On Ounce of Prevention....May Save Your Sellers Some $$$$
Different states have different laws....each of us as short sale listing agents have different experiences....and I do not mean to imply this to be a situation that is always and everywhere...it is here...and "May come to your market soon." As soon as we take a short sale listing...if the seller(s) have any sort of accounts in the same bank that holds their mortgage....we have them switch banks. Lenders here, have emptied these accounts that were savings for moving expenses, security deposits, etc. They can....it is legal....and they can choose to apply or not apply it as they see fit to "expenses", interest, etc. While this may not be a practice where you practice currently....better safe than sorry. Sally K. & David L. Hanson , CDPE - Wisconsin
Replies to This Discussion
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Permalink Reply by Wendy Rulnick on -
Sally and David - Thank you for posting! This is something I have not run into YET in Florida... scary.
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Permalink Reply by Sally K. & David L. Hanson on
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The "money in the mattress" is the best place for it until after closing...or it may disappear somewhere else !
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Permalink Reply by Bryant Tutas on -
That's incredible that the bank can legally do this. I could understand making it a condition of the approval but to just take it is just wrong. Thanks for the heads up.
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Unfortunately in Wisconsin it is very legal....and to keep it from harming sellers in your state, have them empty the accounts immediately when you take the listing....as Shorts become more "popular", lenders get more creative....and desperate.
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Permalink Reply by Darla Maddalone on -
As a new member of Short Sale Superstars and just reading your post...what will banks think of/or do next? This is excellent information.
Thank you Sally and David
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We can't say this will happen everywhere....but you aren't likely to get a "heads up" from the lender when it does ! Soooo....pack that cookie and mattress and have a great new year !
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Permalink Reply by Wendy Rulnick on
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Well, well, well!! BANK OF AMERICA has now removed money from one of my sellers accounts in FLORIDA!!! THIS IS DARN FRIGHTENING!!!
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Have every seller use the mattress and money orders until the smoke clears...closing is done....deficiency guaranteed to be released....Trust...lender....never use the two words in the same sentence.
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Permalink Reply by Katerina Gasset on
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Florida is an asset protection state. There are many asset protections available to Florida residents. Bear in mind, that asset protection does not apply to people who buy second homes here but are not residents, like snowbirds. You must claim your homestead in Florida to get asset protection.
I am not an attorney and I am only speaking based on what our clients' attorneys tell us as well as what I have experienced during and after a nasty divorce. My attorney told me that in Florida the banks who hold mortgages, because Florida is a deed state, not trust deed state have to physically take your house away from you through a judge's order. After the foreclosure, or after a failure to pay a promissory note, the lenders can seek a judgment against you in court if you don't have a fully satisfied paid in full no deficiency agreement in your short sale acceptance letter.
After they get a judgment they seek to collect.
Collection law in Florida does allow for different collection methods. We don't have state income tax so they can't get your tax return money from the state like they can in CA.
Collection laws protect the head of household who earns the money for his or her family.
In Florida, they can not get the bread earners money. But they can go after the non bread earners money but only a portion of it. But they can make a mistake.
That happened to me. On a bad credit card my x stole and did not pay, he forged my name, I did not pay it. They got an order to garnish my bank account. My attorney told me they did this illegally. So I went to court, and the judge dismissed their case, punished them by not allowing them to seek to collect from me and ordered the bank to release my money. I was the single parent with custody at that time.
So mistakes can happen. I tell everyone the same thing.
Since Florida is not a community property state and many times only one spouse is on the mortgage note- they can put the money in the account of the one who is NOT on the mortgage. You can NOT go after both spouses in Florida unless both are on the note.
Remember Florida agents- The only people who can attach liens on a person's homestead are:
The IRS, The state property tax dept, the mortgage company, HOAs and mechanic liens. Those are also the only entities that can foreclose on a property that is a homestead property in Florida. That is highly unlikely to change, we have too many people with money who come to live in Florida for the asset protection.
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Permalink Reply by Wendy Rulnick on
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Sally, Clarifying this seller has missed payments, not had a foreclosure or deficiency judgment.
Wendy Rulnick said:Well, well, well!! BANK OF AMERICA has now removed money from one of my sellers accounts in FLORIDA!!! THIS IS DARN FRIGHTENING!!!
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Permalink Reply by Wendy Rulnick on
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Katerina, I'll post back if my seller finds out this was a mistake. He is checking into it.
Katerina Gasset said:Florida is an asset protection state. There are many asset protections available to Florida residents. Bear in mind, that asset protection does not apply to people who buy second homes here but are not residents, like snowbirds. You must claim your homestead in Florida to get asset protection.
I am not an attorney and I am only speaking based on what our clients' attorneys tell us as well as what I have experienced during and after a nasty divorce. My attorney told me that in Florida the banks who hold mortgages, because Florida is a deed state, not trust deed state have to physically take your house away from you through a judge's order. After the foreclosure, or after a failure to pay a promissory note, the lenders can seek a judgment against you in court if you don't have a fully satisfied paid in full no deficiency agreement in your short sale acceptance letter.
After they get a judgment they seek to collect.
Collection law in Florida does allow for different collection methods. We don't have state income tax so they can't get your tax return money from the state like they can in CA.
Collection laws protect the head of household who earns the money for his or her family.
In Florida, they can not get the bread earners money. But they can go after the non bread earners money but only a portion of it. But they can make a mistake.
That happened to me. On a bad credit card my x stole and did not pay, he forged my name, I did not pay it. They got an order to garnish my bank account. My attorney told me they did this illegally. So I went to court, and the judge dismissed their case, punished them by not allowing them to seek to collect from me and ordered the bank to release my money. I was the single parent with custody at that time.
So mistakes can happen. I tell everyone the same thing.
Since Florida is not a community property state and many times only one spouse is on the mortgage note- they can put the money in the account of the one who is NOT on the mortgage. You can NOT go after both spouses in Florida unless both are on the note.
Remember Florida agents- The only people who can attach liens on a person's homestead are:
The IRS, The state property tax dept, the mortgage company, HOAs and mechanic liens. Those are also the only entities that can foreclose on a property that is a homestead property in Florida. That is highly unlikely to change, we have too many people with money who come to live in Florida for the asset protection.
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Since this is not a Florida only site....and none of us are lawyers....and even if a Big National bank were wrong...taking the time and money to fight them in court when you can't pay a mortgage...hmmmm...Better safe than sorry.....Too many yes but ifs....
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