Debt Validation Notice

Fred

LoanSafe Member
Aug 27, 2014
24
0
1
46
B OF A First $125,000 and Current 970 per month P and I
B of A HELOC: No payment for 24 months. Payment is 1350 per month
Taxes and Insurance current

I have not been in contact with the bank. They have periodically left messages for me to call them and I have not returned the call.

Received at Debt Validation Notice last week for the HELOC. $171,655 due. We cannot come up with that kind of money. I was surprised the notice was in my standard mail. Did not come certified or requiring a signature.

Home is worth approx $265,000 and needs a lot of repairs and maintenance.

After the 30 debt validation period ends does the bank automatically put the home in the 90 day foreclosure period?

Does this mean that we have 120 days to move if we cannot come up with the money?

Fred
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,854
467
1,000
49
Southern California
www.loansafe.org
Hello Fred,

Basically they are sending this to you to validate that the debt is legitimate. You can either respond or not respond. Most people simply ignore the letter.

This does not mean that you are in foreclosure or the process has started. That would be a notice of default and would have to come certified mail or be posted on your property. I would say they are just fishing for information and testing the debt collection waters with you.
 

Fred

LoanSafe Member
Aug 27, 2014
24
0
1
46
Home value is approx 250,000 first 125,000 and second at 171,655 = total debt of 296,655 so a deficit of approx $46,655
If I continue to delay dialogue with the bank, In your experience, what action do you think I should expect next from the bank?
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,854
467
1,000
49
Southern California
www.loansafe.org
The HELOC is in 2nd position and would need to buy the first out to foreclose and spend another approximately $50,000 plus to foreclose and resale the home. They would lose around a $100k or more by doing so.

I personally do not think they will foreclose, but may charge off the loan so they can write it off on their taxes and then go after your personally for the debt. The lien would remain on the property and the debt would then be attached to you personally.
 

Fred

LoanSafe Member
Aug 27, 2014
24
0
1
46
The HELOC is in 2nd position and would need to buy the first out to foreclose and spend another approximately $50,000 plus to foreclose and resale the home. They would lose around a $100k or more by doing so.

I personally do not think they will foreclose, but may charge off the loan so they can write it off on their taxes and then go after your personally for the debt. The lien would remain on the property and the debt would then be attached to you personally.

Thank you for your insights Maurice. Much appreciated!!