Can a bank sell a loan that was discharged from bankruptcy 11 months after the discharge? 11 Answers as of April 06, 2015

Bank of America did not contact us about signing over the deed after discharge and did not show for court. This was in Georgia. 11 months after discharge they sold the loan to Rushmore mortgage. The property had been appraised for taxes two years earlier at approximately 100,000 less than what the loan was worth. There was no equity at this point. And this sale to the other mortgage company appears awful illegal. What is your thoughts on this?

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A Fresh Start
A Fresh Start | Dorothy G Bunce
Banks buy & sell loans all the time and it is of no interest to the bankruptcy court whether they do so. If the loan is also a mortgage, the lien of the mortgage gives the owner of this mortgage the right to foreclose on your property. I would stop worrying about whether what your mortgage company does and work on trying to resolve your own financial problems. You are wasting efforts.
Answer Applies to: Nevada
Replied: 4/6/2015
Deborah F Bowinski, Attorney & Counselor at Law | Debby Bowinski
While your personal liability for the mortgage loan was discharged, the lender's lien still remains intact against the property. Mortgage companies buy and sell notes and deeds of trust all the time. The new lender will retain the right to foreclose on the property if they choose to do so, but they do not have the right to seek payment from you on the loan. Debby Bowinski
Answer Applies to: Colorado
Replied: 4/6/2015
The Law Office of Darren Aronow, PC
The Law Office of Darren Aronow, PC | Darren Aronow
They are allowed to sell or assign their mortgages whenever they want. Doesn't sound like anything illegal has transpired.
Answer Applies to: New York
Replied: 4/3/2015
The Law Offices of Ryan F. Beach, PLLC
The Law Offices of Ryan F. Beach, PLLC | Ryan Beach
The selling of the mortgage does not have anything do with your bankruptcy. The mortgage is still discharged and you are no longer personally liable for the debt. However, if you want to retain the property you will need to keep paying whoever is servicing the loan or you will lose the property to foreclosure.
Answer Applies to: Michigan
Replied: 4/3/2015
Richard B. Jacobson & Associates, LLC | Richard B. Jacobson
Regardless of the sale, no one is permitted to try to collect money from you, unless you reaffirmed the debt. Have your lawyer notify the new holder of the debt that it has been discharged. If you do not have lawyer, notify them your self, as soon as possible. Doing it in writing, and keeping a copy, is best.
Answer Applies to: Wisconsin
Replied: 4/2/2015
    Ronald K. Nims LLC | Ronald K. Nims
    A mortgage contains two obligations - 1st, is the personal obligation of the homeowner(s) to make the loan payments. 2nd, is a lien against the house itself for the balance of the loan. When you filed bankruptcy, the first part - your personal obligation to make the payments - was discharged. But that doesn't affect the second part - BofA still had a lien against the house. BofA has the right to sell that lien, foreclose on that lien or any other transaction that suits their fancy. Banks don't like to have nonpaying mortgages on houses that are worth far less than the mortgage because cities like to sue them as the houses get rundown. If you're living in the house, fine. The new holder of the lien might foreclose and take the house or they might do nothing. If you've already moved out and the place is vacant, you need to work with the new holder to get the house out of your name. You could be hit with fines for maintaining the house and the yard or judgments for vacant house hazards - like kids play in it and get injured or it burns down and the fire spreads to other houses.
    Answer Applies to: Ohio
    Replied: 4/2/2015
    R. Steven Chambers PLLC | R. Steven Chambers PLLC
    Banks buy and sell loans all the time. Yours was probably in a pool of hundreds or even thousands of loans that were sold. The mortgage on your house still remains even if your liability to pay the debt has been discharged. The buyer might contact you, not knowing you filed bankruptcy. It can foreclose but it can't sue you personally.
    Answer Applies to: Utah
    Replied: 4/2/2015
    Marc S. Stern
    Marc S. Stern | Marc S. Stern
    Liens, and this includes mortgages, pass through bankruptcy and they are not affected unless there is a specific order of the court that does something about the lien. The bank had every right to sell its position.
    Answer Applies to: Washington
    Replied: 4/2/2015
    The discharge ends your responsibility for the debt no matter what company holds the mortgage. If you surrendered the property in the bankruptcy then you need do nothing as the buyer of the mortgage has only the right to the lien on the property. If you are still living in the house you will need to send monthly payment to the new holder of the mortgage if you continue to live there.
    Answer Applies to: Minnesota
    Replied: 4/2/2015
    Tokarska Law Center
    Tokarska Law Center | Kathryn U. Tokarska
    Your question was posted in CALIFORNIA so not sure how Georgia handles things but generally speaking A discharge means that your personal liability on the debt obligation has been discharged, the creditor cannot sue you to collect on this debt or any deficiency stemming from a foreclosure sale. What discharge does NOT mean is that the creditor has lost their rights to collect the property, which secures the loan as collateral. In a mortgage there is a promissory note, your personal obligation to repay the debt. This has been discharged. There is also the collateral agreement wherein certain subject property secures the debt. In the event of non-payment of that debt, the holder of the note has the legal right take the subject property. This right is not effected by a bankruptcy discharge. This right also has value and typically something of value can be traded, sold to another party. There is an exception to the lien not being affected by the discharge if there was a lien strip in your bankruptcy case. I suspect if there could have been one and/or there was one, your attorney would have discussed it with you. If you're completely confused, contact your previous attorney so they can explain things. If you filed without an attorney, I can't see how there would have been a lien strip because it's not an easy process and any reasonable person would recall not only having to prepare and file separate motions, serving them on creditors very specifically, and/or attending hearings on the matter.
    Answer Applies to: California
    Replied: 4/2/2015
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    You still own it and they can sell the mortgage all day long. If you want to give it up you can. OR you can stay and pay. You get to choose.
    Answer Applies to: California
    Replied: 4/2/2015
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