I just saw this posted on the CDPE forums.
“Account is a claim-transferred from Radian to Franklin Credit Management collection. The claim represent the amount we are entitled to recover from you on the mortgage insurance claim Radian paid to your lender due to your default on your mortgage loan”…. In the amount of $14,918.02"
Supposedly the seller received this 18 months after doing a short sale. Thoughts?
This isn't California unless it was long before the Debt. Forgiveness laws? What state Bryant? Florida?
I doubt that the contract between Insurer and Investor prohibits the Insurer from assigning their rights. So, the right to collect is an asset of the Company. I would not expect the MI to discard assets without compensation. As with any company, they have a commitment to return value to their owners. Discarding assets isn't generally done.
As the MIs move towards BK, the right to collect will be sold. Inevitable, expected, and reasonable, I think.
Gotta settle, with the explicit waiver in the demand. Do no rely on a 1099C, in the absence of the waiver. If you do, maintain your professional liability policy, I think.
Ug...I THINK I'm following this. Bryant what if the lender put on MI without the homeowner's knowledge? Does the homeowner actually have some sort of contract with the MI company? Looks like I may need to add a new disclosure to my paperwork. This is kinda scary.
I think, in general the policies we are talking about here are "portfolio policies" between Insurer and the Investor, purchased by the originator prior to securtization (ala CountryWide), or purchased by the Investor.
The Investor is the Insured. The debtor/homeowner is not party to the agreement. The Insurer inherits the rights of the Investor. Hence, if the Investor "waives rights to pursue", the Insurer's rights vanish too. But, that means the Insurer controls.
Absent a waiver in the demand/approval, I would think that the Insurer has the right to pursue and the right to assign, meaning "sell" to a collector.
The salvage parties trolling over the remains of a bankrupt MI Company will seek every opportunity to secure a return. Gotta happen, I think.
Becuase you are a GREAT agent and doing proper follow ups with your clients for referrals ;-)
I would suggest one of two courses of action:
1) ignore the letters - 9 times ou tof 10 they will only get one or two letters, then, they will never hear from them again (again, MOST of these letters are designed to "spook" the seller into calling and negotiating some type of payoff)
If they get REALLY pushy (phone calls), send them a "Cease and Desist Letter", you can e-mail me at [email protected] for the one we use.....it also works DURING the short sale if your client is getting obnoxious phone calls about collections. Giving your client this letter also sets you apart from the crowd during your listing appointment)
2) If the seller wants to call and work something out, just like with the short sale, a credit card, or ANY other potential lien issues, NEGOTAITE NEGOTIATE NEGOTIATE......
9 times out of 10 the deficiency lien rights were purchased for MAYBE 1% - 5% of what is actually owed, i.e., a $100k deficiency lien is most often pruchased for $1000 - $5000, so, offering them 6% - 10% of what is owed will get accepted almost every time). The REALLY good thing about htis, your selelr can work out something, and sleep well a night knowing this issue is resolved and can not pop up in the future.
Like a short sale, it is always case by case, and, you just need to know how to "play the negotiations game"....too much to go into on hear.
You can e-mail or call me if you or your client wants to talk.....best of luck to you and everyone here!!!
If the approval letter was a full release, tell them to pound sand. If not, then negotiate. They probably bought that note for .10 on the dollar.