Bank of America - Short sale with collectible Debt

[nal67]

FYI, I am doing a short sale on a property (vacant land in CA). B of A has approved the short sale and I have been able to negotiate a settled paid in full. They said they will report Setteled Paid in Full for less than the amount owed.

However, they said they will not remove any late payments. I actually have a lot of leverage because some legal issues related to access can only be solved by myself. However, they haven't budged even when I tried to escalate to higher management. I am actually not late at this time but was planning not to make payments until such time as it closes. No go and they stuck to their guns on this. Looks like Shkir is really lucky to have gotten the deal he did.

Obviously however, they can agree to settle a balance prior to the closing.

NL

[Cyn808]

We also have vacant land in California that was bought for our primary resident. We have had the land up on the market for 2 1/2 years. We lost our first offer through complication with the water agreement from the previous owners.

We decided in March 2009 to drop the price below our loan since nobody could get loans to purchase the land, and our financial situation dramatically changed since we bought the place. In April 2008, my mother got ill with Stage 4 Ovarian cancer and we may at anytime need to take care of her since she is filing for bankruptcy for all her debt.

In Dec. 2006 my husband got laid off from his job that would enable us to build our house, 7 months later I had a baby, and I stayed home. We used all our savings to continue to pay for the land. Now that our savings is depleted. My husband finally got a job, but it does not nearly pay what he got before and I went back into teaching... with child care, rent, car payments, We can not afford to build and maintain a agriculture.

We have our 1 loan through b of a. We owe $605K plus the payments we stopped paying in March 2009 since that what we were told to get a short sale. We have 2 offers one at $425K & $450K. We can't seem to get anywhere with B of A. They can't find our files. We can't get neg. from B of A. HELP! What can we do to get a short sale accepted and avoid a forclosure. Bof A said they start the process of forclosure. We do not know what to do.

[Cyn808]

nal67 how did you get the short sale on land moving? Who did you work with in terms of agent and b of a representive? thanks

[nal67]

Cyn808,

Sounds like you could have an issue similar to ours. We had an access easement issue with the next door neighbor. They were threatening to take the easement away and our involvement was needed to keep it. Not having it made the land worth way less. We also had some potential liens that we would have to defend against. We wrote a hardship letter that included the reasons why time was of the essence. In our situation we needed a buyer right away to take over some joint costs with the neighbor in order to preserve the access.

Our situation was not nearly as bad as yours - my husband is unemployed but we have not yet been late on payments.

After I sent over the package I started calling every day and explaining to them why we needed to do stuff quickly and got some sympathetic ears. We got someone assigned to negotiate who seemed to understand the situation as the first thing she asked us was "is the title free of clouds" - most negotiators don't use this language. I told her it was for the moment but may not be going forward. I included a BPO that showed the lot was worth way less than our offer and we did have two other offers that were morethan $100K less.

She kept telling me things would take a long time but then would get the approval in the next day or so. I really do believe she went above and beyond and put our files above others as she understood the situation. I tried to use the leverage to get future lates removed if we couldn't close before our next payment and I also asked to have paid in full for the full amount as we had to spend some legal money in order to secure the easement. No go. However, they initially were not willing to settle paid in full but I was able to negotiate on that point.

My realtor friend is a short sale specialist and she was amazed at our process and success. She usually turns down BofA short sales as they are unreasonable and will typically not settle.

FYI, our payoff amount was just under 70% of our loan balance.

Good luck.

[Cyn808]

Thank you so much! Did you have to sign a promissory note for the difference? Nobody seems to know what to do in Morgan Hill area. We do need to get it sold ASAP so that the next buyer can secure their spot with the water agreement. Nothing has been worked out...

[amiesheikh]

Just somthing to think about regarding promissory notes: Once you close on the short sale (even if you sign a promissory note) the bank has no collateral (ie your property) to hold over your head and threaten to foreclose on or sue you on. It's an unsecured debt at this point (kind of like a credit card) so the worst they can do is harrass the heck out of you for their money. Make the payment you agree to for a month or 2 and then call and try and renegotiate the repayment terms or negotiate a payoff. Tell them that you tried making the payments for a few months but your hardship has worsened and you can't afford it anymore. Offer an amount to settle with them on and continue negotiating until you get what you want.

