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Roger
Roger, Lawyer
Category: Real Estate Law
Satisfied Customers: 27079
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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hi I have a question me and my wife had a chapter 7 bankruptcy

Resolved Question:

hi I have a question me and my wife had a chapter 7 bankruptcy we where discharged in 05/03/11 my lawyer surrender the home in bankruptcy but I went to the court house and a we are still listed on the deed trying to buy a home with va but the reg says you have to wait 2 years after they take it off but my question is when due they have to take us off they already foreclosed a long time ago
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Roger replied 1 year ago.

Kirk Adams : Hi - my name is XXXXX XXXXX I'm a Real Estate litigation attorney. Thanks for your question.
Kirk Adams : Are you sure that the lender has already foreclosed on the property? Usually, when a foreclosure sale occurs, the buyer (even if it is the lender) is issued a deed from the foreclosing party.
Kirk Adams : Thus, it may be that the lender hasn't even begun foreclosure proceedings on the property.
Kirk Adams : With the large back-log of foreclosures, this isn't really uncommon.
Kirk Adams : First, you need to find out whether a foreclosure has actually been done. If not, then you could contact the lender and offer a deed to the lender for the property, which would allow it to avoid having to foreclose. Since you've already been discharged of the debt through bankruptcy, the lender would likely accept this.
Kirk Adams : Also, taking this action would get the property out of your name.
Kirk Adams : Generally, the FHA mortgage requirements for foreclosures is 3 years from the date of the sale OR 2 years from bankruptcy discharge.
Customer:

so are you saying we are ok that's what I am tring to find out I went down to court house and we are still listed but I received a letter in the mail from there lawer they where having a auction on the property so if they did not foreclose how are they selling it when it is still in our names

Customer:

kirk are you saying where all right because it has been 2years

Kirk Adams : Well, there's no LAW that has a 2 or 3 year waiting period.
Kirk Adams : This is just a standard employed by the FHA (which is an advisory rule - - not a mandated law).
Kirk Adams : Thus, it's ultimately up to the lender as to whether it approves you or wants something more done.
Kirk Adams : But, since it's been at least 2 years since the bankruptcy discharge, you should be ok.
Kirk Adams : Your discharge of this debt would release you from any liability for the loan, but the lender may not like the fact that the property is still in your name. Thus, your new lender may ask you to try and rid yourself of this property - - offer a deed/deed in lieu of foreclosure to the lender before moving forward, etc.
Kirk Adams : Every lender has its own set of internal rules and checks/balances, so I can't say what this lender may demand. However, under the law, you can buy a house the day after you're discharged. BUT, the FHA standards and bank regulations may require you to do other things if you want financing with that lender.
Customer:

that's what I am dealing with because if they pull a detail report and it shows me and my wife on the deed they are telling me it is 2 years from that point put legally they can keep me hostige

Kirk Adams : As I said, the general standard is that 2 years from discharge of bankruptcy, you can attempt to purchase a new property.
Kirk Adams : The lender doesn't have to wait 2 years from the date the title to the property is transferred - - but it CAN if it chooses to do so.
Kirk Adams : The only way to speed up the title transfer from you and your spouse to the lender - - outside of the foreclosure sale - - is by issuing a deed in lieu of foreclosure.
Customer:

kirk are you saying that we have to wait for the bank to sale the property before it comes out of our names deed in lieu of foreclosure is not a option the house is trashed they did not put any antifreeze cracked all the pipes tree went through the roof of the shed

Kirk Adams :

A deed in lieu is still an option if the property is still in your name and the lender doesn't want to go through the foreclosure process. It may reject the deed in lieu, but that's up to the lender.

Kirk Adams :

Also, in a situation where you're not liable for the deficiency judgment amount because of your bankruptcy discharge, a deed in lieu is really the simplest way to end this matter.

Kirk Adams :

To answer your question, NO you are not LEGALLY REQUIRED to wait until after your name comes off of the deed to be eligible for a new loan or to buy a house.

Kirk Adams :

However, the lender may require this before it approves a loan. As I said before, the bank has the right to make this call.

Customer:

kirk should our names have been transferred off the deed when we filed bankrupcy

Kirk Adams :

No.

Kirk Adams :

Title to the property isn't effected by the bankruptcy - - so the deed would not be changed.

Kirk Adams :

All that bankruptcy did was cancel your obligation to pay the mortgage.

Kirk Adams :

The title to the property would not transfer UNTIL the bank actually goes through a foreclosure sale OR UNTIL you issue a deed to the lender.

Customer:

so in opoin kirk what should we do

Kirk Adams :

The best option is to offer your lender on the discharged mortgage a deed in lieu of foreclosure to get your name off of the property immediately.

Customer:

what does that mean deed of foreclosure

Customer:

how due we due that

Kirk Adams :

It means that you and your spouse would issue/execute a deed transferring the property back to the lender instead of forcing the lender to go through foreclosure. Thus, you offer the deed IN LIEU of foreclosure.

Kirk Adams :

The process is as simple as calling the lender and asking it if they'll accept a deed in lieu of foreclosure.

Kirk Adams :

SOMETIMES, lenders aren't agreeable because the lender gives up its right to sue for the deficiency balance if the forelcosure sale doesn't bring enough to pay the loan off in full. However, that's not an issue in your case because you've already been discharged of the debt.

Kirk Adams :

Thus, the lender would likely be willing to accept a deed in lieu - - they can get to the same place a foreclosure sale would get them without having to go through the entire process - - which saves it time and money.

Customer:

what if they say no due they have a choice under law

Kirk Adams :

Yes, they can refuse to accept the deed in lieu and opt for proceeding with foreclosure - - I don't know what type of advantage it would give the lender in this instance, but it is possible for the lender to refuse the deed.

Customer:

kirk its been 2years I would think that they have already foreclosed

Kirk Adams :

The lender has quite a bit of time to foreclose after default, so it is not impossible that the lender hasn't yet foreclosed.

Kirk Adams :

Also, IF the lender had foreclosed, the property should not still be in your name.

Kirk Adams :

Instead, the lender would have issued a substituted trustee or trustee's deed to the purchaser at the foreclosure sale. So there would be a new deed showing title in someone else's name - - not yours.

Customer:

I have a letter sent from there lawyers dated april16 they where having a sale of the property may 15 and it will be listed in the paper

Kirk Adams :

Ok. Well, IF the said occurred (which they sometimes are stopped for various reasons), then a new deed should have been issued sometime after May 15th transferring the property to the buyer.

Kirk Adams :

You should try to call the attorney for the lender and asking where this stands. He/she should be willing to tell you something.

Customer:

well I went down this morning to the court house and we are still listed still getting property taxes on the home from the town

Kirk Adams :

Well, you can't rely on the property tax information.

Kirk Adams :

It's only updated once a year.....usually every January/February.

Kirk Adams :

You will need to check the land records to see if a foreclosure has been filed and whether a subsequent deed has been issued by the lender to a buyer.

Customer:

I try to call I don't know where I will get its benifical they would not work with us before we filed

Kirk Adams :

If you haven't checked the land records, then that's a good place to start as well. The court clerk should help you track this down.

Customer:

thanks kirk

Roger, Lawyer
Category: Real Estate Law
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Experience: BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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