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

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And Wendy...the people here who have had bank accounts disappear had missed as little as one payment...not in foreclosure either....
I knew that they could do this, and I'd like to say that I'm surprised that they would...but I can't. No compassion when there's a bottom line they are after.
We currently have some local yokel lenders trying to figure out what to do since they can't garnishee social security for deficiencies on 2nd liens....compassion and lender...not good words in the sentence !

Nathan Tutas said:
I knew that they could do this, and I'd like to say that I'm surprised that they would...but I can't. No compassion when there's a bottom line they are after.
HOLD YOUR HATS!

A client came in today and told me that Bank of America, on a 2nd mortgage equity line, brought his loan current by making - no TAKING - a cash advance on his credit card with the same bank!
That's a new variation....and a good alert.....! Mattress money is the only safety net until it's over....and I would think that if any sellers are charged with part of a deficiency, they need to find another banking institution as well.
Richard, How can this be legal?

Richard Zaretsky said:
HOLD YOUR HATS!

A client came in today and told me that Bank of America, on a 2nd mortgage equity line, brought his loan current by making - no TAKING - a cash advance on his credit card with the same bank!
Wow, Sally and David, great information. I haven't seen this YET here in Denver, but thanks for the heads up. I have put a notation in my pre-listing package to be sure to discuss this with my sellers, and get them moving toward emptying out any accounts with their lending bank. Great info!

Tracy Howard, CDPE
Keller Williams Realty Downtown
Denver, CO
And, then, since I did my posting a half hour ago, I just got a call from one of my sellers saying money has been removed from their bank account by the foreclosing lender. Here we go!
Whatever happened to the idea that a bank had a fiduciary duty to it's depositors?

If this is legal in any state, it should not be. It's not in mine....without a judgement.
Good post...Thanks!
I agree "better safe than sorry"...its a little too close for comfort to have $$$ in the same bank you are late or defaulting on.
Sylvia Finocchiaro, Certified Short Sale Negotiator - Scottsdale, Arizona
Great advice. Thank you will pass this along. Better safe then sorry.

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