[nal67]

They are not going to make us sign a promissory note. They did say at first that they were going to but we used our leverage of having to participate in maintaining the easement to negotiate that the debt would be paid in full (for less than the amount owed) rather than a charge off which was what they initially said our only option was. We had our agent write a letter to say we were going above and beyond what a buyer would normally do in our circumstances and that our participation was still needed.

If the water access issue is a time sensitive one, then you can use it to get them move the sale along. If you have any leverage in terms of the lot being worth way less if you lost this buyer or if you walked away, you can try to get them to agree to a settlement rather than a charge off.

BofA does seem to play hardball but will back off a little if given a reason.

When they initially told us they would only do a charge off and we would be responsible for the difference, the negotiator did allude that if it was purchase money and we demonstrated that we could not pay, the collection department would likely issue a 1099c and that would be the end of it. However, since it was not a primary residence we did not want to take the risk of not knowing if they would try to collect or sell the debt to a collector.

We are in the SF Bay area too.

[october1917]

Ok,

So our process was long, stressful, and I wish I could say worth it in the end. But, in all reality, it wasn't. We live in PA and did a short sale. BoA held our 2nd loan (our first got paid in full). BoA received 26K on a 90K HELOC. We signed the letter everyone is talking about. At some point in mid-June, collections finally began calling. We negotiated with collections for 15K over 10 years.

Here is the kicker: BoA will not cancel the rest of the debt until they receive all of their 15K. So, what that means is, if we took all 10 years to pay it back, we would not be able to take part in the Mortgage Forgiveness Act, which expires in 2012. So, we would be responsible for over $50K of taxable income. A friend of mine, who is a CPA, figured it out to be roughly $11K just in taxes.

My advice, if you are thinking Short Sale now, just do the Hope program. It wasn't around when we got into financial trouble. All we have done is try to be responsible and sell the property and BoA made every step more and more difficult. Now that the house is finally sold, we are still having to deal with this.

[tc4gold]

Re: BofA, I had two credit cards with them of 10k balance and 39,500k balance. I ran into difficulty (job loss, tenants not paying etc,etc all in quick succesion). I was able to negotiate a settlement of 20c on the dollar and the letter they sent as per my request states "in return, upon receipt of all required payments, your account will be considered settled, and you will ot be obligated to pay the remaining balance provided no additional charges appear on this account after the date of this lettter.....If the above referenced settlement results in debt forgiveness of over $600 the IRA requires us to report the amount of forgivness of debt to the IRS.

I don't know if this was different because it was credit card and not mortgage but that was my experience with BofA and I didn't have to go through a debt settlement agency and pay their fees. I was offered the chance to pay the settlement in 3 payments also. They were very nice to me after the first few calls but then I think I got an understanding person who could really see by my answers to her questions that I was in genuine trouble and couldn't pay with no prospects of paying in the near future. Up till then my credit was perfect. Hope this helps.

[MagicDude]

I had a crazy idea but I don't know much about short sales so I thought I would ask...
If the loan mod option doesn't pan out for me... Can I short sell the house to my fiance (who lives with me but isn't on the deed)?
My hardship is lack of biz (self-employed) but SHE has a 5yr. job history and would probably qualify for all the first time buyer perks, tax breaks, etc.
She could get the house on the cheap and we wouldn't have to move!
Thoughts?

[jorswift]

We had our loan with CountryWide in IN for 123K. I lost my job, moved the family and now we have 2 offers for short sale for now BoA. We submitted out paper work in May. It is now the end of Aug. and we are only in Phase 1. We were in phase 1 ten days ago, but they switched us to another negotiator, so they are telling me we they have another 15 business days till phase 2 then they have 30 biz days. How long does this take? My wife lost her job, and is due with out baby in Sept. so now we are behind on payments for atleast 2 months now. One of the offers I believe is pre-approved for a loan for around 90k, I think. Will they accept this and what else do we have to do? We have a realtor and a negotiator that is highered through the state for all short sales, but dont hear much from neither one of them. I have had to call numerous times to find out what is going on. Can anyone give me some help, tips, other phone # to call to speed up the process or anything? Please help. Thank you.

