Home Loans and Support

BofA walk away - deficiency judgement?

Discussion in 'Bank of America Mortgage Help' started by ijen0311, Jul 9, 2010.

  1. ijen0311

    ijen0311 LoanSafe Member

    Hi all. I hope I provide enough info here for some advice.

    My only mortgage is with BofA, formerly CW. First missed payment 05/2010. Had been on the market for short sale since 12/2009, no takers.

    At this point, I want to walk away. I'm recently divorced and can't afford the place anymore. The short sale was approved at 75k and the balance on the loan is 170k. Since we couldn't find a buyer, you see how bad the situation is here.

    My biggest concern is, what are my odds of a deficiency judgement after the foreclosure? I'm in Fl, unfortunately. I'm 26 and have no assets other than my retirement accounts, so there's not much for them to take. Any ideas on how to negotiate out of a deficiency while going through foreclosure?

    Thanks in advance.

    Editing to add for anyone going throughout this, they already called and knocked down all my credit cards with them. Sadly, before this, I've had flawless credit.
  2. SurfwhenUcan

    SurfwhenUcan LoanSafe Member

    First of all, they cannot come in and empty your accounts - I don't know why everyone thinks that, but it is a very common misperception. A creditor must win a suit, petition for deficiency, win the petition and then file separate action to garnish wages or levy bank accounts. They don't walk into your bank and empty your accounts.

    Now, Florida does not have non-judicial foreclosure, where they auction off your house to a private party on the courthouse steps. There is only judicial foreclosure in FL. Also, FL does not have anti deficiency statutes where some mortgages are protected from deficiency in the event of foreclosure. You should research if any bills are pending in FL that would enact an anti deficiency statute.

    Don't worry about your credit, a short sale would have damaged it just as badly as a foreclosure - you did not have a way out of this without damaging your credit. Happily, credit is restorable in a matter of a couple of years as long as you put yourself in a stronger financial position and stay there.

    If you let the place foreclose they may come after you for deficiency. IF they don't know about your retirement accounts don't tell them. In any case, if they sue for deficiency it goes like this: Summons to foreclose, you answer the summons, a trial is set, have the trial and then when they win the foreclosure suit, they petition for a deficiency judgement. At any point, you can file a BK (7 or 13) and protect yourself. OR, if you work it right, that whole process for foreclosure trial I laid out? Stretch it as long as you can, and save every penny while you're living rent free. Then when they get a deficiency judgement (that is, if they bother, banks know you can't get blood from a turnip) you, having already researched which BK is best for you, wait until you hear from them and see what their intentions are. If the letter says anything about garnishing wages or bank levys, call them and make an offer. Don't threaten, just be very matter of fact - "I'll give you $X to settle, full and final payment on the debt." Then tell them if they plan to pursue garnishment you will file for BK protection. Make the offer for 2 or 3% of the deficiency if you can file a Ch. 7, a little higher if you can restructure it with a Ch. 13 and wipe it out in 3 yrs. IF they don't take it hang up and file. If it comes to filing, depending on how things go, it could be a couple of years from now if ever.

    Oh, and by the way, if you have a lot of CC debt, look into debt settlement programs, I know a couple good ones. Unless you qualify for a Ch. 7, thhen justt wait and include them in the Ch. 7.
  3. SurfwhenUcan

    SurfwhenUcan LoanSafe Member

    Oops, I forgot to say, sometimes they can empty your account if your liquid assets are at the same bank that is suffering the deficiency - for example, like when you have credit card and checking account with 2 grand in it with B of A and then default on the card - don't be surprised if you wake up one morning and have no money in checking, with B of A sitting there licking it's lips all fat and happy. Don't let that happen.
  4. ijen0311

    ijen0311 LoanSafe Member

    Thanks, Surf. I actually cleaned out my checking and savings earlier today and moved it to another bank. I'd rather not take the BK route (I have very little other debt), but if they lodge a huge judgement against me that would be my only option. Everything you posted was quite helpful, I do appreciate it.
  5. doxielov

    doxielov LoanSafe Member

    I've been fighting with B of A since august of last year. Had a CW loan that I defaulted on starting 5/08, started a modification with a 3rd party the following january, was told that I was getting a new loan when the mitigation company vanished and B of A took over the loan. They 'fed ex'd me a trial package' which I never received, and despite calling them every other week for a year, never receiving the package and updating my financial information over the phone half a million times, I was sent a letter stating that I didn't qualify because I never completed the trial period. (that they never sent me the documents for).

    I've since put the home up for short sale, but am concerned about a deficiency suit if I'm able to sell (I live in FL as well...southwest...inundated with foreclosures and short sales...barely any activity on the house)...I am upside down about $200K. I've heard that BofA isn't forgiving debt.

    Met with an attorney today who is going to hound them for me to modify the mortgage...I make a good living and can afford a reasonable monthly payment(went into default when the interest rate adjusted to 10%, which unfortunately coincided with the death of my husbands child....heavy medical bills and funeral costs...even a hardship like that was of no interest to good old BofA.)

    If I can't modify with legal representation, and they won't agree to a short sale with no promissory notes, I will go Chapter 13 and they will have to leave me alone. It seems horrible to be bankrupt...which at the age of 37 and being a homeowner for 12 years, I never would have imagined, but I want to keep my home.

    Also, there is a new law in florida that can require the bank to consider modifying a loan for somebody in a chapter 13.

    Florida Chapter 13 Bankruptcy Mortgage Modification Program

    Good luck to everybody who is unfortunate enough to have to deal with the bailed out B of A. There will be a special place in hell for them.
  6. TMan627

    TMan627 LoanSafe Member

    Your situation seems almost identical to mine. I'm stopping payments this month, and have spent the past 2 months with lots of research and meetings with several lawyers exploring options from ss, d-i-l and chapter 13's. I have a townhouse in west palm with 173k on the note and a property value of 81k. Bought it in Jan 06 with a 30yr fixed. I've always been conservative , never missed a payment, BOA has no reason to talk to me. I don't want to mod, I just want to get out; my neighborhood has had more crime and break-in's lately. I'm so far underwater, I won't see surface again, even in 10 years. My credit is tops, never missed a payment. Today's plan is to stop paying and see what happens from there. Palm Beach county just started a mandatory mediation for all foreclosures. Hopefully then I'll have BOA's ear, even if just for 2 hours.
  7. flagirl4444

    flagirl4444 LoanSafe Member

    In Florida they have 5 years to sue you for the deficiency and then 20 years to try and collect. In the past banks have not pursued deficiencies, but it is starting to happen and may soon become much more common. However, they are mostly concerned with going after investors and "strategic" defaulters who just walked away without trying to work anything out. They are not interested in pursuing anyone with a hardship, extenuating circumstances, or who tried to work out a solution (in your case a short sale) with the bank. I suppose you could just just wait out the 5 years and if they come after you then file bankruptcy. If not, you are free.
  8. sparky1loan

    sparky1loan LoanSafe Member

    Contact me at the e mail below.
  9. shak_d

    shak_d LoanSafe Member

    ijen0311, any updates? did you end up filing ch13?
  10. theylive

    theylive LoanSafe Member

    BofA foreclosed on me in 2010 and I had a conventional first and a second with them. They wrote off the first and sold off the second. The second pursued me for $30k and I was able to settle for $4k. I'm in jacksonville, FL. You'll get through this, it stinks soooo bad while it's happening, but they're are green pastures ahead! I've heard that they usually do not come after you for just a first mortgage, especially if you had PMI, and they won't pursue an FHA loan... usually only conventional.

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