Foreclosure dismissal idea.

Discussion in 'Bankruptcy' started by APB, Sep 17, 2003.

  1. APB

    APB Guest

    I am wondering if this legal argument would work in the scenario described
    below. The scenario is hypothetical, but I wrote it in the first person as
    if it is happening to me now (which it isn't) just to keep things simple.

    I filed a Chapter 7 bankruptcy and received my final discharge. In the
    bankruptcy, I surrendered my home because it is worth less than the balance
    due on the first and second mortgages. The bankruptcy trustee abandoned the
    property because it has no equity. So, now my bankruptcy is over and I
    still own the property. I already moved out of the property and I don't
    want to keep it. The property is now in foreclosure and all I want to do is
    get my name off the foreclosure lawsuit as a defendant so it won't show up
    on my credit report. I called the mortgage company and I asked if I could
    do a deed in lieu of foreclosure but the person I spoke to said they don't
    do that.

    So, here's my idea. I go to a stationery store, buy a deed and fill it out
    deeding the property to the Plaintiff mortgage company, and then file and
    record the deed. Then I file a Motion to Dismiss the foreclosure lawsuit
    for failure to state a claim for which relief could be granted. In the
    argument supporting the motion, I would provide documentation showing that I
    received a bankruptcy discharge and am no longer personally responsible for
    the mortgage debt or any deficiency that might result after the foreclosure.
    I would also provide an affidavit stating that I no longer occupy the
    premises and that I have already surrendered any ownership interest in the
    property that I might have to the Plaintiff by recorded deed. Therefore,
    there is no longer any cause of action against me and I should be dismissed
    as a defendant in the action. And maybe I would add that continuing the
    legal action against me under these circumstances would be a misuse of
    judicial process.

    Any chance of this idea working in a court of law?
    APB, Sep 17, 2003
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  2. APB

    Brett Weiss Guest


    There is no valid transfer of property by a deed without
    acceptance. Often, mortgage companies want to do foreclosures in
    situations like this to be able to provide a clean title to


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    The Small Print: This response is for discussion purposes only.
    It isn't meant to be legal advice and you shouldn't treat it as
    such. If you want legal advice, speak with a local lawyer
    familiar with your state's laws who can review *all* of the facts
    and the law applicable to your situation.
    Brett Weiss, Sep 18, 2003
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  3. APB

    Canzie Guest

    Brett said

    ......Often, mortgage companies want to do foreclosures in
    That is exactly right.
    Canzie, Sep 18, 2003
  4. APB

    APB Guest

    My thinking was not to try to dismiss the entire foreclosure complaint, but
    rather to remove my name as a defendant in the ongoing action. The basis
    for seeking a dismissal of the action against me is that there is no longer
    any relief that I can provide to the plaintiff since I already gave them
    possession and title to the property and I am not responsible for any
    deficiency. Hence, my request for a dismissal -- with regard to me only --
    as a defendant.

    I do know that technically the property is not conveyed by deed without
    acceptance. But it seems to me that it would be difficult for the
    plaintiffs to argue in court that they refuse to accept my deed of all of my
    interest in the property to them. They could still continue the foreclosure
    action against all of the other named defendants to obtain clear title. I
    am just wondering if this isn't a novel (though somewhat convoluted)
    approach that could be tried by individuals in this type of situation.

    While the situation I described is hypothetical, I did have a situation in
    the past that was similar in some respects. I didn't think to try this idea
    then, but I did do some parts of it. Altogether, I actually had three
    different foreclosure actions against me for three different properties.
    The only foreclosure that ever appeared on my credit report was the one
    where I had not unilaterally deeded the property to the plaintiffs.

    Here's what happened. Knowing that I was heading toward a possible
    bankruptcy, I called the mortgage companies for two condos that I owned and
    that were rented out. One had an FHA insured mortgage and the other had a
    VA guaranteed mortgage. Despite the rental income, both were losing money
    every month. Both mortgages were current when I first called them. I
    offered to deed the properties back to the mortgage company in lieu of
    foreclosure. Both refused. I also called FHA and VA and they both said
    they don't do that. So, I drew up deeds, deeded the properties back to the
    Secretary of Housing and Urban Development, recorded the deeds, and sent
    copies to all of the parties (including the tenants). I advised the tenants
    that all rents etc. should be directed to the new owners. Later, I filed a
    Chapter 7 bankruptcy and received a discharge. When I received foreclosure
    notices, I just wrote back stating that I no longer owned the properties and
    sent them copies of the deeds and my prior correspondence notifying them of
    the transfer of title. Both properties eventually went to sheriff's sale as
    part of the foreclosure. The ironic part was that neither of these
    foreclosures ended up on my credit reports. I didn't do any of this for the
    house where I was living, and that foreclosure did show up on my credit

    Again, this is just an idea. My thinking is simply that if someone already
    did all that is being asked of them in a foreclosure complaint, perhaps they
    could get themselves removed as a defendant in the action since there is no
    longer a cause of action against that person. The foreclosure itself would,
    of course, continue against all of the other defendants to clear all of the
    liens etc.
    APB, Sep 18, 2003
  5. APB


    Jan 17, 2011
    Likes Received:
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    TerryJo, Jan 17, 2011
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