[bongocheetah]

Hi Everyone,

My short sale finally completed in March 2009. I had to sign the document saying that I mention BofA wanted me to sign, at the be)ginning of this email thread. This was for my 2nd which was short (BofA HELOC, total owed 110k, short sale recovered 39k for BofA, remaining was deficiency which was short). First loan was paid in full from closing proceeds.

As discussed the letter said "BofA Recovery will be in contact with me to recover the debt.." however no one contacted me until recently. The HELOC account just kept getting interest accrued every month. I finally called BofA and they said their system probably missed to close the account as a "normal" acount and move it to their recovery. Within few days, they closed the account and moved it to their recovery. I got a call from a lady. She advised she is open to options to do installments, but she wants me to come up with what I can pay and over what period. She gave me a month.

Its been 20 days since then. I am not sure what to call her back with. I don't have ~$70k to pay to cover for the deficiency. Maximum I can pay is about 10k in installments.

I am afraid to call her again. I have heard that if it doesn't work out they will sell my debt to some 3rd party collection agency who are really brutal and make life hell with calls and intimidation.

Anyone has any advice? Anyone has worked with recovery recently.

Thanks anyone....

[Perceval]

bongocheetah -- I'm anxiously awaiting the result of your negotiations with BofA since we're just starting this process. We're current on our mortgage but can't sustain the payments since we have moved, the current tenants are leaving, rents have dropped nearly 20% due to glut, and the taxes went up $100/month in Norfolk, VA.

In terms of assistance, the best I can provide is the name of an attorney, in Norfolk, that I've contacted to represent us to BofA. He was recommended by a friend who's a real estate agent. His name is Brent Thompson and seems to be straight shooter. You can search online for his name in Norfolk to find him. He may be able to negotiate. His fees are capped (below $1000).

Best of luck and please keep us posted.

[ccbelland]

We are under contract to short sell our house. We have a difficiency of around $350k. Like many, we too received that letter saying that we will be held liable for the deficiency. We were told that we could settle by signing a promissory note of around $180,000 paid over the next 15 years (0% interest). From what we learned, the magic number is 80%... if your deficiency is less than 80% of the mortgage balance, they will want that difference. Thus, the $180,000 is that balance to get us to the 80%. Does anyone have any thoughts on this? good deal? I am concerned about the tax ramifications as it is 15 years down the road and the debt forgiveness laws expire.

- Is it better to sign that letter and then let it go to the Recovery Department? Maybe the Recovery Department will give a better deal... or maybe not?
- I am interested in hearing more stories about anyone who has gone through with the Recovery Department
- Does anyone have any thoughts on negotiating more on this Promissory Note? Perhaps offer some cash at closing to get rid of this balance or a portion?

[notlateyet]

After months of trying to get a loan modification and struggling to make my mortgage payments, I've finally decided to let go of the emotional attachment to my home and make the best BUSINESS decision. I decided to list my condo and pursue the short sale route with BOA. I listed my condo (in CA) a short time ago and have a CASH offer on the table. I will be submitting the documentation to my "senior" negotiator who was handling my loan modification application. The negotiator is in the presidents office and I am hoping that will carry some weight as she submits my documentation to the short sale department.

I have a 1st and 2nd with BOA, formerly Countrywide. I am not sure who the investors are but I do know that they are not one in the same. I owe a total of about 352K for both loans and the cash offer that I received is for 160K, leaving a deficit of about 192K. I am hopeful that the fact that the offer is cash BOA will accept it. Does anyone have any experience with CASH offers?

