Good afternoon all.

I am located in Pennsylvania. I was working on a B of A FHA Streamline short sale. I was schedule to have short sale approval this week. As the file was being reviewed for file Q/A - B of A discovered that the borrower (homeowner) filed Chapter 7 BK on 12-31-13. Of course the file was sent to the Bankruptcy Dept of B of A - I have a new BK Specialist assigned 1-7-14 (All of this happened 1-6 and 1-7-14).  The sellers didn't have the courtesy to make me aware that they filed bankruptcy (despite my numerous discussion on the effect of BK on a short sale).

Can anyone provide advice on how to proceed with respect to an FHA Short Sale that now involves a chapter 7 bankruptcy? I have cash buyers ready to close...

Views: 137

Replies to This Discussion

That file is dead until the BK is resolved / discharged by the court.  There is a bigger issue you need to think about - that is, your client does not value you or your services enough to inform you of what they are doing.

Thanks Thom - I tend to agree with the 2nd part of your response. When I learned about the BK filing, it felt like I just got kicked in the jaw.

Jason 

I agree with part of Thom Colby's first sentence post. Its not necessarily dead just "suspended". 

Yes they should have let you know, but don't take it personal. Perhaps those clients had much bigger debt problems than just their mortgage. A collection agents threat to repossess automobiles comes to mind. 

Peoples minds get numb over debt issues and they may have forgotten every thing you told them especially with the stress of the holidays. 

Hang in there this causes inevitable delays but does not necessarily kill the transaction. 

You are unlikely to get the help of the seller's atty. They don't care about anyone else and don't lift a finger w/o $$. You'll likely hear that the buyer can just pick up the house after the foreclosure. The BK referee won't do anything, they aren't paid to and don't care about everyone else lost in the sale. You can talk to the BK atty and see if you can get him to move to release the property. If not, you can't do a thing until the BK is discharged, months from now.

Being screwed over by schisty servicer tricks is the biggest problem followed by sellers walking because their pencil needs to be sharpened or the mothership called. No skin in the game, so they don't mind that you wasted hours and dollars helping them out. Human nature, unfortunately. A far 3rd for me has been agents playing games. So, you're just enjoying the benefits of being in the game..??

I agree that the sellers are not necessarily trying to stick it to you. They are most likely completely unaware of how the bankruptcy will affect their short sale. At this point, you have 3 choices. Wait for the bankruptcy to be completed and a discharge filed before proceeding. Ask the bankruptcy trustee to release this home from the bankruptcy since there is no equity (providing there is no liability issue). Cancel the listing.

The debtor (seller) needs to request the property be removed from the BK so it can be sold - not the agent....

RSS

Members

© 2024   Created by Brett Goldsmith.   Powered by

Badges  |  Report an Issue  |  Terms of Service

********************************** like buttons ************************