What does it mean to have a charged off mortgage in a foreclosure proceeding and why? 5 Answers as of August 11, 2015

We thought our house was foreclosed on back in April, 2013 but we were informed by the mortgage company that they stopped foreclosure proceedings and charged off the mortgage. What does that mean and what are options, we no longer live at the house because we thought we lost it to foreclosure? Frankly, we don't want the house.

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Richard B. Jacobson & Associates, LLC | Richard B. Jacobson
Since you don't want the house, you may not need to do anything. Their 'charging off' the mortgage debt may mean that they waived any deficiency on the resale of the house. While that is often a good deal, you could wind up paying tax on a portion of the forgiven debt. Many tax preparers do not understand the limits of the applicable law. Ask your preparer to review sec. 108 of the Internal Revenue Code.
Answer Applies to: Wisconsin
Replied: 8/11/2015
Mauritz Van Niekerk, Attorneys at Law
Mauritz Van Niekerk, Attorneys at Law | Christiaan van Niekerk
What is the address of those?
Answer Applies to: New York
Replied: 8/11/2015
S. Joseph Schramm | Joseph Schramm
If you do not want to live in the house then you have nothing to worry about. When you say that the mortgage company told you that the mortgage company stopped the foreclosure proceedings and charged off the mortgage it might be that the bank simply took the loss and is not interested in taking back the house. Why they charged off the mortgage would be unclear, but foreclosure actions are "in rem" proceedings and usually limited to taking back the property to resell, often for more than the remaining balance on the original mortgage. This means that banks typically do not come after the mortgagors (yourself, in this case) after the foreclosure and sheriff's sale of the property (usually back to the bank, which, in turn will resell the house). Therefore, if you've simply walked away from the property you won't have to worry about the bank pursuing you. It might further mean that, whether you want to continue to live in it yourselves, you might own the home free and clear of any lien of mortgage on the title. If so, you might also wish to hold onto the property to rent it, sell it or use it for some other purpose.
Answer Applies to: Pennsylvania
Replied: 8/11/2015
Stacy Joel Safion, Esq.
Stacy Joel Safion, Esq. | Stacy Joel Safion
You should check with a title company but you may still technically own the house. If so, you can sell it or give it back to the bank through a deed in lieu of foreclosure.
Answer Applies to: California
Replied: 8/11/2015
The Law Office of Darren Aronow, PC
The Law Office of Darren Aronow, PC | Darren Aronow
They just sold the debt to another company. You should try to do a short sale to get the house out of your name as it will prevent you from moving forward in other areas.
Answer Applies to: New York
Replied: 8/10/2015
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