Based on what I have read following this thread, sounds like they might come after me for some or all of the 192K, I am reading that right? In any event, I will be making sure to submit a letter requesting that I not be held liable for the balance and that the debt shows as PAID AS AGREED IN FULL.

Anything else I should be considering as I move through this process? It has been a really long and tiring journey and I am so ready to begin a new chapter, I'm sure that most of you feel my pain. Any advice is welcome and appreciated.

Thanks!

[dedsmalls]

I am in the same boat. Owe 293k. Have a cash offer of 160k. Sent in shortsale package to BofA 2 weeks ago and apparently they are still "getting my info situated" Let me know how it goes for you.

[SIE-1]

Although this is my first post, I have been reading this forum and I must admit, it is the single best source of information on the web about BoA short sales.

Here is my situation… After about 2 years on the market (plus an additional 6 months as a short sale) we finally sold our house, via short sale, back in May of 2009. This was only after I lost my job, and we could no longer handle the mortgage.

The first mortgage holder, Provident Funding, accepted the deal, and we are finished with them. The problem is with Bank of America. We had a $300K HELOC on the house with B of A. During the short sale negotiations, the person that I spoke with in their Loss Mitigation department told me that if I could get their portion of the short sale settlement increased to $15K (the 1st mortgage holder originally only wanted to give them $5K) that they would forgive the rest of the balance, and it would be listed on our credit as a Charge Off. This was supposed to happen once the loan was closed, and sent to the B of A “recovery department”. Unfortunately, this promise was made to me over the phone, and not in writing. The only way to get this to go through was to sign the dreaded “collectable debt” letter. I was told that the actual letter that BoA had us sign was their “Official standard letter”, and could not be changed to reflect these terms, but I was assured that the recovery department would forgive the debt, and just send us a 1099C. The deficiency was for $285K. The first mortgage was for $745K. I live in Georgia (a recovery state), so a foreclosure was not a favorable option. So, with much trepidation, we signed the letter and closed the sale.

After about a month, I received a letter from BoA telling me to contact them about repayment of the balance. So I called them… Now, I know that I shouldn’t have been surprised to hear that no one in the recovery dept had ANY IDEA what I was referring to, when I told them that I was told that BoA was supposed to send me a 1099C for the balance.

They told me that they are willing to settle for $140K, or something like that. I told them that it might as well be $140 million… I have been out of work since October of last year, and my wife is about to go on maternity leave in a few months. We just don’t have the money. When we contacted the rep from the loss mid dept, she denied saying that the debt would be forgiven.

So far, I have been escalating this up through the ranks within their recovery dept, but I keep getting the same song and dance…. That I signed the doc, and that is all that matters…

I know that this is now an unsecured debt, with no collateral behind it, but my fear is that BoA will either sue me, or worse yet, sell the note to some third party collection agency (those guys are vultures).

I really do not want to have to file for Bankruptcy, because this is pretty much my only debt, and the only blemish on my credit.

Any suggestions on if there is any way to make BoA honor their verbal agreement? If I have to end up filing BK, it will really tick me of for working so hard to get BoA the $15K.
If I do end up having to file BK, I would have been better off with the foreclosure.

[tommyVA]

I have first mortgage with Indymac balance of $365k and second mortgage with bank of america for $144k. Short sale price is $316k. Indymac has approved it. Just received a letter from bank of america for approval with $25k upfront and rest of balance to be collectable balance. They say that their recovery department will be contacting me once we settle.
Is it wise for me to sign this and settle? or can I try to negotiate with bank of america? My short sale expert said that when he contacted Bank of america to negotiate they told him "nothing can be done, we gave you the terms in which you need to agree to in order for short sale to settle"
What should I do?
What type of terms should I be expecting of any from their recovery department?
I would very much appreciate if someone can let me know.

[faith]

Originally Posted by SIE-1

Although this is my first post, I have been reading this forum and I must admit, it is the single best source of information on the web about BoA short sales.

Originally Posted by SIE-1

Here is my situation… After about 2 years on the market (plus an additional 6 months as a short sale) we finally sold our house, via short sale, back in May of 2009. This was only after I lost my job, and we could no longer handle the mortgage.

