I filed for chapter 7 and it was discharged- I included my home in Bend, Or. the Bank wants me to sign a deed in lieu, Why?

Asked by Mike S., 97229 Tue Jul 5, 2011

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Jake Heelan’s answer
Jake Heelan, Agent, Portland, OR
Wed Mar 6, 2013
They want you to sign a Deed In Lieu because it is cheaper and faster for them to reclaim the asset than completing the Foreclosure process, which at this time (and for the time being) is limited to the Judicial Foreclosure process. Virtually all Trust Deed Sales have been stopped while certain cases are before the OR Supreme Court.

Your Bankruptcy attorney should be willing and able to advise you as to the advisability of this course.
0 votes
Roy Bush, Both Buyer And Seller, Phoenix, AZ
Sun Jul 7, 2013
I had a buyer that wanted to buy a home in Arizona, but he had a Chapter 7 bankruptcy 7 months ago. After researching the web I found a loan program at http://www.cfsflex.com, they allow a mortgage after a foreclosure, short sale, or bankruptcy. There is only a six month waiting period. Good to see lending options coming back.
0 votes
Russ Ravary, Agent, Commerce Township, MI
Wed Mar 6, 2013
I think this is a question best asked by a real estate attorney. Call one in your area today
0 votes
Chuck Simpson, Agent, Gresham, OR
Tue Nov 1, 2011
I am sensing that this is a second home, not your primary residence. If that is the case, your second home may not be protected in the bankruptsy. Kind of like having three cars, in a bankruptsy, you only need one, they can take the others.
Best wishes
0 votes
Okay, Home Owner, Yelm, WA
Sat Aug 13, 2011
a deed in lieu is a way to avoid foreclosure ("in lieu" of foreclosure), a deed is given to the lender to fulfill the obligation to repay the debt; this process does not allow the borrower to remain in the house but helps avoid the costs, time, and effort associated with foreclosure. So, if you want to stay in the house don't sign it.

By listing your home in the bankruptcy you opened a kettle of worms. If the bank filed that they didn't want their money going down to the tubes and are objecting to the bankruptcy a judge could decide whether you stay or go and in most cases that I hve seen - unlicke a behicle - you will probably go.

My best advice is to work something out with the bank but sign nothing till an attorney reviews it and tells you what your best options are. There are not pat answers, each case is different.
0 votes
Minna Reid, Agent, Trumbull, CT
Tue Jul 12, 2011
Of course talk to an attorney before signing anything regarding a discharged debt...however - the lender needs to to foreclose to get the property back. Despite popular belief the house still belongs to you after bankruptcy until the lender sues your for possession. They are likely trying for the deed in lieu because it is cheaper and easier for them then having to go through the foreclosure process.
Web Reference:  http://www.homesbyminna.com
0 votes
Ron Fowler, , Vancouver, WA
Mon Jul 11, 2011
I agree with Anna, make sure you consult with an attorney before signing anything.
0 votes
Anna M Brocco, Agent, Williston Park, NY
Wed Jul 6, 2011
In order to best protect yourself, consult with your attorney before signing any documents....
0 votes
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