United Guaranty wants money on a house I don't even own anymore

RichardRoe

LoanSafe Member
May 11, 2013
9
1
3
Hello all!

First time poster; here is the short version of my story. I can post more background if it is needed.

My (now) ex and I bought a house in Oklahoma with a loan from BofA. After a couple of years, we also got a home equity line of credit on that same house from BofA. After several more years, we split up and I moved out (to another state). My ex refinanced the house in Oklahoma, so the house and first mortgage was totally in my ex's name. The HELOC was still in both our names.

My ex later passed away, and after that, I did not make any payments on the HELOC. I believe the house in Oklahoma went into foreclosure after my ex died, but I am not sure of that. Now, United Guaranty, the insurer of the HELOC, has paid off the HELOC to BofA and is coming after me for the money; United Guaranty just sent me a letter, at my current residence, explaining this.

So what I think I have is an attempt to collect on a 2nd mortgage that was originally secured by a house that I don't have any title to or interest in anymore.

I have read the leadoff posts in the "Strategy for Settling your 2nd" and "Sold Out Junior Loans" threads, and some of the other posts in those threads.

When we both lived in the house, we were never upside down on it, or behind on the first mortgage payments. We never asked for or got a loan modification. Neither of us has filed for bankruptcy. (I just mention these because it seems that these things are semi-common here, and it seems like it might make a difference to the answers.)

My questions:

Should I respond to United Guaranty in any way?
(Per the "Strategy for Settling your 2nd" thread, I think the answer to this is "no").

If the house in Oklahoma has been foreclosed on, I think that makes the home equity line on that house a sold-out junior loan. Is this correct?

If the house in Oklahoma hasn't been foreclosed on yet, then I think the home equity line on that house is still a secured junior loan. But it's secured by the equity in that house, right? Do they have a leg to stand on in coming after me?

What state's statue of limitations applies, here? I think it is Oklahoma, because that's the location of the house that originally had the home equity line on it. But since I moved to another state, is there a chance that my current state's laws apply?

Thanks for your help!
 

Cat Damiano

Mortgage Wars
Sep 10, 2007
10,541
39
48
Colorado
www.loansafe.org
Hello all!

First time poster; here is the short version of my story. I can post more background if it is needed.

My (now) ex and I bought a house in Oklahoma with a loan from BofA. After a couple of years, we also got a home equity line of credit on that same house from BofA. After several more years, we split up and I moved out (to another state). My ex refinanced the house in Oklahoma, so the house and first mortgage was totally in my ex's name. The HELOC was still in both our names.

My ex later passed away, and after that, I did not make any payments on the HELOC. I believe the house in Oklahoma went into foreclosure after my ex died, but I am not sure of that. Now, United Guaranty, the insurer of the HELOC, has paid off the HELOC to BofA and is coming after me for the money; United Guaranty just sent me a letter, at my current residence, explaining this.

So what I think I have is an attempt to collect on a 2nd mortgage that was originally secured by a house that I don't have any title to or interest in anymore.

I have read the leadoff posts in the "Strategy for Settling your 2nd" and "Sold Out Junior Loans" threads, and some of the other posts in those threads.

When we both lived in the house, we were never upside down on it, or behind on the first mortgage payments. We never asked for or got a loan modification. Neither of us has filed for bankruptcy. (I just mention these because it seems that these things are semi-common here, and it seems like it might make a difference to the answers.)

My questions:

Should I respond to United Guaranty in any way?
(Per the "Strategy for Settling your 2nd" thread, I think the answer to this is "no").

If the house in Oklahoma has been foreclosed on, I think that makes the home equity line on that house a sold-out junior loan. Is this correct?

If the house in Oklahoma hasn't been foreclosed on yet, then I think the home equity line on that house is still a secured junior loan. But it's secured by the equity in that house, right? Do they have a leg to stand on in coming after me?

What state's statue of limitations applies, here? I think it is Oklahoma, because that's the location of the house that originally had the home equity line on it. But since I moved to another state, is there a chance that my current state's laws apply?

Thanks for your help!
Welcome to the forum and thank you for joining.............

What you would need to do is to check if the property was in fact foreclosed on if so then the SOJL thread is the one that would pertain to your situation;

http://www.loansafe.org/forum/debt-settlement/40758-sold-out-junior-loans.html

Here is a list of the statute of limitations state by state, Oklahoma would apply to this situation;

State Statutes Of Limitations For Old Debts | Bankrate.com

In Oklahoma;

If a deficiency judgment is desired against a person, that person may have to be served personally. If a request for a deficiency is not made within ninety days after the sale, the sale is conclusively presumed to have been payment in full of the debt.

