Chapter 7 - Now 2nd Note Holder Threatning To Foreclose

galenaz

LoanSafe Member
May 12, 2013
58
3
8
Hi Everyone,

I am posting on behalf of a dear friend of mine.

Here is what I know:
We are in Arizona
This was NON purchase money
2007 Refinanced and took out second mortgage
1st = 200K
2nd = 85K

Approx 2009 they filed Chapter 7 which discharged the 2nd mortgage. They were advised at that point to file Chapter 13 a few months later to remove the lien on the second, but they never did.

Fast forward almost 5 years later. They are CURRENT on their first mortgage now being serviced by GreenTree - Not sure what the balance is.
They received a letter from "Partners for Debt relief" - googled them and they sound REALLY BAD. Here's a page a found:
http://www.complaints.com/2012/january/20/Don_t_do_business_with_Partner_s_for_Payment_Reli_263057.htm
They called this company, PPR, who told them they needed to call someone else, Matt Kadash - the number always goes to voicemail and they have not received a call back. The letter also references Trustee Corp.

Letter is dated 5/30/14 but assignment of deed trust to PPR was not signed until 6/3.

My friend is meeting with her lawyer on Monday.

This whole thing seems very fishy to me. Cannot reach the person they were told to, 2nd mortgage saying they can forclose on the house when they are current on their first, silence since 2009 and all of sudden this. It just seems odd so I am reaching out to the experts.
I did find this thread http://www.loansafe.org/forum/threads/2nd-mortgage-charged-5-years-ago-now-facing-foreclosure.88351/
But it seems Chap 13 is their only option. Wondering if this is legit.

Thanks Much in advance
Gail
 

despritfreya

LoanSafe Member
Sep 8, 2011
369
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If this JDB is demanding money then it may very will be violating the discharge injunction. However, if it is the holder of the beneficial interest in the 2nd position Deed of Trust or is the servicing agent for the holder, it has the right to begin the foreclosure process. The question is. . . will it? The answer may very well depend upon how much equity there is in the property over what is owed to the first. Do you know?

Des.
 

galenaz

LoanSafe Member
May 12, 2013
58
3
8
No I dont. I reread the thread over and over that I posted to figure out what it was saying. And that's what I figured out - if the current mortgage is MORE than the current value then if said company tried to foreclose GT would get all the money. I have a feeling based on the 1st loan amount and knowing their home that they are still underwater, maybe not by much, but still under water.

Here is the first paragraph of the assignment:
For good and valuable consideration the receipt and sufficiency of which is hereby acknowledged MERS as nominee for GMAC dba ditech.com it successors and assigns whose address is xxx does by these presents hereby convey grant bargain sell assign transfer set over and deliver unto Partners whose address is xxx the following described deed of trust (the "Deed of Trust"), together with the certain promissory note(s) described therein (the "Note(s)") together with all rights therein and thereto all liens created or secured thereby and any and all interest due thereon. Deed of trust is recorded in the State of AZ County of Maricopa.

It goes on to note deed number date and amount.
Is that a legit assignment?
 

galenaz

LoanSafe Member
May 12, 2013
58
3
8
OMG I just found the linkedin profile of the person they were suppose to contact.

Here is his summary:
Partners for Payment Relief is an awesome opportunity to benefit from this economy.... As a homeowner, PPR can help you get out from under too much debt and as an investor, PPR can show tremendous returns....

Partners for Payment Relief, LLC (PPR) was established in October 2007 for the purpose of acquiring second lien residential mortgage notes at a discounted purchase price. The model is to purchase a bank's “toxic assets”, contact the homeowner and to investigate the reasons for their financial hardship, then create a long term affordable plan that enables the borrower to get back on his or her feet. Our mission is to “provide creative financial solutions to homeowners through non-traditional methods.” PPR is able to achieve this mission by sharing the mortgage purchase price discount with the homeowner and crafting unique workout plans with a clear exit strategy."

Prior to this self employment gig he was a guitar instructor and a pro softball player - UGH
 

despritfreya

LoanSafe Member
Sep 8, 2011
369
53
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"if the current mortgage is MORE than the current value then if said company tried to foreclose GT would get all the money."

This is where you and many others are wrong. A junior lien holder, unless there is some specific state law that requires otherwise, simply takes the property subject to any senior liens. It does not need to pay off a senior lender, it just needs to service the loan so that the senior does not foreclose. Typically, the thought of having to service a senior lien holder, especially when there is no equity in the property after consideration of the senior, is enough to stop a junior from following through with its threat but. . . that is no guarantee.

