Bankruptcy Discharge And Short Sale Process

babsy

LoanSafe Member
Aug 21, 2009
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16
Short Sale after BK

Not sure where to post my question, or if anyone can help me, I need some advice. I had a rental property that was included in bk chapter 7 in 2012. The BK has been discharged in 2012.

I surrendered the property to the mortgage lender at that time which was BAC as part of my bankruptcy proceedings. The property has been sitting empty since 2012 and I have been paying the condo fees on the property after I received the discharge until recently in 2015.

The 1st loan was with Bank of America for the amount of $277,000 until they sold the loan recently to another company called BSI financial in January 2015. I also had a HELOC on the property for $116 with Suntrust which was also included during the chapter 7 bk. I bought the property for $345,000 in 2004.

Recently BSI which now own the first loan contacted me to receive my consent to short sale the property and I agreed to list the property for a short sale to get my name off the title. We finally found a buyer who was willing to buy the property for $189,000 and the paper work was approved by BSI financials. However suntrust bank is refusing to release the lien on the HELOC. BSI agreed to settle suntrust with some amount which I don’t currently don't know how much but they won’t agree on the proposed amount and would not take their name off the deed.

I was just contacted by my listing agent today that SunTrust contacted them requesting for my paystuff, bank statement and 3 years tax returns before they would even consider a shortsale. Is that the normal process for a HELOC that has been discharged? BSI financials who owns the first loan on the property never required any paystuff, bank statements or any tax returns for me before approving the shortsale amount of $189,000.00

Can someone please let me know why I should provide Suntrust bank with my personal information on a HELOC loan that has been discharged in chapter 7 bk. If the property foreclose they lose all their money. Why should I give them my paystuff and bank statements? The property is in Maryland.


Also If I decided not to pay the amount due on the condo fees this year what happens? I've tried my best to be up to date with the fees. Would the condo assoc. come after me? Would I be personally reliable for the amount due? Since the bk was discharged three to 4 years ago I have worked so hard to rebuild my credit and I’m on the right track now.
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
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Hello Babsy,

This is very common for a second mortgage or HELOC to take this stance because they are the ones who will be shorted the most in a short sale scenario. After all, they are a business and their number one goal is profits.

The reason they are asking for your financials is to see how much money they can squeeze out of you. I wouldn't give them anything .

As long as you did not reaffirm both your first and second mortgage, you're not personally liable for any shortage which would be a deficiency. You could simply walk away and never talk to them and or deal with them again. But the caveat is that you will remain on title until the house is foreclosed.

What you will be liable for are any condo homeowners association fees that are left unpaid . That is really only thing I would be worried about if I were you at this moment.
 

bgriff

LoanSafe Member
Mar 11, 2012
164
16
18
Short Sale after BK

Not sure where to post my question, or if anyone can help me, I need some advice. I had a rental property that was included in bk chapter 7 in 2012. The BK has been discharged in 2012.

I surrendered the property to the mortgage lender at that time which was BAC as part of my bankruptcy proceedings. The property has been sitting empty since 2012 and I have been paying the condo fees on the property after I received the discharge until recently in 2015.

The 1st loan was with Bank of America for the amount of $277,000 until they sold the loan recently to another company called BSI financial in January 2015. I also had a HELOC on the property for $116 with Suntrust which was also included during the chapter 7 bk. I bought the property for $345,000 in 2004.

Recently BSI which now own the first loan contacted me to receive my consent to short sale the property and I agreed to list the property for a short sale to get my name off the title. We finally found a buyer who was willing to buy the property for $189,000 and the paper work was approved by BSI financials. However suntrust bank is refusing to release the lien on the HELOC. BSI agreed to settle suntrust with some amount which I don’t currently don't know how much but they won’t agree on the proposed amount and would not take their name off the deed.

I was just contacted by my listing agent today that SunTrust contacted them requesting for my paystuff, bank statement and 3 years tax returns before they would even consider a shortsale. Is that the normal process for a HELOC that has been discharged? BSI financials who owns the first loan on the property never required any paystuff, bank statements or any tax returns for me before approving the shortsale amount of $189,000.00

Can someone please let me know why I should provide Suntrust bank with my personal information on a HELOC loan that has been discharged in chapter 7 bk. If the property foreclose they lose all their money. Why should I give them my paystuff and bank statements? The property is in Maryland.


Also If I decided not to pay the amount due on the condo fees this year what happens? I've tried my best to be up to date with the fees. Would the condo assoc. come after me? Would I be personally reliable for the amount due? Since the bk was discharged three to 4 years ago I have worked so hard to rebuild my credit and I’m on the right track now.
Personally, I wouldn't have bothered with the short sale (the headache you're going through now is why). Suntrust is paying hardball and my guess is they do not know that their lien is worthless.

Here's what I would do : 1) stop paying the condo fees (if you worried about the credit hit, BSI will end up paying them or they risk losing the condo if the Condo Assoc. forecloses) 2) call Suntrust and tell the condo was included in BK7 and the offer from BSI is far more than they'll get if BSI in a foreclosure. 3) Call BSI and tell them what you did in 1 & 2 and if you can help, give you call 4) Relax and move on with your life - this mess is behind you
 
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