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  1. #1

    Default Can You Force Bank to Foreclose

    Have 2 investment condo's in FL. Can't rent or sell them for any price, they're worthless. Couldn't hold on any longer either and bank served me with foreclosure summons & complaint over a yr ago, but the bank has not done anything since. They have not moved the process any further.

    I continue to maintain liability insurance and pay to keep the AC on and this is costing me. I want them out of my name, i don't care about losing them anymore. How can i make the bank move more quickly on the foreclosure process?

  2. #2
    Join Date
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    Default Re: Can You Force Bank to Foreclose

    You can't force them to proceed any faster than they are, but you can certainly call them and ask them where they are in the process.
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  3. #3
    Join Date
    Jun 2009
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    California
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    Default Re: Can You Force Bank to Foreclose

    I understand maintaining liability insurance, but why pay to keep the AC on - or any electricity at all? Seems you could call the utility company and have the electricity turned off.

  4. #4
    Join Date
    Mar 2008
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    1,995

    Default Re: Can You Force Bank to Foreclose

    No, you cannot MAKE the bank foreclose on it.

    If you read through your mortgage documents, I do not believe you'll find any language in there that FORCES the bank to do any of this. The bank MAY foreclose on it if you don't pay the mortgage, but does not HAVE to.

    Same as if you loan a friend some money, and his car is the collateral. If he doesn't pay the loan, he can't MAKE you take the car if you live in a condo complex and have no room to park it anywhere, and doesn't it pay for you go rent a parking space. If you decide not to take the car, for now, it's a sound business decision based on your economics because you already lost money with your friend not paying, so why lose even more money renting any parking spaces.

    So here, you MAY take the car, but you are not obligated to take the car. The bank may have decided as a business decision NOT for move forward right now, because they may already have too many similarly past due TOXIC condo loans out there, and don't want to be liable for anything more that may happen in the meantime.

  5. #5

    Default Re: Can You Force Bank to Foreclose

    Quote Quoting cwjr1835
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    Have 2 investment condo's in FL. Can't rent or sell them for any price, they're worthless. Couldn't hold on any longer either and bank served me with foreclosure summons & complaint over a yr ago, but the bank has not done anything since. They have not moved the process any further.

    I continue to maintain liability insurance and pay to keep the AC on and this is costing me. I want them out of my name, i don't care about losing them anymore. How can i make the bank move more quickly on the foreclosure process?
    Why not just call up the bank and offer them the deed in lieu? I mean, you don't want the properties and they haven't had time to foreclose on their collateral. Make it easy on them and give them the keys...

    And if they won't take them or do the deed in lieu, ask them to forgive the debt and release their liens. Unlikely they will agree to that, but if they are unwilling to take the keys from you, it's a logical request.

  6. #6
    Join Date
    Jul 2009
    Posts
    1

    Default Re: Can You Force Bank to Foreclose

    By utilizing a Forensic Loan Audit, you would have more leverage to get the lender cooperate to terms that would best suit.

    Good Luck

  7. #7

    Default Re: Can You Force Bank to Foreclose

    Quote Quoting cdybrkcan
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    By utilizing a Forensic Loan Audit, you would have more leverage to get the lender cooperate to terms that would best suit.

    Good Luck

    I don't think so, at least not in this case. A forensic audit, presumably resulting in RESPA or TILA violations, won't make someone foreclose faster. But they might be used succesfully by someone trying to modify loan and keep their property.

    The best way to quicken the foreclosure process is to just offer the deed in lieu to the lender. And they have no reason not to take that.

  8. #8
    Join Date
    Mar 2008
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    Default Re: Can You Force Bank to Foreclose

    Quote Quoting ballmich
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    The best way to quicken the foreclosure process is to just offer the deed in lieu to the lender. And they have no reason not to take that.
    They got plenty of reasons NOT to take it.

    If I was the bank, and if I got hundreds, if not thousands of properties in foreclosure, the last thing I want is holding deeds on hundreds, and thousands of properties throughout the country where I would have to pay RE taxes, HOA fees, insurance, and have lawns mowed.

    I was active in buying foreclosures from banks sometime back, a banker told me they wait till they have a collection of these houses, then put them all up for auction all at once, at which point they'll be deeded directly to the new buyers.

    The house I lived in I bought at a bank from auction, and I knew the previous owner filed bankruptcy over a year before the auction. But the way the deed is written, it was deeded to the bankruptcy trustee the day of the auction, then from the trustee to the bank, and the bank to me. In fact, the way the grantor, the bank, was written up was interesting. It names the bank, but said that it's title is based on another deed "to be filed by bankruptcy trustee named so and so". I checked with my attorney, and her with the title company, and I'm told it's kosher.

    I was thinking to myself, the way the deed was written, the bank didn't even hold title to this baby for one second. Now, why a bank would take a deed from a property that couldn't be rented or sold, and then pay maintenance, taxes, and insurance on it, for an indeterminant period is beyond me. I know Obama is throwing trillions at the banks, but let's not get ridiculous.