The first mortgage holder, Provident Funding, accepted the deal, and we are finished with them. The problem is with Bank of America. We had a $300K HELOC on the house with B of A. During the short sale negotiations, the person that I spoke with in their Loss Mitigation department told me that if I could get their portion of the short sale settlement increased to $15K (the 1st mortgage holder originally only wanted to give them $5K) that they would forgive the rest of the balance, and it would be listed on our credit as a Charge Off. This was supposed to happen once the loan was closed, and sent to the B of A “recovery department”. Unfortunately, this promise was made to me over the phone, and not in writing. The only way to get this to go through was to sign the dreaded “collectable debt” letter. I was told that the actual letter that BoA had us sign was their “Official standard letter”, and could not be changed to reflect these terms, but I was assured that the recovery department would forgive the debt, and just send us a 1099C. The deficiency was for $285K. The first mortgage was for $745K. I live in Georgia (a recovery state), so a foreclosure was not a favorable option. So, with much trepidation, we signed the letter and closed the sale.

After about a month, I received a letter from BoA telling me to contact them about repayment of the balance. So I called them… Now, I know that I shouldn’t have been surprised to hear that no one in the recovery dept had ANY IDEA what I was referring to, when I told them that I was told that BoA was supposed to send me a 1099C for the balance.

They told me that they are willing to settle for $140K, or something like that. I told them that it might as well be $140 million… I have been out of work since October of last year, and my wife is about to go on maternity leave in a few months. We just don’t have the money. When we contacted the rep from the loss mid dept, she denied saying that the debt would be forgiven.

So far, I have been escalating this up through the ranks within their recovery dept, but I keep getting the same song and dance…. That I signed the doc, and that is all that matters…

I know that this is now an unsecured debt, with no collateral behind it, but my fear is that BoA will either sue me, or worse yet, sell the note to some third party collection agency (those guys are vultures).

I really do not want to have to file for Bankruptcy, because this is pretty much my only debt, and the only blemish on my credit.

Any suggestions on if there is any way to make BoA honor their verbal agreement? If I have to end up filing BK, it will really tick me of for working so hard to get BoA the $15K.
If I do end up having to file BK, I would have been better off with the foreclosure.

Hello and welcome to this forum,
I am very sorry to hear of what BA did to you. The best time to settle with your lender when doing Short Sale is before signing the escrow and promissory notes. Your real estate agent could have advised you to think it over before signing the documents. But I guessed he was eager to get his 5% commission.

Did you make any notes as far as the person whom you have talked to, the time he called, his phone number, his name or even recorded the conversation stating that BA will not pursue the deficiency judgment against you? Did you even email the person or your negotiator stating that they will not pursue you for any balance owed? BA gave instructions to the Title Company on what to do with the Short Sale.

Please checked copies of your loan documents and see if there’s instruction from BA to the Title company that says CW and BA and its investors and insurer accepts the Short Sale with the following conditions such as: The buyer is for this name only, the commission is 5% to the agent, no costs to the seller, the name of the Title company etc, checked the documents and see if they say they will not pursue any deficiency judgment against you. It’s should be in the thick papers that the title company gave you, the one that has no signature.


If this deal is not in writing, it’s going to be very hard for you. Agreements do not always have to be in writing to be binding and enforceable. But the most important thing to remember about verbal agreements is this:

For verbal agreements to work, they require the complete, accurate, and fair memory of both sides.
In reality, rarely happens. Memories are selective, fallible and faulty. In some cases, like deficiency judgment, lenders will lie to their teeth and deny that such verbal agreement or conversation took place.

That’s why it is very important to put everything in writing. You probably need to talk a Real Estate Lawyer and a Bankruptcy lawyer in Georgia. Make sure you check the Georgia BAR Association to check the lawyers license and if he has a good rating.


