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Do I need to force a forclosure?


OrdinaryJoe999
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Chronology of events:

1. Filed Bankruptcy - Discharged Chapter 7 in 2008

2. Chase takes over mortgage fro Washington mutual - does not

reaffirm mortgage 2009.

3. House destroyed 2010

4. House abandoned Jan 2010

5. Chase never forcloses

6. Insurance pays Chase Insurance proceeds but mortgage not paid off

Now we are trying to get a new mortgage loan but lenders say they can't lend to us as long as house is still in our name. How do I get property out of my name. The house is destroyed and I do not have the funds to repair.

Chase does not acknowledge any letters.

CRA reports show "included in BK" 0 balance

a couple CRA's also show "pending forclosure" which has been on there for a year under creditor comments, but Chase started forclosure and then cancelled.

I think that since the house was included in bankruptcy and never reaffirmed that why do I have to wait to see if Chase forecloses? Chase may never forclose....they dont seem to want the propererty. Property has been abandoned and looted and vandalized. Possibly they sent someone out and saw that....I don't know. The house (remains) is just a liability at this point.

Considering a deed in leiu but that may just mess up my credit. There are no court records as far as a forclosure and no credit entries.

I am in Washington, a non-judicial foreclosure state.

Help.

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..... Insurance pays Chase Insurance proceeds but mortgage not paid off...Help.

Have worked on similar situations with home owners in Louisiana after their last hurricane. Home owners with damaged houses were required to pay for the repairs before they received any money their mortgage companies.

The first way I would attack your problem... Make sure you have all your paperwork in order.

From the insurance company get a copy of the check that was sent to Chase.

Next in a certified letter to Chase - send a letter for vindication of the mortgage, explaining the situation. Ask them (do not demand) for their assistance to resolve the problem. The primary goal in contacting Chase is to get a Mortgage Satisfaction letter. Then going to your local courthouse with a release of lien. You can then contact the credit bureaus the have then update your credit report. This is a simple resolution to your problem - I am also sure it is not going to by that easy. This could be a start.

You do have a unique situation. Our Attorney is currently in Florida on business, when he gets back later this week, can explain your situation, possibly giving our Attorney in Washington State we use for Loan Modifications.

:)

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Have worked on similar situations with home owners in Louisiana after their last hurricane. Home owners with damaged houses were required to pay for the repairs before they received any money their mortgage companies.

The first way I would attack your problem... Make sure you have all your paperwork in order.

I do

From the insurance company get a copy of the check that was sent to Chase.

Have it

Next in a certified letter to Chase - send a letter for vindication of the mortgage, explaining the situation. Ask them (do not demand) for their assistance to resolve the problem. The primary goal in contacting Chase is to get a Mortgage Satisfaction letter. Then going to your local courthouse with a release of lien. You can then contact the credit bureaus the have then update your credit report. This is a simple resolution to your problem - I am also sure it is not going to by that easy. This could be a start.

Ok, sounds good....but the insurance proceeds were only $50,000 based on "actual cash value" and the mortgage loan is 100,000 or so. Even though we had one of those super-deluxe replacement value policies (but thats not relevant now I guess).

The morgage company wants me to repair the house of course but it is not possible for the $50,000. They can have the 50,000, but the problem is they just want to escrow it for repairs. They do not seem to understand that I cannot repair the property - it was abandoned by us over a year ago!

I will contact them to see if they are willing to discuss this.

My question is: Will making some kind of agreement that they will forgive the loan make my credit worse. I know the CRA's go by the date of the delinquncy (BK) which is 2008. If I make an agreement I don't want it to be listed as 2011....doesn't seem very fair to me to be penalized all over again....seems to be against the fed BK laws also......

You do have a unique situation. Our Attorney is currently in Florida on business, when he gets back later this week, can explain your situation, possibly giving our Attorney in Washington State we use for Loan Modifications.

:)

Thank you for you reply.

Edited by OrdinaryJoe999
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A little snag though- your mortgage wasn't paid off by your own admission. So even though the house may not have much value, the lien remains intact on the structure and the land its built on. A mortgage satisfaction letter would release the lien, so they're unlikely to issue it. And even if they did, then that leaves you as the free and clear owner of an abandoned destroyed property with likely back tax issues.

I don't see an easy way out of this one. Is the abandoned property worth anything? Maybe more than the deficiency on the mortgage? You don't have any personal liability (that's good). Call Chase. It costs a few grand to foreclose just in county fees (not even including attorney's fees!). Let them know you'll fork over the deed for free if they act now.

One small question- I've probably dealt with five different homeowner's insurance companies. Every single company requires the homeowner's policy to be in an amount as least as much as the mortgage, and because there is a mortgagee clause on the policy, the insurance company notifies the lender of any policy changes. So I am curious how an insurance payout on the property destruction was less than mortgage amount. Was it a total loss?

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The insurance amount was well over the mortgage amount. However, the insurance companies have decided that "structure insurance" only covers the "structure" NOT anything else like property, foundations etc which you mortgage with your house when you purchase......So the only thing you could purchase and be fully covered under the "structure" clause would be something in the line of a condo or a mobile home in a park where you DO NOT own the actual land that the home sits on. Even then the foundations would NOT be covered......just another loop hole for insurance companies to slip through. Many people hit by Katrina are still struggling with this unpleasant reality. Hazard insurance covers your house, mortgage insurance is the only thing that pays off your mortgage. However, mortgage insurance is like life insurance in that they only pay when someone dies, not when the property is destroyed. One other little loophole--you only have 6 months from the date of disaster for the "replacement coverage" to be effective. This means you have to front the money for all replacement costs and then hope the insurance company will reinburse you. Because, most insurance companies take a long time to pay the claim (months). In our case it took over 6 months, but sometimes (like with Katrina) they take much longer.

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