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Roger
Roger, Attorney
Category: Bankruptcy Law
Satisfied Customers: 31672
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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My bank notified me that they will consider foreclosure on

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My bank notified me that they will consider foreclosure on September 13. They want me to complete an expense and income form to help me through my difficulties. I have no problem filling it out since my other properties are also in default. However, I do own a piece of property that has no mortgage and it is has been sold with a closing date of June 14 and I was afraid that the bank could somehow prevent the closing. Can they?
Hi - my name is XXXXX XXXXX I'm a Bankruptcy litigation attorney. Thanks for your question.

If this property doesn't have a lien against it by this bank, and if this bank doesn't have a judgment against you (which would become a judgment lien against this property), then there should be no way for the lender to stop or interrupt your transaction because it has no legal security interest or right to the proceeds from the transaction.

Customer: replied 4 years ago.


But if I complete the expense/asset form they want before June 13 (which delays foreclosure)they will see that I own another house with no mortgage. Would they then slap me with a judgement lien on this property and prevent me from selling it. Why wouldn't they want the profit to reduce the mortgage I owe them?

It would be difficult for the bank to do this because it would have to first sue you, which takes at least 30 days from the time the suit is filed to try and obtain a judgment. Thus, it would be really hard for the lender to pull this off - - from a timing perspective.

However, it would be possible for the lender to file suit and then request an injunction to stop you from selling the house until the lawsuit is completed in order to preserve the property for liquidation. But, if this lender is secured by other property, it's not likely that it would do this, and it's not likely the judge would allow it unless the collateral is worth far less than the loan balance.
Customer: replied 4 years ago.

What are the ramifications legally if I complete the asset form and leave this property out since it is under contract and due to close Jun 13. The sales price is only $30k but it is all profit since I carry no mortgage on it. I plan to use it to pay credit cards and my current primary mortgage buying me more time to find work.

It's definitely not a good idea to omit the property from your form. It could be considered fraud and could also put your application in jeopardy if the lender bases your application on false information.

You could be sued for fraud if this were done.

Thus, you may be better off just to wait until after the transaction so you don't have to list the asset.
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