Mortgage written off?

Question

Firstly, i want sure if this is the proper forum to ask this question.
Also, please pardon my ignorance with regard to these topics, I've only purchased 1 home so far, and am trying to assist my wife and her father.
My father-in-law just told us that his house was written off a few years ago after some sort of bankruptcy.

His wife passed away last year and he wants to start preparing his will.

This was my wife's childhood home and she wants to try and keep the house in the family ..... which doesn't seem likely to me once her father passes, considering it was written off and they don't have the title.

1. How can we find out who, if anyone, has the title?
2. Is it possible to reopen the account and pay it off?
3. If so, how can we find out what that would cost? (The written off debt plus any fees, etc...)
4. If its not possible to pay the written off debt, or otherwise save the house, does the bank (or whoever) come confiscate the house AND belongings when her father passes?

She would like to at least save the memorabilia inside the house. Should she slowly start taking the stuff now?... she really doesn't want to do that if it isn't necessary.

Again, pardon my ignorance, there is likely an obvious and apparent answer to this question.

Im trying to ease my wife and father in laws concerns, as well as formulate a plan before we sit down with her father to aid in the will.

(I posted in the Florida section as I didn't see any specific mortgage or debt sections, feel free to relocate the thread as needed.)

Thanks for any input you can provide

Jaysen Medhurst · Answer

Is your FIL living in the house, @Greg Cannon? This wasn't a foreclosure, right? If the mortgage was "written off" he should have received some documentation from this mortgage company to that effect. Look at that paperwork. Also, a bankruptcy is a legal proceeding. There should be court records indicating the specifics. Of course, I'm not bankruptcy attorney, so take that with a grain of salt. There shouldn't be any kind of account to "re-open," if a debt is written off.

I'm also very skeptical whenever I hear someone use that term, "written off." Most people don't really understand what that means and misuse it all the time.

I'd start with the municipal web site to see who is listed as the owner there. Assuming it's your FIL is listed as the owner, you can pay a title company to do a title search and confirm there are no liens on the property. Has he been paying his taxes, water bills, etc.?

As far as what happens when your FIL passes, that really all depends on the above AND the state of his current finances. Sounds like there is A LOT about the situation that still needs to be clarified.

Tom Gimer · Answer

Pull the BK docket (PACER) and determine if there was a motion to strip the lien filed and granted. If not, there is still a lien that needs to be paid and released in order to sell the property or transfer it free and clear.

Wayne Brooks · Answer

@David Martin You are correct in your assumption. But, there is some confusion here. First, they said the loan was “written off”....a misstatement (perhaps “charged off”). This doesn’t happen with a performing loan. Also, my earlier reference was assuming the house debt was Included in the BK. If they are making payments, the the house loan was reaffirmed and personal responsibility for the loan was not removed.
The varying facts do not add up.

David Martin · Answer

Apologies if this is just rephrasing, but wanted to clarify my understanding, and might helps others. In essence this sounds like you are saying that the mortgage still exists as a lien again the title, however, the recourse the lender has is now limited to just seizure of the property, and not trying to chase collections from the FIL. As things are occurring now, the bank is being paid, so they have no interest in property seizure or foreclosure, as it is a performing note, so the FIL currently has the opportunity to conduct control of it in the same way a normal person would, which should allow him to pass this via normal methods (living trust for example) to heirs, provided the payments on the note have no interruption.

Am I off on any of that?

Wayne Brooks · Answer

In a bankruptcy, the Debt is no longer owed Personally by the individual. But...the Mortgage, which secured that debt, is still in effect and is still a lien on that property. Your FIL still holds title. Personal belongs are not affected by the debt on the house

Greg Cannon · Answer

Awesome. I'll start there and see what we come up with.

Yes the FIL still loves there. His wife handled all the paperwork and they are having a hard time finding it.

I'll look into the municipal web site and a title company.

Written off were his words. And as I stated, I know nothing about this.

Thanks for the guidance!

Mortgage written off?

Mortgage written off?

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