Already Foreclosed, HELOC Advice Needed

[shojmcm]

The condo I owned foreclosed in May. I had an 80/20 loan first at 277 and second HELOC at 70. Both were purchase money, taken out at the time I purchased. I am probably int he same boat as a lot of people and find myself still receiving a bill for the second from B of A.

My question is how do I get them to stop sending me a bill. Is there a letter someone has written or some advice on what to put in a letter. Since my credit sucks and I just want to start out clean, I really need them to stop sending me a bill for a condo I don't own. Any hep or pointing me in the irght direction would be awesome.

This was in CA.

Thank you,

Josh

[snapple candy]

YOu might want to go thru some of the threads on this issue and find out more.

I think Professor Shay has some good info on the 80/20 loans.

Have you considered BK as an option?

[snapple candy]

Just pulled this off another thread:

I remember that letter that was written by Professor Shays. I knew I might need it someday so I copied and pasted it to my documents. Here it is. Good Luck!


Sharona



Dear Collection Agency:

I am in receipt of the attached letter, which frankly confuses me. The debt you reference was a secured loan on my former ffice:smarttags" />lace w:st="on">Californialace> residence. I say "former" because I no longer own it because the first lender foreclosed on the home. While I suspect you already know the applicable law here in lace w:st="on">Californialace> relating to limitations associated with the second secured lender's sole remedy, I suggest that you should be mindful of the language in California Code of Civil Procedure Section 580b, which prohibits deficiency judgments with limited exceptions where “purchase money” securities are involved. For this purpose, “purchase money” means a third-party lender advancing funds to a buyer to be used to pay all or part of the purchase price of a dwelling of not more than four units to be occupied in part or entirely by the buyer.

Given that the proceeds of the loan in question were used to pay part of the purchase price of my former lace w:st="on">Californialace> residence, I suggest that there is simply no debt owed since the creditor failed to exercise their sole remedy of foreclosure. I must insist that you immediately cease any and all collection activity or any other actions that impair my reputation and creditworthiness. If you fail to do so, I will have no choice to exercise my rights and remedies, both under Federal Fair Debt Collection Practices laws, and similar lace w:st="on">Californialace> state laws.

Sincerely,

[shojmcm]

Thank you so much for the reply. I have done a lot of research but I was a little lost when putting it into a letter. I just want the bank to leave me alone so I can start rebuilding my credit. I have not looked into BK not unless they come after me.

[desertrat]

shojmcm,
Thanks for bringing up this important step in moving on post-foreclosure. I am still waiting for my 1st lender to file NOD and start counting down to a sale date, but may face this same problem someday.

Good luck and please keep us posted any success with using the letter provided above.

[avwill]

Hi friends,

I have a similar dilemma to Josh's except my townhouse was in Florida. I have received a motion for summary judgment, but not a judgment yet for the foreclosure. Since July I have received letters demanding payment of the 20%. Should I wait until the foreclosure is complete to deal with the collection agency. Because the 2nd mortgage was used to purchase the home, can I get out of paying or should I try to start negotiating while I still have no income due to being temporarily unemployed? Any advice is greatly appreciated!

Thanks,

avwill

[AZOwner]

Notify the 2nd that the collateral for the property has been returned to the first, and they should contact the first mortgage holder for their piece of the pie, if there is any. (most 1sts give the 2nd a grand or 3).

Then tell them you will negotiate a settlement at their convenience.

Unless you file bk, they will eventually:

1. negotiate a settlement of 20 - 30%
2. write the balance off and send you a 1099
3. eventually take you to court to settle the debt

I recommend you be proactive . . .