Rancho Cucamonga, CA Real Estate Broker: Foreclosure Cancelled? But I've Already Moved!

Foreclosure Cancelled? But I've Already Moved!


I’m witness to some odd occurrences with several of my clients, especially those associated with Bank of America.  Some clients were in foreclosure, but their trustee sales were cancelled and never rescheduled.  Or, the client makes partial payments for a year, gets turned down for a loan modification, and then B of A starts foreclosure proceeds.  Or, the client attempts a loan modification over and over with no approval but once they list their home as a short sale they receive paperwork for a trial loan modification.  Or, the client has been discharged from bankruptcy with no attempt by the lender to begin foreclosure. 

This is happening all around us and I have a handful of clients experiencing one of these situations.  One particular client recently discharged nearly $400,000 in mortgage debt with two lenders.  The first is with Wells Fargo and the second is a HELOC with Chase, formerly WAMU.   Neither lender has pursued foreclosure of the home as title remains in my client’s name as legal owner of record. 

Two other clients have mortgages with Bank of America.  Both clients attempted a loan modification and both failed.  When we listed their homes as short sales earlier this year both sellers were desperately close to their scheduled foreclosure dates.  We immediately began our rescue mission to postpone the sale dates in order to complete the short sale purchase transactions.  One sale date was not postponed and went to sale the week prior.  The other sale date was successfully postponed for 30 days.  But don’t go away.

The property that went to sale was not sold to a third party or reverted back to the beneficiary.  The trustee indicated that the sale was “cancelled”.  Bank of America’s records showed that the property was foreclosed on.  But when I questioned the bank about what the trustee had told me they did not have an answer.  I asked the bank how I could upload a short sale offer on the property.  I couldn’t because it was in foreclosure.  After several weeks the file was released from foreclosure by the lender.   Now, many months later, no sale date is scheduled and it remains “cancelled”. 

A similar situation occurred with the other property.  We were receiving systematic postponement dates every 30 days until the third month.  On the third month we called for a postponement and were told that the sale was “cancelled”.   Again, many months later, no sale date is scheduled and it remains “cancelled”. 

With two out of the three properties currently vacant, the question is, now what?  Is it possible for a homeowner to simply “walk away” with no threat of future liability?

I spoke with a real estate attorney who says that until the bank forecloses or the property transfers title through a short sale or deed in lieu, the seller remains responsible for the property taxes, insurance, security and condition of the property.  

A bankruptcy attorney told me that my client who was recently discharged from the debt through bankruptcy technically didn’t own the property anymore and should drop the insurance and not concern himself with the status of the property anymore.  However, I didn’t feel comfortable with this information.   I consulted yet another bankruptcy attorney who stated that until the bank forecloses, my clients are still named as legal owner of record and therefore remain responsible for the taxes, insurance, security and condition of the property.   

So it seems I’m in some sort of legal limbo here.  As it has become clear to me that banks are “walking away” from their right to foreclosure, does that place the financial responsibilities squarely on the shoulders of the homeowner when the homeowner has walked away believing that the foreclosure sale has already occurred?

I receive letters and emails nearly every day from individuals who have moved out of their homes because it was in foreclosure only to learn months later that the lender never foreclosed.  It looks like no one is addressing this “bank walk away” issue and now I’m receiving questions about the relevance of “vacancy insurance”.  

If you have been approached with the need for “vacancy insurance” by your lender or are being sued for negligence associated with your vacant home, please share your story with me.  I’m very interested in this latest aspect of today’s housing crisis and how to best resolve it, if possible. 




Diane Wheatley, Broker

Real Estate Brokerage, Upland CA


(909) 815-4499 Direct Cell

CA DRE Broker Lic #01193694



Comment balloon 7 commentsDiane Wheatley • September 05 2011 11:49PM


Diane, you confirm what I've been telling my clients and fellow agents for a while now.....we truly are in the "twilight zone" of real estate. Beyond bizarre!

Posted by Colleen Fischesser Northwest Property Shop, A Tradition of Trust in the Pacific NW since 1990! (RE/MAX Advantage | Managing Broker) about 9 years ago

I agree with Diane, "twilight zone".  As a mortgage professional working with buyers who want to write contracts on short sales/foreclosures.  They are forced to a waiting game.  Even though they are ready to go foreword they come to screeching halt and in some cases have to start over because the short sale/foreclosure did not go through.  The one I am still scratching my head is - seller has bewn transferred (by job) but because they were current, the short sale was denied.  Well they no longer live in the area and not able to rent for what they pay for mortgage.  What are the banks thinking!

Posted by Lisa Perry - NMLS # 276329, Northern VA - VHDA, 100% Loans - Jumbo Loans (FHA, VA, Jumbo, Downpayment Assistance, Conv.) about 9 years ago

Diane, homeowners should never move until they confirm that a transfer of title has been completed. 

Posted by Pamela Seley, Residential Real Estate Agent serving SW RivCo CA (West Coast Realty Division) about 9 years ago

Who would have ever thought that homeowners in the United States of America would be in such dire straits? 

Homeowners are damned if they do, and damned if they don't.

God help us...

Posted by Fred Griffin Tallahassee Real Estate, Licensed Florida Real Estate Broker (Fred Griffin Real Estate) about 9 years ago

This is what drives everyone crazy.   Nothing is consistent and the left hand never talks to the right hand at B of A.

Posted by Doug Bullwinkel, Mortgage Loan Originator NMLS #281609 (Envoy Mortgage,NMLS ID 6666) about 9 years ago

Just when we think it couldn't get any crazier, it does. B of A leads the way. 

Posted by Marge Piwowarski, Phoenix AZ Horse Property, LLC (Phoenix AZ Horse Property) about 9 years ago

That really is a slippery slope of liability gray area.  I am seeing the exact same scenarios play out here.  It's ridiculous.

Posted by Janna Scharf, Coeur d'Alene Idaho Real Estate Expert (Keller Williams Realty Coeur d'Alene) about 9 years ago