Sold Out Junior Loans

SLOCoCA

LoanSafe Member
Apr 4, 2012
49
0
6
California
I'm back on this forum, I've been sifting through hundreds of messages, trying to come to a decision. Here's our current situation:

We let our house foreclose; Wells Fargo sold it on Oct. 2013 for $250K (we'd bought it in 2007 for $540, 1st mortgage was $440K, purchase money HELOC, also with WF was $40K). We got a letter from WF about the HELOC/SOJL in Sept 2014 asking for 50% of $44K, we ignored it.

The mortgages were entirely in my spouse's name, they don't show up on my credit report. We were planning to continue staying silent except I got an inheritance check, which I haven't deposited. We've seen 2 lawyers, one says to declare bankruptcy to wipe the slate clean. We have no other debt to speak of, but if we do, the inheritance and our cars are at risk. The other says to settle, as the tax consequences are less than the loss of the inheritance/cars. Our total income is 65K, so a low tax bracket.

But I see that, as of last summer, the advice on this forum was to never settle with a SOJL, especially since in WA State it should be non-recourse. Right now, our file is probably at the bottom of Well's Fargo's pile. If we try to settle, it may wake them up into taking more action.

Do I deposit the check into my business account (non-comingled) and trust that WF is so out to lunch they won't notice?
Do we call them up and offer $4,000 or some equally low ball offer?
I can't sit on this check for long, the estate is being settled soon.
Any feedback, suggestions, similar stories, are appreciated!
I am NOT an attorney, and have no idea what kind of attorney you would need to speak with, to get an answer to your question. I am wondering, though, have you considered putting your inheritance into a trust? I've heard that is a good way to protect yourself from "creditors and predators".

It is my understanding that inheritances are considered separate property (or money), and unless co-mingled in a joint account with your spouse (or adding a spouse's name to it), it remains separate property. Maybe a trust would be a way to protect your inheritance from those creditors. An attorney could help you figure out what kind of trust to put it into.

Might be worth looking into. Good luck!
 

DHodge

LoanSafe Member
Aug 17, 2011
9
0
1
Well it appears my sold out junior is suing. I received some legal solicitation in the mail. My question is, I live in Florida, the lawsuit was filed as a promissory note or disclosure statement. When is the SOL up for that? I'm reading two different answers, I've read 5 years from "default" date and then I hear 4 years from foreclosure? Any help would be appreciated.
 

jaygatsby

LoanSafe Member
Oct 26, 2011
11
0
1
Hi,
I had a 2nd loan with Associated Bank for $63,000. After a short sale due to a divorce, I was not able to sell the house for the amount owed. The primary loan was met but Associated Bank did not want to negotiate the secondary loan down to an acceptable amount. This was in 2012 in WI. I live in TX now and have just received a letter from a Law Firm attempting to collect on the outstanding debt. I have asked for proof but all they have sent back is a statement of outstanding charges from Associated Bank. There is nothing in the documentation stating that they own the debt. Anyway I have some options available right now:

i) Send a cease and desist letter - this may force their hand to sue so I am hesitant to do this.
ii) Send a letter requesting more information and that all further communication be done in writing.
iii) Simply ignore any calls and communication
iv) Contact a consumer law attorney.

I am reluctant to negotiate since I was forced into the short sale of my house by my wife. This is not a matter of financial irresponsibility, rather circumstances beyond my control. Any help is appreciated.

Kind Regards
 

Arma8472

LoanSafe Member
May 8, 2011
17
0
1
jaygatsby

Personally I would ignore them. They sent what sounds like the generic collection letter. You responded and then them back. It's still on them to do something, like offer settlement. You already did your part. I'd avoid the cease and desist or any other letters to them and wait on the attorney. Nothing has actually happened yet. Maybe do some internet reading on the law firm that contacted you if you'd like to see what others have dealt with. Good luck. :)
 

MsMarie

LoanSafe Member
Sep 21, 2010
15
0
1
Florida
Good evening everyone,
I have been following this forum for some time (off and on). I had a short sale back in Dec. of 2010. The date of my first delinquency around August. 2010. My first mortgage forgave the deficiency but the second did not. In order to release the lean they had me sign a promissory note, hereby becoming a SOJL. For a while they called, sent invoices, and letters, but I never answered as per the advise on this forum. My CRS took a major hit, as expected. It took another hit around 4/2013 when the SOJL still owned by Greentree reported it as charged off. Since then my scores have recovered to very close to pre-ss levels until recently, when it took another hit. I live in FL, a recourse state. However, to date, there are no court documents and the SOL is around the corner. The original 2nd mortgage company sold it to BOA which then either sold it or gave it to Greentree for servicing. I am not sure how I should proceed. I was hoping to put this behind me by 2017, but now I fear this will linger on my CR far longer. Any advise will be appreciated with the following questions?

