BiggerPockets

Any foreclosure filing done before the foreclosure sale automatically puts a stay on the foreclosure. If the foreclosure moved forward in error, the sale will have to be reversed.

How is that? Just wondering.

A foreclosure auction might also be loosely interpreted as Chase selling the home to Fannie Mae.
If Fannie was the investor holding the note and Chase was just servicing the note the deed will not go to Chase but to "National Federal Mortgage" (I think I got it right) which is Fannie. So the owner may be right even though the home really wasn't technically sold but Fannie took the deed back through foreclosure.

They brought the paper work to me the other day. Even though I told them there was not much I can do because I have never dealt with foreclosures. They had filed BK chapter 13. Then Chase went ahead with the auction and Fanny bought the house. I don't understand it but, that is what was done. Fanny told them to get out and then when told they had filed chpt. 13 was told to hold off by the realtor.

Well said Jon.

The act of foreclosing on a property is a form of "debt collection". In bankruptcy, there is what is called an "automatic stay" that prohibits debt collection activity by creditors from proceeding (usually only until a "plan" has been presented to the BK court). Of course, it becomes necessary to inform the creditors of the bankruptcy filing; once that happens, they usually back off and wait for discharge or the more common dismissal of the bankruptcy.

IMO, the bankruptcy attorney should be aware of how to proceed - this stuff happens in their practice.

A few months back I was at the sheriff sale for my county. A certain property was going to foreclosure; the sheriff asked the "attorney on the writ" (the lender's attorney) for a bid. Attorney replied that he had recieved a call that the defendant had said they were filing bankruptcy, and that he was awaiting for the FAX confirmation of that to be sent to his office; he then requested that his case be deferred to the end of the sale to allow for the confirmation to happen. That FAX apparently never came, and it was auctioned at the end. But this shows that the debt collection activity is deliberately avoided if there is a true bankruptcy, and not just somebody saying so just to postpone the matter.