Posted by MrWi on July 07, 2003 at 13:59:48:
Thanks!!!
I knew that the bank could not proceed with a foreclosure action but was not sure if I should try and negotiate the short sale and then get the house released. Her atty has advised her to try to keep “selling the house”.
How to proceed on this one - Posted by MrWi
Posted by MrWi on July 07, 2003 at 13:36:19:
I have a widow that has contacted me about her situation. She has a house worth ARV $105,000, with about $10,000 in repairs and she owes approx $65,000. She has not made a payment on the house since Feb of 2003, and just declared bankruptcy about a month ago. She is behind on the payments due to a problem with her inheritance from her husband’s death (long seperate story involving a seperate law suit against the lawyer who didn’t file will properly). She got into financial trouble and at the advice of new atty declared bankruptcy. The bankruptcy has gone to court but will not be discharged until the other suit is settled, which could be a few years down the road. I was wondering who I need to contact first? The bank to see if they would agree to a short sale? ( I have explained the ramifications of this to her and she understands and has no problem doing this) or should I contact the Bankruptcy atty/trustee first to see if he would release the house from the bankruptcy if I could get the bank to agree to a short sale. The widow has already moved out of the house to an apartment and is just literally walking away from the house. She does not want it to go to foreclosure if she can help it but is willing to let it go if that is what happens. So who do I contact first? Bank or Trustee???
Re: How to proceed on this one - Posted by B.L.Renfrow
Posted by B.L.Renfrow on July 08, 2003 at 24:01:09:
You should contact the trustee. The debtor’s attorney has no control over whether the trustee will release assets.
You don’t mention which chapter the debtor has filed under, but I suspect it’s chapter 7. In that case, I would anticipate the lender will quickly file a motion for relief of the stay so they can proceed with foreclosure. This is routinely granted by the court unless the debtor contests the motion and can show compelling evidence why it shouldn’t be granted.
As for short sale, if the FMV is $105k (or even $95k, if your repair estimate is accurate) and they are only owed $65k, what possible motivation would they have to agree to a short sale? Would you, if you were the lender? They will make out just fine by proceeding with foreclosure and sale. You can always ask, but I doubt they will consider it in this case.
Brian (NY)
Re: How to proceed on this one - Posted by Randy
Posted by Randy on July 07, 2003 at 13:53:46:
Bankruptcy atty/trustee first! If she is in Bankruptcy as you say?NO ONE can do anything with the property without the Bankruptcy Trusties approval. The bank can?t foreclose, she can?t sell? a Bankruptcy filing stops all legal proceedings and preserves all assets for future distribution to creditors.