1. Is the SOL from the date of default or the closing of the SS?
2. Can the same creditor report the same account as charged off twice? has anyone successfully fought this? How?
3. I am aware that the SOJL can be sold to CA. Should I try to negotiate with GT or the CA? If I ignore them, can they continue to hit my score?
4. Can the CA sue me even though they are not the original creditor, and does the SOL reset once they acquire the debt?

I apologize if these questions have been asked before.
 

Arma8472

LoanSafe Member
May 8, 2011
17
0
1
MsMarie

1. For foreclosure anyway it is from ending of redemption period. I would base it on whatever happened latest to be safe for SOL.
2. I would do a free credit report from annual credit report from the 3 companies. I did one recently and it showed on them when that specific credit history (my foreclosed loans and also charged off SOJL) would come off the credit report.
3. I would continue to ignore them. I just recently got a letter from CA and responded with my standard Debt Verification letter disputing it. I will respond to nothing else after that. I'm not planning to settle though. If you are willing to settle then you may be able to negotiate if they send you an offer first, but I would wait for it. As far as your score I'd just expect it to be terrible until the credit history comes off and I don't think there is much you can do about it. You could see about disputing it when getting your free credit reports but I'd guess it's futile.
4. They can sue you on behalf of the current holder or if they hold the debt now themselves. The SOL would not reset by them just acquiring it. Making a payment on it for example may reset it
 

MsMarie

LoanSafe Member
Sep 21, 2010
15
0
1
Florida
MsMarie

1. For foreclosure anyway it is from ending of redemption period. I would base it on whatever happened latest to be safe for SOL.
2. I would do a free credit report from annual credit report from the 3 companies. I did one recently and it showed on them when that specific credit history (my foreclosed loans and also charged off SOJL) would come off the credit report.
3. I would continue to ignore them. I just recently got a letter from CA and responded with my standard Debt Verification letter disputing it. I will respond to nothing else after that. I'm not planning to settle though. If you are willing to settle then you may be able to negotiate if they send you an offer first, but I would wait for it. As far as your score I'd just expect it to be terrible until the credit history comes off and I don't think there is much you can do about it. You could see about disputing it when getting your free credit reports but I'd guess it's futile.
4. They can sue you on behalf of the current holder or if they hold the debt now themselves. The SOL would not reset by them just acquiring it. Making a payment on it for example may reset it
Thank you so much for replying. Since my post, I did some research and have to agree with advice. GT can keep taking hits to my score until it either (1) drops off my credit report in 7.5 years or (2) they sell the debt to a CA. At which point they have to report a zero balance and cannot continue to report thereafter. However, that would only mean that I now have a collection account on my report which would probably lower my score some more. The good news here is that once the GT account drops so does the collection account, and once the SOL expires they cannot legally sue or threaten any longer.
 

calibear

LoanSafe Member
Feb 7, 2014
3
1
3
Very curious as to how this is going... it has been stated many times that lawsuits are seldom seen so wondering if this is an aggressive threat to scare you into making some kind of payment? RCS has my account, as well, but just got a couple letters from them last year then nothing lately...

Wishing you the best in this troubling situation.
 

Anouk

LoanSafe Member
Jan 4, 2012
40
1
6
Sacramento, CA
After 1st mortgage foreclosed in 10/2012, Green Tree waited 2.5 years and then sued, served me on Mother's Day. We filed bankruptcy on 5/11. At the time we walked away, the chances of being sued were slim, now it seems they've decided fortunes may have improved in the interim. Not so for us at least.
 

returntosender

LoanSafe Member
Mar 6, 2013
12
0
1
nj
My state has 6 year limits on statute of limitations on debt. When to the statute of limitations expire? Date of last payment? My last payment was over 6 years ago, my credit report has it listed as 06/2009. But I did do a short sale in January of 2010, in which they got some money to release the lien. And since they have attempted to collect the balance, though the last I've heard from them was a over a year ago.
 