"Here is the first paragraph of the assignment: For good and valuable consideration. . Is that a legit assignment? "

In Arizona. . . yes.

"Partners for Payment Relief, LLC (PPR) was established in October 2007 for the purpose of acquiring second lien residential mortgage notes at a discounted purchase price. The model is to purchase a bank's “toxic assets”, contact the homeowner and to investigate the reasons for their financial hardship, then create a long term affordable plan that enables the borrower to get back on his or her feet."

Sounds too good to be true. My guess is PPR is a typical junk debt buyer and is going to strong arm payment. Remember, the underlying debt was discharged. Unless PPR is willing to release that 2nd for little to no $$ (assuming no equity over the first) its true colors will be shown. Also, tell your friend NOT TO sign a new loan as such may take it out of the bk protection.

Des.
 

galenaz

LoanSafe Member
May 12, 2013
58
3
8
Got it thanks Despritfreya.

I did find out her current amount due on 1st is 179K according to zillow (i know the lack of accuracy) the value is over $200K. Her lawyer already advised an appraisal and I am backing that up.

I will email your comments to her.

Poor thing. Her husband has been getting these letters for over a month and thought they were in the clear. Only now, while he is away, did she open one and contact the lawyer and her handy dandy research asst (me :)) to look into this.

If I have any more questions I will post back here
 

despritfreya

LoanSafe Member
Sep 8, 2011
369
53
28
Unfortunately, with equity over the 1st a Chapter 13 won't help, except for its "cure & maintain" aspect. Hopefully your friend can negotiate some sort of cash buy-out.

Best of luck to her.

Des.
 

spike9999

LoanSafe Member
May 28, 2014
186
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Gail- I will highly caution you - that I am very much a novice with this so please understand that as I am trying to figure out some of this on my own. But I would have your friends bring this up to their attorney.


From what I can tell there MIGHT be a statue of limitations on foreclosures- see ARS Section 33-816/Section 12-548 is telling me that they have to foreclose within the contract Statue of Limitations (sol)- which in AZ is six years on written contracts. I guess the big question is, what is considered the date of default? Or is it more about date of deficiency-which I have seen some say. I guess it might vary by state or at times how a court interprets it. Also how does a BK affect this date- I have no idea. You didn't mention when they stopped paying their second and when it went in to default which might be less then the SOL. If this is true with the SOL- I don't think the lien goes away- they would just have nothing to enforce it with.

I know what you read and what happens in the real court world isn't always the same. But I also think there isn't a lot of test cases of recent with the SOL because this isn't something that occurred ever before with this amount of people with mortgages. I don't think its uncommon for JDB's to scare you and make you think you have to pay them. That is what they do.... they are bottom feeders in my book. JBD's will lie and pursue a debt even though there is nothing legally they can do with the debt. From what I can tell- they threaten to foreclose and get the owners to "rent to own"? So they spend- what 5-7g to become landlords of property and make 1200-2400 a year on their investment? Nice 20-40 percent return on an investment...without much work

I tried to find some case law, but didn't have much success. I located a few SOL issues, but they were complicated with partial payments and other issues. But that may answer their questions if they can find a similar case in court.

Few other things- I have no knowlege or dealings with this company Partners. But out of curisity I just looked them up and I don't show them as being a registered corporation in AZ. Kind of a red flag in my book. Maybe they are a DBA- so might need to double check that. I wonder if they are registered to collect debt in AZ? If not and they are trying to pursue the debt-then maybe they would be guilty of class 1 misdemeanor for trying to collect on a debt and not being registered.

I also did check Maricopa County Superior Court for you on this company. I find two lawsuits- one appears to be a forcible detainer where I guess they are trying to kick someone out of the house (not sure if they are owners or renters), the other they are being sued for an unknown action.


Anyway- let us know what happens. Best of luck to your friends.
 

spike9999

LoanSafe Member
May 28, 2014
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one more thing Gail- I search Maricopa County recorders and it looks like Partners has been around since 2012. They grab up a few here and there- they only tried to foreclose on one in Maricopa that I could find and its 2014. However, it looks like they hired an attorney and they have stopped it and they are alleging illegal foreclosure and business practices. Not sure where this case is going. Okay- time for me to enjoy my day ;)
 

galenaz

LoanSafe Member
May 12, 2013
58
3
8
spike thank you for the info. I didnt even think to check the court website.

More info for people in the future on this company - Partners for Payment Relief - herein referred to as PPR

Looks like PPR buys the note, gets an assignment for the deed from the bank then PPR assigns a sub-trustee which is MTC Financial dba Trustee Corps as the deed holder. Trustee Corps then submits paperwork for the trustee sale. Once the home is foreclosed on Trustees signs the house back over to PPR.