Deficiency judgments are permitted in Georgia, however, anti-deficiency laws mandate that the foreclosed property sale be final, and the lender has a finite period of thirty days following the foreclosure sale to seek a deficiency judgment.


You can probably start negotiating with your lender. BA may simply refuses to budge, but most times they will be open to doing whatever it takes to reach an agreement.


It is better to negotiate with the original lender for a good credit report rating, and here's why: On your credit report, there can only be one mark for any debt. In other words, if the loan has gone to a collection agency, you can only have one bad mark for both the original lender and the collection agency. Since the original lender has the control over what this mark says, you should strive to negotiate a good credit rating mark with them.


Above all, don't pay the lender or collection agency anything until you have everything that you have agreed upon in writing. Insist that they send you a letter outlining the exact amount that will be paid, and exactly what comment they will put on your credit report. Don't be fooled into doing anything before you have it on paper.

Tips on how to negotiate to your lender/creditor.

▪Find out if the statute of limitations has passed on your debt.
▪When negotiating, be cool, as your creditors can sense urgency
▪First, try to get "extras" like fees and late charges removed
▪Next, try to talk the balance down. Getting in down to 30% of the original balance is typical, but it could go as low as 10%
-Let the creditor know you are trying to take responsibility for your past credit history and regain control of your financial situation.
-Explain your situation, but don't over-explain. Tell the creditor what you can do, rather than what you can't do.
-Start negotiating as soon as possible. Negotiating with the original creditor is much easier than dealing with a collection agency later.
-Most creditors are willing to negotiate a settlement for less than the full amount of the debt. Some creditors will accept as little as 30 percent of the debt.
-Start making an offer from 5% to 10% of the balance owed before making an offer to 30%, payable in 30 years and no interest. Use the old scare tactic telling your lender that it’s for their best interest to accept the offer instead of you filing for bankruptcy, and if you file for bankruptcy they will get nothing.
-Make sure everything should be put in writing and a letter that states they will not pursue any deficiency judgment against you and they will report it as paid settled in less than full balance to the credit bureaus.
-Don't ask the creditor how much it will accept. Tell the creditor how much you can pay. NEVER OFFER TO PAY MORE THAN YOU CAN.
-Create a budget before negotiating a settlement. Creditors may want to know your complete financial situation before agreeing to a settlement.
-If you can't afford to pay all creditors at once, negotiate a settlement with the creditor with the smallest balance. Once that debt is paid in full, negotiate with the creditor with the next highest balance.
-Get all settlement agreements in writing. Keep copies of letters, statements, phone call notes and other papers for your files.

Above all else, don't give up. This process takes time. Remember that thousands of people resolve their credit problems every year. By being persistent, you can, too.

The links below may help you take time to read it.
http://www.atlanta-bankruptcy-attorney.com/html/georgia_bankruptcy_law_questio.html
http://www.creditinfocenter.com/repair/MethodOfVerification.shtml
http://www.creditinfocenter.com/debt/settle_debts.shtml
http://www.creditinfocenter.com/forms/sampleletter12.shtml
http://www.creditinfocenter.com/legal/CourtLawReference.shtml

Hope this helps.

God bless and take care.

[SIE-1]

Hello Faith, and thank you for the reply.

Yes, I did take notes (including names numbers and dates) during my negotiations with BoA Loss Mitigation dept. But they refused to put anything in writing. I told the recovery dept EXACTLY what the loss mitigation rep told me, about them writing off the remaining debt, but unfortunately, when they went back to the representative who originally told me that they would 1099c me, she changed her story and denied ever saying that. Since they have the signed “recovery” letter, BoA is telling me that is all they need. They also pretty much told me that even though she lied to me, they don’t care, because they have the signed document.

I looked through my closing documents, and there are no specific instructions from BoA to the title company, beyond the “recovery” letter stating that they will release the title upon receipt of funds.

Speaking of the BoA recovery letter... I had a brief conversation with a paralegal, and she stated that due to the lack of any specific repayment terms, the letter that they had me sign, is more of an IOU, and not actually a promissory note. I’m waiting to hear back from the attorney about this, and what actual recourse BoA has after the letter is signed.