    BTW, I cannot tell if the units are currently vacant based on OP's original post. If it is, it is possible he may be paying insurance for nothing as insurance companies will not cover vacant properties, and if told, then the coverage is not valid.

  9. #9

    Default Re: Can You Force Bank to Foreclose

    Quote Quoting SChinFChin
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    They got plenty of reasons NOT to take it.

    If I was the bank, and if I got hundreds, if not thousands of properties in foreclosure, the last thing I want is holding deeds on hundreds, and thousands of properties throughout the country where I would have to pay RE taxes, HOA fees, insurance, and have lawns mowed.
    I think your mostly off base here.

    On the real estate taxes, the bank pays this one way or the other, as long as the current owner does not pay them. The tax liens are more senior than the mortgage note and will eventually be paid by the bank when they sell the foreclosed property. So it doesn't matter if they foreclose now or later, it will get paid current by the bank.

    In term of the HOA dues, the mortgage note is more senior and if the foreclosure sale doesn't net enough to cover the mortgage principal, the HOA fees will get nothing. The bank doesn't have to worry about these, they are junior.

    The insurance I am not certain about. But I know on my home that is in foreclosure, I am not paying the insurance. It is impounded in an escrow account with the R/E taxes, and a part of my month mortgage payment which I'm not making. So the insurance is not current. Will the lender pick up an insurance policy when they foreclose, I don't know, but doubt it unless it's covered by some blanket policy for the bank.

    The lawns mowed? Well, I don't see many foreclosed homes getting their landscaping taken care of. In fact, most of those that I see here in California have over grown lawns. So I don't think this is getting done and is an expense the banks are eating.

    Now are there some fees of holding onto property, probably some, but nothing that should materially affect a bank's decision to not take the deed if the borrower is offering it and it's already in foreclosure. The problem is most likely just a back log of paperwork that they already can't keep up with.

  10. #10
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    Mar 2008
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    Default Re: Can You Force Bank to Foreclose

    Quote Quoting ballmich
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    I think your mostly off base here.

    On the real estate taxes, the bank pays this one way or the other, as long as the current owner does not pay them. The tax liens are more senior than the mortgage note and will eventually be paid by the bank when they sell the foreclosed property. So it doesn't matter if they foreclose now or later, it will get paid current by the bank.



    This is the big reason why properties often are NOT sold "free and clear", by banks, and it's up to the buyer to handle the RE taxes. While I bought my home at an auction "free and clear", my neighbor next store bought his from another bank, NOT sold "free and clear", WITH all the leins, $35,000 worth, and he had to pay them after moving in.

    When I spoke to my neighbor, he lamented that he was not knowledgeable enough on foreclosure investing when he bought the house, actually thought the bank held the deed, because it was called an "REO", assumed like many others that the bank had to stay current on the real estate taxes. They don't. The bank managed to avoid the RE taxes entirely by NOT holding the deed.

    When I bought my property free and clear, my bank had to pay the back property taxes, and other state tax leins of the bankrupt owner, they only paid these at the time of the closing, working out much better from the standpoint of cash management. They managed to do this because they never held title the entire time the previous owner was bankrupt, till title was transferred to me. The bank only paid the taxes, finally, not because their name is on the deed, but it is a condition of the sale to me.

    As to HOA fees, HOA's sends the owner on the deed the bills, sometimes based on public records information, and the last thing banks want is have their name on the public records, to deal with HOA's, their management companies, collection agencies, if they are just smart enough NOT to have the deed.

    As to the HOA getting nothing, don't be so sure. The debt is NOT extinguished even if the condo is foreclosed, lien extiguished, and the condo owner can still be chased for the debt, and have his bank accounts seized, wages garnisheed. If the bank is dumb enough to put it's name on the deed, the HOA can go after the bank too.

    In fact, I saw a post on this board just the other week, where someone complained that he thought his condo was foreclosed, told the HOA not to send him any more bills, but the HOA told him that his name is still on the public records, and that's who they'll send the bills to.

    As to insurance, if someone tripped and fell, snow is not removed, guess who they'll sue?? The one holding the deed, of course. If it was a bankrupt owner, who of course won't be paying the insurance, it's one thing, if it's a big fat bank, guess what lawyers are going to do next??

    And then there is another big "time bomb". I owned a business with an underground 'used oil' storage tank, and one of my rentals have an underground oil storage tank, called UST's. Over time, they leak, become enviromental hazards, and clearup can be costly.

    Federal environmental laws are written where everyone in the "chain of title" is held responsible. For instance, the real estate market crashed in my area in 1990-1993, and if a bank is unfortunate enough, or dumb enough, to take a deed on a property, and tomorrow, the house becomes a toxic waste cleanup site, the current owner, and prior ones, and because the bank that held the deed is one of the prior owners, will be held responsible for the cleanup.

    From what I've seen of what banks done in the last RE crash here, I don't think I'm off base at all.

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