Bankruptcy? Who to contact?

8 Replies

Hi all.  My partner and I were driving for houses, and came across one that appeared empty.  It had a "winterized" sign on the front door so we came home and researched it.  The house is still in the ladies' name, with her buying the house in 2007.  

I am new to this, and have a limited understanding of all this, but we searched the Register of Deeds for our county and found that she filed bankruptcy in 2015.  Like I said before, the owner of the property is still this lady, NOT a bank.  

Who do we call or write?  She's still the owner, not the bank.  (I'm not sure how bankruptcies work, so who else could own the property?)  This is a nice house, just needs some sprucing up (we could see in the windows and the roof & a/c are good indicators usually, to the condition of a house).

Thanks for any direction you can give us!

M.

The lady still owns it and if the BK was actually completed/discharged....she still owns it, just isn't personally liable for the debt anymore. Two choices; either do a short with the owner, which they would little incentive to cooperate with, or wait for the foreclosure auction or it being listed as an REO. BTW the BK doesn't change the short sale process.

@Wayne Brooks 

Thank you for your reply!!  I JUST saw your name in another thread about Ocwen, so it's funny you've written me!  

We'd like to contact the lady, and just ask the questions.  What are the questions??  (ha ha)  

Personally, I would really just ask the same questions that you would ask if you were seeking to purchase from a private owner. Ask if she is interested in selling the house, does she live there, what she knows needs to be done to the home, etc.

I would not automatically assume she wants to sell because of filing BK, but I also wouldn't assume she doesn't want to, either.

Who knows, a lot can change in two years. It's been two years since she's filed, maybe she's in a much better place now, and does not need the help. On the other side of that, maybe selling the house to you would help her if her situation has not improved.

If you get to know her a bit, you may even be able to ask why she had to file BK. That may help you determine what to offer and what you can do to come to a mutually beneficial agreement.

Thanks Ashley!  She does not live in the house; it's empty and appears to have been for some time.  Actually, it was "winterized" last year.  :)

We are going to write her a letter.  We are personable anyway, and we love the idea of everyone walking away happy!

Thanks again.

Hey @Marna N. ,

If the house says Winterized on it, who do you think winterized it?? It is probably in the process of becoming the bank's property. The quickest and easiest way to find out is to ask the neighbors. Neighbors usually know who lives next to them.

Write her a letter also. It couldnt hurt.  I bet she stopped paying on the house a while back and the bank wanted to mitigate their losses. Thats why they winterized it.

Even if the BK has completed with the discharge (ie debtor released from debt), it is not a given that the owner has lost house to the bank. Nothing in this thread is conclusive one way or the other.  

Your best source of information would be a preliminary title search for a few hundred bucks, given "it's a nice house".

Thank you @Jeff B. and @Rick Pozos .

We are definitely going to write her a letter.  Hopefully she will contact us and we can get accurate info from her.  If it was NOT discharged in teh BK, then she's supposed to continue payments on it.  Why wouldn't she be living there?  My guess is that either way, she is not making payments on it.  Hence, your point @Jeff B. about its being winterized. :/  Hmmmm....

(Sorry Jeff B, I can't get your name to turn blue to tag you.  Hope you see this!)

Thanks so much!!!

Jeff B.

Hi Marna -

@Wayne Brooks is right on the money - short with the bank or wait for foreclosure.  

From the owner's standpoint getting a letter from you will do one of two things - it will either bring up bad memories and she will throw it away or it will give her a chance to close out the last loose-end from her bankruptcy. I am a bankruptcy attorney and get calls from clients 1, 2 and sometimes 3 years after they "surrendered" their home in bankruptcy and the bank still has not foreclosed. Homeowner wants to move on but this is still showing as in her name and keeping her from doing so. The mortgage company can't come after her for money but if the grass grows too high the city will fine the homeowner, if she had an HOA on the property many states allow the HOA to keep billing her each month for dues after the bankruptcy until the home is out of her name. She will likely accept any reasonable short sale offer but then you have to get the bank to accept it. If it is Ocwen then you have an uphill battle - most of their admin is based outside the US and they are terrible to deal with (in my opinion).

If you haven't sent the letter yet then when you write it try and frame it as a way you can help her to close out that one last loose end.  

Also, one of the recent podcast guests said he got the city to appoint him as "receiver" on the derelict property giving him a lien superior to the mortgage for any money or work done to the property.  Once he was done he did a foreclosure of his superior lien and got the property at the auction free and clear of the mortgage company!  I love this idea and will be checking with my local officials about "receivership" opportunities to see if it is possible in my town.

Good luck.  

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