As for my real estate agent, she was completely USELESS. She was pushing me, even harder than BoA to sign the letter. I learned pretty late in the process that all she really cared about was her commission. But she had the only buyer in hand, so unless we wanted to start from square 1 again, with a new realtor, we were pretty much stuck with her.

I do have a question about deficiency judgment laws… Since the property was a short sale, and not a foreclosure, can BoA still come after me for a deficiency? Or would they just be suing me for nonpayment of the recovery letter?

I am supposed to be receiving a call today from the head VP of the BoA Recovery dept to discuss my case.

I believe he is going to ask me what I can afford to repay. SInce I still believe that I was duped into this position...I’m not sure what to tell him…

[SIE-1]

Sorry about the multiple posts – Is anyone knows how to delete posts that you authored, please let me know.

Again, My apologies.

[scottp999]

I'm confused about all of this deficiency judgement and recovery department talk. In those cases who is the investor on the loan and is it a primary residence? I ask, because I was told the investor rarely looks for a deficiency if it is a primary residence (the investor on this loan is freddie mac). Does BOA come after people even when the investor does not to try to make a profit center out of the recovery department? If that were true, there would be so many things wrong with that.

[faith]

Originally Posted by SIE-1

Hello Faith, and thank you for the reply.

Originally Posted by SIE-1

Yes, I did take notes (including names numbers and dates) during my negotiations with BoA Loss Mitigation dept. But they refused to put anything in writing. I told the recovery dept EXACTLY what the loss mitigation rep told me, about them writing off the remaining debt, but unfortunately, when they went back to the representative who originally told me that they would 1099c me, she changed her story and denied ever saying that. Since they have the signed “recovery” letter, BoA is telling me that is all they need. They also pretty much told me that even though she lied to me, they don’t care, because they have the signed document.

I looked through my closing documents, and there are no specific instructions from BoA to the title company, beyond the “recovery” letter stating that they will release the title upon receipt of funds.

Speaking of the BoA recovery letter... I had a brief conversation with a paralegal, and she stated that due to the lack of any specific repayment terms, the letter that they had me sign, is more of an IOU, and not actually a promissory note. I’m waiting to hear back from the attorney about this, and what actual recourse BoA has after the letter is signed.

As for my real estate agent, she was completely USELESS. She was pushing me, even harder than BoA to sign the letter. I learned pretty late in the process that all she really cared about was her commission. But she had the only buyer in hand, so unless we wanted to start from square 1 again, with a new realtor, we were pretty much stuck with her.

I do have a question about deficiency judgment laws… Since the property was a short sale, and not a foreclosure, can BoA still come after me for a deficiency? Or would they just be suing me for nonpayment of the recovery letter?

I am supposed to be receiving a call today from the head VP of the BoA Recovery dept to discuss my case.

I believe he is going to ask me what I can afford to repay. SInce I still believe that I was duped into this position...I’m not sure what to tell him…

Hello there again,
Don't worry about your double postings it happens sometimes.

Tell that BA VIPs the truth, that the only reason why you agree to a Short Sale is the negotiator what ever his or her name assured you that BA will give you the 1099C for the deficiency judgment and you were told that they don't put it in writing but issue the 1099C. Tell her that you've done your best to help BA get back their money by doing the Short Sale, that they BA got their money back but you lost everything and you don't have the money to pay that $140k.

Mentioned to her that you are thinking of suing BA for deceptive practices and scamming you and forcing you to sign a document that you do not understand and you are under duress when you sign it. Tell her that you will contact ABC News, all the media and make sure that the people of America know how BA trained their people to do business in a deceptive manner.

Mentioned to her that you have evidence of that conversation, the named the time that she called when she promised the 1099C. Mentioned to her that you will be filing for bankruptcy which is the most effective scare tactics in this situation.

