Short Sale Closed. . . Now being collected on for 2nd? Help!

**TotallyUnsure** · 04-29-2012, 05:00 PM

After a battle I closed my short sale about a month ago. My approval letter references both loans (both were through BOA), and includes the following:

"The owner of your mortgage note, the mortgage insurer, if your loan is covered by mortgage insurance, and Bank of America, N.A.
waive their right to pursue collection of any deficiency following the completion of your short sale and your debt is considered
settled. The deficiency is the difference between: (1) the remaining amount due under the mortgage note and mortgage or deed of
trust; and, (2) the current market value of the property plus any cash contribution you make or amount you agree to repay in the
future. The amount of the deficiency will be reported to the Internal Revenue Service (IRS) on the appropriate 1099 Form or Forms.
We suggest that you contact the IRS or your tax preparer to determine if you have any tax liability.
Bank of America, N.A. will report the debt to the credit reporting agencies as "paid in full for less than the full balance". To learn
more about the potential impact of a short sale on your credit, visit http://www.ftc.gov/bcp/edu/pubs/cons...dit/cre24.shtm.
If it is subsequently determined that the approval of the short sale was based, in part, on information which Bank of America, N.A.
later determined to be false or misrepresented or fraudulent, Bank of America, N.A. reserves the right to pursue the remaining
balance of the note.
Except as noted below, all other terms of the original approval letter will remain the same. The amendments to the original approval
are as follows: "

Which clearly says they are waiving their right to a deficiency, I also verified that both loans were accounted for in this short sale through my attorney. . .

I thought this was over until I got a letter in the mail from Dyck-O'Neal, Inc. seeking collections on the 2nd loan, oddly it looks like they are collecting on behalf of some mortgage insurance company that I've never heard of, and both loans were through Bank of America.

I've reached out to my attorney, but I'm really not sure what to do. . . any advice would be hugely appreciated. . .

Thank you.

**Cat Damiano** · 04-30-2012, 10:30 AM

TotallyUnsure,

You have the document that states that even the mortgage insurance waives the right to collect deficiency. Were you able to reach your attorney? I am thinking that they may not be aware that the rights were waived in writing.

**TotallyUnsure** · 04-30-2012, 11:05 AM

My attorney did respond and simply said to forward the approval letter as well as the HUD document proving that it closed to the collection agency, which I've done.

During my conversation with the collection agency, but before they actually saw my documentation, the collection agency claimed that they still had the right to collect from me.

I am waiting for an official response from my documentation, I just really am not sure what my rights are, although I am sure my documentation is solid (it was reviewed by multiple attorneys). . .

If the collection agency doesn't like my documentation what do I have to do then? Get attorneys involved? Should I contact Bank of America?

Thank you. . .

**Cat Damiano** · 04-30-2012, 11:12 AM

Once they see the documentation, they will be trying to collect on a debt that is not collectable. That would be in violation of the Fair Debt Collections Practices Act and all you should need if that were to happen is a letter drafted by the attorney to the collection agency.

http://www.ftc.gov/bcp/edu/pubs/cons...edit/cre27.pdf

**TotallyUnsure** · 04-30-2012, 11:55 AM

Thank you so much. . . I will read that document.

**TomEason** · 04-30-2012, 12:15 PM

TotallyUnsure

Thanks for your posts.

I recommend you carefully review the payoff demand letter for your BOA 2nd loan. (You should have received a separate document for each of your two loans). If necessary, contact your escrow officer to retrieve the one for your BOA 2nd.

Frequently a 2nd lender will agree to allow the SS to close by reconveying the loan, but in return for so doing, will require the seller to sign an agreement that the remainder of the debt, although now unsecured, is still valid and owing.

If I were you I'd be skeptical about your attorney, as most lawyers just don't get it.

You might visit the following thread to view other SSers experience.

Sold Out Junior Loans

Good luck to you.

**TotallyUnsure** · 04-30-2012, 12:56 PM

I actually only received one payoff demand letter (I assume that is what the short sale approval letter is), it referenced both loans -- probably because both loans were through BOA, it explicitly mentioned the amount I had to pay at closing (which was paid), that there was no promissory note and how much both the first and 2nd loans would get at closing.

I will check the thread you've pointed me to as well, thank you,

**TomEason** · 04-30-2012, 01:04 PM

TotallyUnsecure

Thanks for your update.

It's certainly possible I'm mistaken. However, if BOA issued only one payoff/demand statement aka "short sale approval letter", I suspect someone erred in the transaction, either BOA (on your 2nd loan) or the title company.

If that's a possibility, you well may have a reason to make a demand, or file suit. If it were me, I'd issue a demand to the title company. The title company's E&O insurance may cover their error. And they will likely chase down BOA for their possible error.

If you have a need to eventually sue, I would recommend you name all parties involved, to include the RE broker(s).

**TotallyUnsure** · 05-01-2012, 05:59 AM

After reviewing the documents the collection agency has apologized and said they verified that the debt is satisfied and are closing the account. . . I'm relieved that didn't turn into a battle. . . it was insanely nerve wracking.