So far I see 3 foreclosures in 2014 that have Trustee Corp and Partners on the docs. Basically Trustee Corp is giving the property back to Partners - OMG. Not sure if these other people had bankruptcy's or not.

There is one person I spoke to today in AZ that actually submitted an adversarial complaint to the bankruptcy courts against PPR. He is in a very similar situation as my friend - Chap 7 few years back, discharged second mortgage with the same bank. There is a notice of trustee sale recorded but because he also filed chapter 13 the sale is on hold while the complaint works it's way thru.

Still trying to figure out ideas for a course of action. Her lawyer is thinking loan mod to pay these JDB - PPR - off.

As a side note they were current on their second mortgage when they filed chap 7.

Ill keep you updated - I have a feeling more people may look for this info in the future
 

despritfreya

LoanSafe Member
Sep 8, 2011
369
53
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There is one person I spoke to today in AZ that actually submitted an adversarial complaint to the bankruptcy courts against PPR. He is in a very similar situation as my friend - Chap 7 few years back, discharged second mortgage with the same bank. There is a notice of trustee sale recorded but because he also filed chapter 13 the sale is on hold while the complaint works it's way thru.
I stopped reading the complaint filed in that case you referenced after about the second page. Maybe I will read it through when I have time.

If you talk to the debtor/plaintiff, you might want to tell him/her that he/she has the wrong judge for such matters and the pleading will not be well taken. I recommend he/she find a good attny to get him/her out of the hole he/she is digging before it gets too deep. I recommend he/she start at the "self help center" located on the 6th floor of the courthouse.

Des
 

spike9999

LoanSafe Member
May 28, 2014
186
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I stopped reading the complaint filed in that case you referenced after about the second page. Maybe I will read it through when I have time.

If you talk to the debtor/plaintiff, you might want to tell him/her that he/she has the wrong judge for such matters and the pleading will not be well taken. I recommend he/she find a good attny to get him/her out of the hole he/she is digging before it gets too deep. I recommend he/she start at the "self help center" located on the 6th floor of the courthouse.

Des
Boy I learned the lesson the hard way in court with a simple error........
 

galenaz

LoanSafe Member
May 12, 2013
58
3
8
I stopped reading the complaint filed in that case you referenced after about the second page. Maybe I will read it through when I have time.

If you talk to the debtor/plaintiff, you might want to tell him/her that he/she has the wrong judge for such matters and the pleading will not be well taken. I recommend he/she find a good attny to get him/her out of the hole he/she is digging before it gets too deep. I recommend he/she start at the "self help center" located on the 6th floor of the courthouse.

Des
Des how did you see the documents? Looks like you need an account and need to be a business (lawyer?) to see them.
 

despritfreya

LoanSafe Member
Sep 8, 2011
369
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Des how did you see the documents? Looks like you need an account and need to be a business (lawyer?) to see them.
Have a PACER account and just did a search based upon the creditor's name. While I am an attny, you do not need to be one to sign up. But. . . there is a fee to pull up info. Go to www.pacer.gov for more info.
Des.
 

galenaz

LoanSafe Member
May 12, 2013
58
3
8
one more thing Gail- I search Maricopa County recorders and it looks like Partners has been around since 2012. They grab up a few here and there- they only tried to foreclose on one in Maricopa that I could find and its 2014. However, it looks like they hired an attorney and they have stopped it and they are alleging illegal foreclosure and business practices. Not sure where this case is going. Okay- time for me to enjoy my day ;)
Spike where did you see they only tried to foreclose on one in Maricopa? I saw several trustee sale notices but they were from Trustee Corps. PPR assigns the deed to Trustee and Trustee starts the foreclosure. And I see 3 trust deeds from this year. Doesn't that mean the house foreclosed?
Also where did you see a lawyer hired? Was that the Lis Pend doc? If so that is the person I mentioned above that Des commented on.

Still looking for ammo.

