed otherwise. I told them we need a deed in leu of lender mistake and lost their foreclosure action. They were taling the property as is but lost thier case, now they want her to pay. I told them about the bankruptcy as well and it still didn't matter.
So... The elderly lady can't afford to work with the lender. The Lender has been vilolating bankruptcy laws by trying to collect on the discharge debt. And further, it appears the lender doesn't have any rights to the property.
Finally the question: Since the elderly lady is no longer obligated for the mortgages due to the discharge chapter 7, and it appears the property title is free and clear, does she have the right and the legal ability to sell the property? We can't force the lender to take the property and can't afford to give it back to them if they would take it. At this point, with all the in between headheadaches with the lender I don't think there is a desire to try to work with them any more even if they would take the property delinquent taxes and tenant and all... Is there anything thing else she needs to be aware of? Thanks Ed (P.S. - I am considered as the brother from another mother to the elderly lady and family. Her son/brother of 23 years passed away after a 2yr battle with leukymia, which added to the emmotional stress as well as financial. He used to handle all this type fof stuff for her. I've been trying to fill his shoes to help out. She has been through a lot with her son passinng away at age 43, her house broken into and torn up like a huurican hit it. followed by her sister passing away. I need to help her get relief. She's aready required medical attention several times through all of this. Please advise as able. Thanks