Can I sue my bank for giving me a fraudulant loan in 2005?

[Mingo]

In 2005 I put my home of 16 years on the market so I could buy a new home with my fiance. My fiance and I found a perfect home to buy but his had sold, mine had not yet. I wanted to put an offer on the new house, contingent on the sale of my house but the realtors suggested a stronger offer would be for me to take an equity line out on my home for the down payment on the new one. After all, my home should sell soon for $279K, right? The loan depatment at Bank of America was happy to oblige, only that they couldn't loan me the $140K while my house was on the market. So, they said, "take the home off the market for a day or two and we can put the loan through." While it seemed harmless at the time, for the bank to BREAK THEIR OWN RULES TO LOAN ME THE MONEY I am now in such financial hardship, I cannot sleep at night:
1) my house never did sell, so I short-sold it in Feb 2009 for $95K, 'charging off' the balance due on the second mortgage they had given me.
2) the two years I managed the mortgages on that house has drained me of all capital, making it hard to meet the mortgage on the house we bought. Meanwhile, of course, my commission-based income has dropped, making it harder still.
3) I've been trying to get a mortgage modification on our new home for 10 months which is another stress story (see Chase trial period forum)
4) Bank of America is after me now for the $105K balance of the charge-off. Not that I have it, I mean if I could pay $105K I wouldn't have needed the short sale, right? But I'm afraind they'll dog me forever if I don't do something.
Per the above, I now see there is good reason a bank isn't supposed to loan on equity on a house for sale. SO WHY DID THEY DO IT? Yeah, I know and why did I trust them?
I get so angry and stressed at times I'd love to get a good bastard attorney and sue their ass for all my pain and suffering. But really, I would settle for them to take some responsibility for breaking their own rules and just wipe away the slate and let me get back to rebuilding my credit back to the 750 score it once was.

Help?

[faith]

Originally Posted by Mingo

In 2005 I put my home of 16 years on the market so I could buy a new home with my fiance. My fiance and I found a perfect home to buy but his had sold, mine had not yet. I wanted to put an offer on the new house, contingent on the sale of my house but the realtors suggested a stronger offer would be for me to take an equity line out on my home for the down payment on the new one. After all, my home should sell soon for $279K, right? The loan depatment at Bank of America was happy to oblige, only that they couldn't loan me the $140K while my house was on the market. So, they said, "take the home off the market for a day or two and we can put the loan through." While it seemed harmless at the time, for the bank to BREAK THEIR OWN RULES TO LOAN ME THE MONEY I am now in such financial hardship, I cannot sleep at night:
1) my house never did sell, so I short-sold it in Feb 2009 for $95K, 'charging off' the balance due on the second mortgage they had given me.
2) the two years I managed the mortgages on that house has drained me of all capital, making it hard to meet the mortgage on the house we bought. Meanwhile, of course, my commission-based income has dropped, making it harder still.
3) I've been trying to get a mortgage modification on our new home for 10 months which is another stress story (see Chase trial period forum)
4) Bank of America is after me now for the $105K balance of the charge-off. Not that I have it, I mean if I could pay $105K I wouldn't have needed the short sale, right? But I'm afraind they'll dog me forever if I don't do something.
Per the above, I now see there is good reason a bank isn't supposed to loan on equity on a house for sale. SO WHY DID THEY DO IT? Yeah, I know and why did I trust them?
I get so angry and stressed at times I'd love to get a good bastard attorney and sue their ass for all my pain and suffering. But really, I would settle for them to take some responsibility for breaking their own rules and just wipe away the slate and let me get back to rebuilding my credit back to the 750 score it once was.

Help?

Hello and welcome to this forum,
I am sorry for your pain. I think you were given wrong advice by your realtor because they should have told you the consequences of refinancing. If you did not refinance and borrow money from your equity line of credit if you sell your house or your house was foreclosed on by the lender, you will be protected by CA Section 580b.


In California if you have a Purchase Money Mortgage and never refinance there is an Anti Deficiency Judgment called California Section 580b meaning your lender can not pursue any deficiency judgment once the house forecloses or sold. If your home qualified as a principal residence and has purchase money mortgage then if you do Short Sale, the balance owed called deficiency judgment is covered under CA Section 580b.

Your realtor should have negotiated the balance owed before signing the escrow papers by paying the balance owed within 5% to 10%, payable in 10-30 years and no interest. That's what he's paid 5% commission for.

Before hiring a lawyer ask for a PRO BONO lawyer in NACA or check the State Bar of California online and see if the lawyer is license to practice law or check if there's no complaint filed by anyone. Ask for a free consulation on the phone. But I don't know if you will win by suing them. Short sale affects your credit it is treated like foreclosure however your score will only be affected within 73 to 200 points.

You can also negotiate with BA by offering to pay 5% to 10% of the balance owed, payable in 10 to 30 years and no interest. Tell them that's the most you can do, 10% of $105k is $10,500, you can decide to pay $87.50 a month for 10 years or $175 for 5 years, no interest. Make sure that you get it in writing and that they will report it to the credit bureaus paid as settled in less than full balance.

You have to be bold and persistent but also polite and patient negotiating with BA. Please be strong and courageous, everything will be alright. Do not be afraid.

Please click the link below it may give you an idea about deficiency judgment.
Deficiency Judgments After Foreclosure - Do Banks Really Sue For Them

God bless you, take care and peace be with you.

[faith]

P.S.

NACA Member Services is always available via email at
memberservices@naca.com ; savethedream@naca.comor
by calling 1-888-302-6222 or 1-888-404-6222.


The above comments is not a legal advice but for your information only.

Thanks and God bless.

[Marshall Rosenbach Esq.]

Mingo - I think the best thing to do at this point is to try to negotiate a settlement with B of A on the deficiency. Offer them 5% payable over 15-30 years without any security. Tell them you'll sign a promissory note for the 5%figure. You can hire a lawyer to try to go after the bank, your realtor, etc., but before you know it, you will have spent $10,000 on attorneys and probably with nothing concrete to show for it.