Thanks
 

spike9999

LoanSafe Member
May 28, 2014
186
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Gail- Trustee has a bunch of sales- but I didn't see many for PPR. If you search the recorder in Maricopa - just search for the PPR and you will see what they are up to. Please understand I am busy with work and such- so I may have missed something. I do see many assignment of deeds of trust. And then I see a few where they issued a sub trust to what I would perceive as a foreclosure down the road. But yes- you need to follow the deeds- once you ID the property- run the owners names and see if there was a notice of sale and such. Best thing is go to Pacer and read some of the cases with PPR. I am pretty sure I saw one that was still in process but maybe I was wrong. go to case 2:10-bk-17705-RHJ Alvarez vs PPR read his initial filing. Looks like he even found youtube videos of these guys and their mindset. "

  • C. The Business Practices of PPR and Its Affiliates.
    10. PPR' s business consists largely of purchasing in bulk from institutions portfolios
    of what PPR describes as "non-performing second mortgages" and attempting to tum them into
    "performing assets," meaning that the homeowner has agreed to resume payments under a
    written workout agreement. If the homeowner makes payments for at least 12 months, PPR will
    typically seek to sell the promissory note to individual investors as a "performing note."
    According to articles and recorded statements by Van Horn, where the first mortgage is greater
    than the value of the property (an "upside down" or "underwater" mortgage) and the homeowner
    has quit making payments on the second, PPR is able to purchase the notes at discounts as low as
    two or three cents on the dollar. The reason that PPR focuses on second mortgages, according to
    Van Hom, is that the cost is so low that it is not necessary that PPR make a profit on every note
    it purchases. Thus, if PPR can obtain the face value on only a portion of those notes it purchases
    its returns will be substantial.
  • 14. To implement its practices, PPR employs a number of"workout specialists," each
    of whom is assigned a portfolio of "non-performing notes" to manage. The workout specialists
    follow a series of specific steps outlined by Van Hom: (a) a "mail campaign," which consists of
    a series of increasingly coercive letters notifying the homeowner that PPR (or DE II) has
    acquired the note, asking the homeowner to make back payments and explaining that PPR (or
    DE II) will implement foreclosure proceedings if PPR (or DE II) cannot reach an agreement with
    the homeowner on repayment; (b) a "phone campaign," in which "[w]e usually call every 2 to 3
    days" to persuade the homeowner that PPR (or DE II) will implement a foreclosure if the
    homeowner does not agree to terms; (c) if the workout specialist is unable to contact the
    homeowner by phone, a "door knock service" in which a private investigator goes to the home,
    knocks on the door and "hands them a cell phone with PPR's asset manager on the other line,"
    something that Van Hom states is "pretty big psychologically" in showing that PPR is serious
    about its threats; and (d) a "legal campaign," which the workout specialist is supposed to initiate
    16 days after the initial letter to the homeowner.
    15. The "legal campaign" is also coordinated by the assigned PPR workout specialist.
    It begins with contacting an attorney from one of the 40 law firms that PPR uses throughout the
    country and "having the attorney send out a Demand Letter," something done "PRIOR to
    sending in a retainer [to the attorney] because the demand letter itself can oftentimes be enough
    for the borrower to respond." Van Hom states:
    One of the biggest misconceptions about second mortgages is foreclosure, if it can
    be done, when it can be done, and what happens once it is completed. Foreclosing
    from the position of a second mortgage or foreclosing from ANY secured lien
    position for that matter is totally possible .... It's nothing short of amazing
    sometimes that homeowners are adamant that as long as they're paying their first
    mortgage that they can't lose their home to foreclosure. Nothing could be further
    from the truth. Once the legal process gets moving they usually start to realize
    that yes they can in fact lose their home to a junior-lien holder. This is why
    starting the foreclosure process is so important because even though our model is
    focused on keeping homeowners in their homes, foreclosure is a great tool when it
    comes to giving borrowers a wake-up call.
    16. If the demand letter threatening foreclosure does not produce a workout
    agreement within 30 days, the workout specialist will instruct the attorney to "go to the
    courthouse to file in public record for foreclosure." The purpose of initiating foreclosing on a
    home in which the second mortgage has no value is to create psychological and economic
    pressure on the homeowner to agree to PPR's terms or face eviction from their home and, in
    many cases, the inability even to rent. As Van Hom explains, "setting a foreclosure sale date and
    having a notice for the hearing and the notice of sale date are both triggers for borrowers to
    realize foreclosure will happen without a dialogue with the current note owner" and "[p ]utting a
 

spike9999

LoanSafe Member
May 28, 2014
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so basically they paid about 1700 for this note and they are going to squeeze them for every bit of the 85g. One business I could never be a part of............ Why the 2nd could not have given your friends the offer of 1700 is beyond me and must only be about revenge and punishment for being a bad debtor.
 
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galenaz

LoanSafe Member
May 12, 2013
58
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Thanks Spike - I have followed the deeds and then looked the properties up online and they show as foreclosed.

Alvarez is the person I mentioned a few posts above.

I submitted for a Pacer account just waiting for them to turn it on.