Kleinsmith & Associates - Oklahoma

You may want to consult with a Real Estate Foreclosure Attorney in Oklahoma to verify this information.
 

RichardRoe

LoanSafe Member
May 11, 2013
9
1
3
What you would need to do is to check if the property was in fact foreclosed on if so then the SOJL thread is the one that would pertain to your situation;
I just dug up the court proceedings and I am now pretty sure that the property has been foreclosed on. I will post further in the SOJL thread.

Thanks for your help!
 

Cat Damiano

Mortgage Wars
Sep 10, 2007
10,541
39
48
Colorado
www.loansafe.org
I just dug up the court proceedings and I am now pretty sure that the property has been foreclosed on. I will post further in the SOJL thread.

Thanks for your help!
At least that is a definitive starting point. Please keep posting your updates here in your thread as you go through the process so it can also help others that may be in a similar situation.
 

RichardRoe

LoanSafe Member
May 11, 2013
9
1
3
Minor update...

I only ever got the one letter from United Guaranty - the one in May 2013 that prompted this thread. I didn't hear anything else about it until recently, when United Guaranty gave up and sent it to collections; I got the initial letter from the collection agency. I won't say which one, but I did Google them, and based on other complaints, apparently they are one of the evil ones (threatening people with jail, etc). The collection agency recently had to change their name, which is some kind of clue.

Right now I plan to keep on ignoring them.

I also dug around a little to see if I can find a record of the house being sold since it was foreclosed on, and I can't. I don't think this really affects my situation; I was more curious than anything.

Thanks!
 

TomEason

LoanSafe Guide
Jun 18, 2009
12,390
84
48
SF Bay Area CA
RichardRoe

Thanks for your posts.

Since you never signed a contract with United Guaranty, you have no obligation to pay them anthything. The mortgage insurance contract was between United Guaranty and your HELOC lender.

If UG reported a derog in your credit file with the CRAs, I recommend you write UG demanding they correct the report per the provisions of the FCRA. If they don't correct it, pursuant to the provisions of the FCRA, you can report them to the FTC, and also sue them. Other than said letter, I wouldn't ever communicate with UG.

FYI, the applicable SOL is OK's. And yes, if the 1st has FCed, the 2nd (HELOC) is now a SOJL.
 

RichardRoe

LoanSafe Member
May 11, 2013
9
1
3
This thing won't die. :/

As noted above, I started hearing from a collection agency in October 2013. They bugged me off and on for a few months, but I never responded to them in any way. After around spring 2014, it all went quiet again... until last week.

I got a demand letter about this debt from a law firm. I Googled them and they apparently specialize in collections and suing people for old debts. They aren't suing me (yet); I've just gotten one letter from them so far, demanding that I pay.

Is the right action to keep ignoring it?

I suspect (but don't know for sure) that if I don't respond to the demand letter, this law firm will sue me... that seems to be their main line of business. Obviously, if I get sued, I have to respond in some way. I was just curious if I should do anything before that happens.

Some other background information: The house that was originally involved in this (the one with the HELOC) went through foreclosure - the initial filing was in spring 2012, and the foreclosure seems to have finally gone through in spring 2014, when the house was sold by the sheriff.

The payments on the HELOC would have stopped no later than mid-2011, but I suspect they stopped a little earlier than that, maybe up to a year.
 

RichardRoe

LoanSafe Member
May 11, 2013
9
1
3
Just posting here to finish the story.

I got a demand letter about this debt from a law firm.
That demand letter happened in March 2016. I retained an attorney to represent me shortly after I got it. After some back and forth between my attorney and that law firm over the summer of 2016, I was sued by that law firm and served in October 2016. The initial court date was in December 2016, but it was continued into early 2017. Before it went to a hearing, my attorney made a settlement offer to the firm that was suing me. They accepted, and I ended up paying about half of the amount they were suing for, in March 2017. I probably paid $1,000 or so in legal fees to my attorney, beyond the settlement I paid to the other party. So it's now settled.

According to my attorney, my fatal mistake was signing something I shouldn't have when my ex refinanced the house in 2009, which reset the clock on the statute of limitations. If I hadn't signed that one piece of paper, the clock would have started ticking when we originally took out the line of credit in 2000, and it would have been past the SOL by the time it went to collections. I remember wondering if it was a good idea when I was asked to sign it, and I now know should have stopped at that point and asked a lawyer. However, the allure of "if you sign here, all of this break-up stuff can be over" was strong, so I signed it.