FL foreclosure vs. bankruptcy

[Steeda]

This is long, but please help! My wife and I bought a new mobile home in S.FL.(used Wachovia) in 2005, later decided to buy a new HOUSE in 2006 in Central FL (used a real estate attorney) ref. 2 closings 80/20. We lived there for 10 months but never sold the mobile so we moved back to S. FL to make more money to afford both mortgages (HOUSE has been vacant since). Here is my question. Bills are getting tight and Fore/bank/shortsale soon. I happen to look over my loans for the HOUSE 80/20 loan and read that my mortgage broker checked the box for my 80% as a second home(Wachovia also) and second home rider doc. also and my 20% HELOC as primary. Mort. broker even wrote on both app's that our jobs were in S. Fl at the time. Our reason to purchase the home was to be primary and we moved there instantly/ got jobs/ changed DL's. Is this normal practice to have a primary and secondary loan on the same property? My attorney didn't even find it. Is he liable, mort.broker liable, am I ? Both loans have been purchased already, is it too late for legal action on their part against me since those initial loans are closed? I don't want to go to jail!!!! Bad place.... Thanks, sorry so long.

[Mary Salzer]

I have some questions, you put in your profile that your occupation is the Law, however you are requesting legal assistance, which we can not offer here. We are not attorneys....

So...if you could please clarify....these issues, please.

[Steeda]

Law Enforcement

[Andrew]

Yes we can not offer legal assitance, you may want to contact an attorney. Marshall Rosenbach who is on this website is licensed in FL. BTW what type of law enforcement are you in? I'm in law enforcement also.

[Steeda]

Code enforcement. How about we change the title from Need legal assistance to what is everybody's opinion?

[Andrew]

This really is a legal question though. I dont have an answer for you. Did you try contacting an attorney?

[Mary Salzer]

Alrighty then....the fact that the loan applications reflected occupancy in a less than forthright fashion is water under the bridge unless these were government loans....FHA or VA. There you will have some significant problems with the purpose and occupancy issues, they are very, very unhappy with the representation of the occupancy and purpose issues being misrepresented. There would be repercussions. By virtue of what you posted I doubt that these are government loans, so then, see below. By the way this is a lender speaking not an attorney.....

Now on the conventional side at this late date.....it is water under the bridge...do I like that it was misrepresented, NO. Was it right, NO. Should the Broker have his knuckles rapped with a large nasty metal edged ruler, YES. What is your exposure at this late date, minimal, could they go after you, yes, but I doubt that you are looking at the gray bar hotel....you did move into the property and as such, second home not withstanding, you were in the property for a period of time.....no harm, no foul.

What the Broker did was mix usages of the property and submit that way for pricing purposes...more $$$ in the pocket and perhaps the 2nd did not allow 2nd home usage...you did move into the property...that made it primary for the intents and purposes of the loan occupancy as stated on the second loan. This was a real FUBAR on the part of the lenders not to get the documentation correct on both loans....do I think as a lender that you are in deep trouble, no, the area that is of issue is going to be the overall deficiency and financial exposure that you may have in the event of the foreclosure with the mixed messages that these documents send. The first I assume is the foreclosing party....as such they have to treat the foreclosure as a Second Home foreclosure....which in the lending world.....oh I know we are really dumb, is considered a quasi primary property....we are not in some shops required to ROR the file on a refinance in others we are, there is a lot of disparity as to how the Second Home is treated, like primary or not....as there are rules under IRS regulations about occupancy by the owner in order to obtain the tax benefits.....

Your major concern....is a worry that you need to put aside and try to just make it work in the every day scheme of life.

The concern that I would have on these loans is the employment issues...were you actually employed in the market and was the employment accurately represented by the Broker? You say that you did work there, so as long as it was adequately represented by the Broker, then again no harm, no foul....as long as the data was correctly represented.

Occupancy since you moved into the home is a non event, employment is the issue, if you were working there and did occupy you met the spirit of the loan application on the second and as to the first, you also occupied the property and as such as a lender I do not think that you have a problem.

Please if you continue to have concerns contact an attorney...but all in all, I am not really going to recommend that you loose sleep over it. The tax issues and deficiency issues....please see an attorney.....

[Steeda]

Thank you very much! I know that took some time.... This was not an FHA/VA loan just a regular one. I even stopped the homestead exemption since I don't live there anymore so I would not get into any trouble. If this can of worms was opened, wouldn't the mort.broker/ lawyer get into trouble and maybe not me??? Thanks again.

[Mary Salzer]

Yep they should, really the Broker cause the misrep occurred at that level, but then again the Lender did not catch the mixed usage/occupancy issues and we underwrote those as twoies combos. So if both loans are with Wachovia, then the same underwriter should have approved the first and second simultaneously....her/his bad.....OOOPPPPSSSS....always read the paper guys and gals....the paper tells the story.

[Steeda]

Your awesome with helping people, thanks!!! Actually the S.FL home is Wachovia, where we live now, the C. FL 80% is Wachovia, the 20% is HSBC. So the they were seperate. We closed in Central FL and the mort. broker and lawyer were not present. Only through phone and paperwork, faxed all to lawyer. So I take it no jail time/ criminal charges

[Mary Salzer]

If we were to pursue the misrepresentation that existed in these files we would need a prison/jail the size of a medium sized third world country to house the offenders.....

[Steeda]

Thanks again!!!!!!

[Mary Salzer]

You are very welcome and come back if you need anything that we can assist with...please.

[Steeda]

Hi, its me again. I'll make it short. Few questions. Reference yesterday about our wacky mortgage broker putting our 80% as vacation home and 20% as primary. Our loans were Wachovia(80%) and Northstar lending(20%) since bought out, the bottom of some papers say fannie mae form 1003.

1) This does not mean these are govt. loans, FHA/VA right?
Because yest. you said they are real strict about occupancy.

These papers from the closing that I have are copies without me/ my wife's signature we received before we signed.
2) Is this normal, why didn't we get the signed ones?

On the Uniform Residential. Loan App. the mort. broker on the 20% put primary residence and on FL Mortgage Brokerage Contract she X'd the box 2nd Mtg.
3)What kind of nonsense is this? Looks like she screwed up a lot. Normal?

You said yest. Now on the conventional side at this late date.....it is water under the bridge...do I like that it was misrepresented, NO. Was it right, NO. Should the Broker have his knuckles rapped with a large nasty metal edged ruler, YES. What is your exposure at this late date, minimal, could they go after you, yes, but I doubt that you are looking at the gray bar hotel....you did move into the property and as such, second home not withstanding, you were in the property for a period of time.....no harm, no foul.

4) What does that mean, they could go after me? To what extent? Why not the broker/ lawyer, since I'm an innocent buyer? Thanks again..

[Andrew]

If they wanted to go after you I guess they could, but they have bigger things to do. They will say you signed the documents, since it says right on the loan papers that you are signing that everyone is correct.

[Andrew]

Also if you are reallly worried, why not contact an attorney? We cant answer any legal questions here.