returntosender

LoanSafe Member
Mar 6, 2013
12
0
1
nj
returntosender - Here is California the SOL starts from the date of last activity once their security is lost. So if your state is the same it would be from the date of the short sale.
I'm in NJ, so I'm not sure what dates apply. So even though my credit report shows June of 2009 as the last activity. It really isn't until the short sale was completed? They charged it off and closed it in January 2010. It does not show up as being in collections, but they have been attempting to collect from time to time. With the SOL being possibly expired or expiring in a few months, how likely would they take any action? They are overnighting me something from their Home Retention offices in CO, possibly an offer or something. I just want to move on already lol.
 

returntosender

LoanSafe Member
Mar 6, 2013
12
0
1
nj
Well I just got notice they have forgiven the debt because of a settlement with the Department of Justice. And they will report it as paid. Which I guess is good news, though I may have to pay tax on the forgiven amount. But they may cover part or all of the taxes. So I guess this is good, but I still did not want to pay anything out of my pocket. But probably nothing I can do to avoid paying something to the IRS.
 

mando

LoanSafe Member
Nov 27, 2011
10
0
1
Hi! I have somewhat read through this thread, but it is so long and detailed, that I thought I would ask my own question.

My husband and I had a first mortgage with Chase and a second mortgage with Greentree. Due to long-term unemployment, we stopped paying both in 3/2012. Foreclosure occurred in 2013 and home was sold by bank. Looking at my credit report, 1st mortgage says - Foreclosure initiated and Forclosure Collateral Sold. Credit report for 2nd mortgage says - Charge Off. We have not received much correspondence from Greentree. Also, my credit says that nothing is in collections. Not sure what our next steps should be? Lay low or do something?
 

kidsandliz

LoanSafe Member
Mar 28, 2011
56
0
6
Hi! I have somewhat read through this thread, but it is so long and detailed, that I thought I would ask my own question.

My husband and I had a first mortgage with Chase and a second mortgage with Greentree. Due to long-term unemployment, we stopped paying both in 3/2012. Foreclosure occurred in 2013 and home was sold by bank. Looking at my credit report, 1st mortgage says - Foreclosure initiated and Forclosure Collateral Sold. Credit report for 2nd mortgage says - Charge Off. We have not received much correspondence from Greentree. Also, my credit says that nothing is in collections. Not sure what our next steps should be? Lay low or do something?
My first mortgage was with Chase, who, as you learned, is a pain in the rear to deal with and then some. I could never find whom to talk with, was shifted around all over the place. They get really nasty and hateful and rude as you go up the authority chain. Likely in January 2016 you will get a 1099 with the amount they are charging off. This is taxable income by the way unless you fill out the insolvency tax paperwork and qualify not to pay taxes on it under those rules.

That is what happened to me and none of my credit reports agreed with what is going on - actually nearly 5 years later they still don't all agree. One says I have a balloon payment due in 2022 (I had an 80/15 mortgage and it is the 15 that is claiming that although Jan 23rd 2016 the statue of limitations to come after me will finally be passed!!).

The other thing I discovered about a year or so after my short sale (while foreclosure was in process - that was the fault of Chase - we had the same buyer for 7 mo prior to me being in default and it took them that long to finally approve the short sale) that they sold the loan remains to whatever that gov agency is called - Freddie or Sallie something or other. They did this after the short sale. Didn't bother to inform me. It may well be that they ditched yours too. This would also explain why they couldn't find a record of my loan or perhaps also customer service is really incompetent/inept - a distinct possibility since I got different answers each time I called - that they had sold my loan was never disclosed to me any time I called. I found out via a credit report when Chase was no longer listed as the lender.

If I were you I'd wait until January and see if you get a 1099 in the mail. Chase did send me one (my second did not but from the credit reports it appears they have written it off. I am ignoring it until I get a 1099). Other threads advise to let sleeping dogs sleep and not remind them of your existence. I only sort of followed that as I read that AFTER I had already tried to find out what was going on. Were I to do it again I'd wait to see what shows up in Jan with respect to a 1099. If you are in a no-recourse state you are safe anyway from them coming after you. If you are in a recourse state (like I was) don't remind them you exist and maybe they will get bogged down with current accounts and leave you alone, not send bills, etc.