You are unable to make your mortgage payments. You received a foreclosure notice from the bank so you surrendered your keys, moved out, and canceled your homeowner’s insurance. You think you are off the hook. So, how can you be sued for problems on your vacant property?
The problem is that while the bank gave notice of pending foreclosure, the homeowner is still liable for any problems on their property until the title transfers to the bank. Complaints others make to the City, County or Homeowners’ Association against your property, i.e. not being maintained; nuisances like kids throwing parties; or homeowner fees still due, are examples of the homeowner’s continued personal responsibility.
If you are still on title, you are still personally liable for all criminal liability for failure to maintain the property; civil liability for any person injured on your property; still owe homeowner fees; and more.
The solution is simple. Until you are off title, you are still liable. As long as you are on title, you need to keep paying your homeowner’s insurance premiums.
The best way to solve the problem if the bank does not complete the foreclosure on your home is to record a DEED IN LIEU OF FORECLOSURE. However, in some states, the bank must approve the Deed In Lieu. California is not one of those states, but there are issues to be considered which are too are lengthy for this blog for which you should obtain legal counsel.
A Deed In Lieu of Foreclosure is a deed from the owner to the first or second deed of trust or mortgage holder. It should be a Quitclaim Deed which bears the title, “DEED IN LIEU OF FORCLOSURE,” next the title Quitclaim Deed.
To obtain more information about Deeds in Lieu, read the book: MORTGAGES, DEEDS OF TRUST AND FORECLOSURE LITIGATION, CONTINUING EDUCATION OF THE BAR, CALIFORNIA OAKLAND, CALIFORNIA, January 2010, Chapter Title, Debtor’s Strategies, section 7.11, page 523; 7.127.21, page 524 and 7.21A, page 530.
To find more information on the web try doing a search using the phrase, “Deed In Lieu.”