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Permalink Reply by Drew Ludlow on January 6, 2014 at 12:26pm

Brian,

Good to know this - was not aware chapters are handled differently.  Always thought at the very least, you could send the offer to the attorney and have him petition the court to allow the sale.  Last time I did that on a non-short sale, it only took 3 weeks.

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Permalink Reply by Timothy Lee on January 8, 2014 at 8:56am

I also want to just throw another caution flag at you:  I had a situation last year where we were able to get the court to allow the short sale AFTER the bankruptcy was closed, but the court wouldn't allow us to release any monies to the realtors or our law firm.   Multiple pleadings later, we were able to get the realtors paid, but our office never was able to collect a penny for the short sale work.  The court's reasoning was that, because our firm had conducted the bankruptcy, we could not make any further money off of the sale of the property.  Every BK is different, and of course, every state has some different laws, but proceed with caution.

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Permalink Reply by Brian Guidry on January 13, 2014 at 11:23am

This is a small fact that my bankruptcy lawyer either overlooked or didn't bother to tell me that could have damaged my credit further if I had listened to her and filed chapter 7 (thankfully i didn't). If the mortgage is HUD/FHA backed and is going through a short sale, FHA Pre-Foreclosure Sale (PFS) outlined mortgagee letter 2008-43 states that if the mortgagee goes through the short sale program in good faith but, does not sell the house and the mortgagor forecloses on the property they CAN NOT pursue a deficency judgement in court afterwards. Other than defaulting on my mortgage I was able to rescue my credit after my divorce and was able to finally sell my house last week through a short sale (BOA was my mortgage company) and it only took a shade under 3 years to complete.

If your client is pursuing bankruptcy soley on the premise of avoiding a deficency judgement (like I was going to do) and is an FHA backed mortgage you might want to advise him to hold off on filing. Not all bankruptcy lawyers are trying to line their pockets on the backs of people in a financial bind but, I think mine was. 

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Permalink Reply by Brian Guidry on January 13, 2014 at 11:51am

Oops, I didn't realize GSE meant government sponsored enterprise, I'll take my 2 cents back and be on my way.

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Permalink Reply by Vikki Lucas on January 16, 2014 at 5:25am

Hi, Drew: You mentioned that the servicer is SPS. However this turns out, I recently got the run around from them and finally learned that the loan was in their BANKRUPTCY department. So there's a heads up for you. Ask for that Department, when you are finally able to call in.

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Permalink Reply by Jackie Kumm on January 17, 2014 at 3:16am

Drew, Ask the seller what Chapter they filed, most common is CH 7,  In my area, if you send the BK trustee your ATP, the offer, all amrs length dox, a copy of the prem HUD, they will let you move forward with the short sale.  the isssue is sometimes getting the file out of the BK department with the sellers mortgage company and back with the short sale dept or loss mitt..  Call me, and I can try to help.  651-430--7515

 

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Permalink Reply by Drew Ludlow on January 17, 2014 at 1:37pm

Thanks Jackie.... This is actually, is not an FHA short sale, so thus, no ATP.  SPS would not release the file to the SS department while still in BK.  Fortunately, the Seller requested a dismissal of the BK so she could do a SS.

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