The bank can not force you to pay even though you sign a recovery letter. They have to take you to court, get a judgment and then you can file for bankruptcy. Maybe it's better for them to take you to court so you can tell the court that you were duped into signing the recovery letter and you were promised by the negotiator or whoever you spoke to that they will give you a 1099C for the balance owed, at least when BA take you to court they spend the money and not you.

Something to ponder.
1. BA take you court, they get the judgment then you file for bankruptcy.
2. The $140k is now unsecured loan and can be wiped out from bankruptcy.
3. BA will send you to collection agency but you can tell you that you have filed for bankruptcy or tell them to stop calling you and bring back the loan to the original lender which is BA.
4. Or you can tell BA now that you are willing to settle even though you are the victim here and you were duped into signing the recovery letter but you can only afford to pay 10% of $140k which is $14,000, payable in 5 years, no interest for $233.33 a month. Make sure you get a letter regarding the payments and that they will not pursue any deficiency judgment against you and to report it to the credit bureau as paid settled in less than full balance.
5. Consult a lawyer and ask him if you can win against BA.
6. Consult a lawyer too if you can sue your real estate agent and see if there's violation that this real agent did to you. She has Fiduciary Duty to you as her agent to make sure that you are not being duped or scammed by your lender and act for your best interest.

see link: http://www.realestatebuyersagents.com/pleasanton/duties.htm

7. Banks do not sue homeowners who doesn't have ability to pay the money they owed to them. Litigation is very expensive, unless they see you have a lot of assets and money and can afford to pay $140k they might do it.

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

Filing for bankruptcy should protect you from any collection action taken by your lender. However, your ability to file for bankruptcy protection will depend on your income, assets, and numerous other factors which you must carefully consider to determine if bankruptcy is the best solution to your problem. I strongly encourage you to consult with a qualified bankruptcy attorney to help you figure out if bankruptcy is a good choice for you, and if so, which type of bankruptcy you should file.

Check also the link below and each case, it might help you: http://www.lawskills.com/code/ga/44/14/161/

You need to be bold, persistent, patient and courageous.

I pray that God will help you in your time of need and favor you from BA Executives and employees. May God bless you always. Peace be with you.

[faith]

Originally Posted by scottp999

I'm confused about all of this deficiency judgement and recovery department talk. In those cases who is the investor on the loan and is it a primary residence? I ask, because I was told the investor rarely looks for a deficiency if it is a primary residence (the investor on this loan is freddie mac). Does BOA come after people even when the investor does not to try to make a profit center out of the recovery department? If that were true, there would be so many things wrong with that.

Hello,
In the case of a homeowner who has a 1st and 2nd mortgages, the investor or the lender does not seek for the deficiency judgment but their PMI(Private Mortgage Insurance).

PMI is extra insurance that lenders require from most homebuyers who obtain loans that are more than 80 percent of their new home's value. In other words, buyers with less than a 20 percent down payment are normally required to pay PMI.

.
PMI protects a lender against loss if a borrower defaults on a loan and by enabling borrowers with less cash to have greater access to homeownership. Since they paid the lender whatever is the loss, they now turn to the homeowners to get back whatever money they can get back from the borrower. That's why when you do a Short Sale it is best that you do not sign a promissory note required by the banks or lender, instead negotiate to pay 5% to 30% of whatever the balance owed, payable in 5-30 years and no interest. Asking them to give you a letter stating that they will not pursue any deficiency judgment against you. AND you do not sign the escrow papers UNLESS they give you that letter. EVEN if THEY, the Bank says they don't give you a letter, you still demand OR ELSE YOU WILL NOT SIGN THE ESCROW, no escrow, no SHORT SALE, NO Short Sale, no MONEY to the BANk.

I wished SIE have asked for help first before signing the documents and checked the BBB search of his agent. I am sure that agent's rating is F. If there's a lower grade than F that's what I will rate that agent.

SIE don't worry, just follow your heart and read the previous posts.

God bless you always.

[faith]

SIE,
You can also file a complaint against your Real Estate agent to the Department of Real Estate, here's the link:

Filing a Complaint with the Department

I hope all is well with you. God bless.