Comment

Comment by Rob McGarry on April 26, 2010 at 2:30pm

Julia, what Jason was describing is how a bank collects on a deficiency balance. There's nothing illegal about that. The problem was that he didn't negotiate debt relief into the short sale. If it's a recourse loan, the bank still has the right to pursue the balance after closing unless you get something in writing that says the loan is "paid in full" or "settled in full."

Comment by Julia Huntsman, 562-896-2609 on April 26, 2010 at 2:17pm

I was responding to Jason Glee's remark, "2nd came after me 3 days after closing with the phone call "so how would you like to settle the remianing debt"......"

Comment by Rob McGarry on April 26, 2010 at 1:57pm

Jason,

Before you continue your rant and cause more malfunctions with your inadequate spell checking software, here is the verbiage from the supplemental letter I received on a recent CLOSED short sale with Ocwen:

"The loan will be considered, and reported to the credit reporting agencies, as “Paid in full for less than the full balance.” A 1099-C form will be mailed to [borrower] for the cancellation of debt."

Just because YOU can't make it happen, doesn't mean it can't be done. And I DO want people reading this and believing that it can be done. I KNOW it can be done because I did it.

Comment by Julia Huntsman, 562-896-2609 on April 26, 2010 at 1:10pm

We've been cautioned that any money paid to 2nd outside of escrow is fraud on the 1st, so the 2nd coming back post-close would seem to fit in that category. We've been advised to report them for fraud, hope you do the same.

Comment by Jason Glee on April 26, 2010 at 12:23pm

Rob,
So are you saying you received the letter aof approval and a seperate letter that specifically states the account is paid in full ?? I have a hard time believing that, Ocwen and other banks are simply saying nope...take this very grey letter and thats all you get..else go ahead foreclose...and we'll sue your ass and geta deficiancy judgement...then its wage garnish and lien on your new house time...I just don't want people reading this to get their hopes on your comment that with grit and determintaion somehow you got this full release letter...no way..

Comment by Rob McGarry on April 26, 2010 at 10:43am

Jason and Christian,

Ocwen WILL report loans as paid, but you have to get to the right person to achieve this. The office of the Ombudsman will issue you a letter that is supplemental to the Discount Payoff Agreement and Release of Claims, but nobody will change that letter. The letter is intended to make it look like the bank is releasing the borrower, while in actuality, it specifically does the opposite! Even with the Ombudsman, you have to get one of the reps to send you over there, and the only way I made it through the gatekeeper was explaining that I was acting on the specific advice of my client's attorney.

Jason, as to your comment about CA residents not having to worry about recourse, that is only true on purchase money. Otherwise, our borrowers need the protection just like everyone else.

The important thing is to stay on top of these guys and stress your unwillingness to back down. Their negotiators will tell you over and over that the bank won't pursue the deficiency, but it's not likely to be the case. There is way too much money at stake and too many sellers signing off on documents that they shouldn't.

As another tip for those of you pursuing short sales with two recourse (non-purchase money) loans, try to negotiate a settlement on the 2nd before you even attempt the short sale. It removes a level of complication with having two lenders and it gives the borrower the leverage to let it go to foreclosure if the bank doesn't negotiate on recourse.

Comment by Jason Glee on April 26, 2010 at 7:08am

as a side note, I too had to wait 3 or so months on approval turn around...its certainly better to short then foreclose...even if lender looks for deficiancy....saves 1/2 the damage to credit...did Ocwen get more then 85% of their 1st note on the sale ? Was there a seperate approval letter for the 2nd note, even though it was same lender ?
In my opnion, clients only option is to sign and hope for the 1099....Ocwen wont change their template to get a 'Paid in Full' statement. Then deal with deficiancy call if they get one...barter down...or if way to much $$.... look BK 7 or 13....you can't reject approval..doesn't make sense unless in non recourse state..else they just foreclose and then your client most certainly will get a deficiancy judgement (judgement meaning the court gave this one) against them...thats a lot uglier then the 'possibility' of a another negotiation later down the road for a simple unsecured collection attempt from either Ocwen or some collection aganecy they might sell it to for 10 cents on the dollar,.

Comment by Jason Glee on April 26, 2010 at 6:55am

Hello Christian, I'm looking at the exact same verbage on my approval letter, I filled that line in with a zero, as a way of saying I did not consent to a promisary note, as your client should do as well, but the last paragraph..on form does not state account 'paid' , so although letter gives the feel of a done deal, there is not exact language to say that they will not look for deficiancy, I am waiting to see if a get a 1099 by end of year...to your point I had a 2nd - Green Tree - who clearly stated they 'reserved the right to seek deficiancy' and did 3 days later...Ocwen is just missing language that says client is completely off hook...purposely ambigous ? I think so..leaves door open for them to come a calling..which in my state has no staue of limitations..my only indicator that they wrote off the loss is a 1099..please let me know if your client immediately gets a 1099 or whether they just sit waiting/hoping for a 1099.

Comment by Christian Medina on April 26, 2010 at 3:28am

Hello Jason,
I have been dealing with Ocwen for 4 months and just this past Friday they sent me an approval (Discount Payoff Agreement and Release Of Claims) regarding both mortgages (1st and 2nd with Ocwen). The second to recieve $1 and the first to receive the rest. There are 11 items that are requested from Ocwen, but one stands out for me. Item 10. (Optional) You (i.e., the Borrowers shown above) have/has agreed to sign a promissory note in the amount of $__________, the full amount of which shall be applied to reduce any defiency balance you owe Ocwen on your home loan account. The original of this promissory note must be sent to us along with the payoff funds.
I believe because it says"Optional" my clients will not pay anything. What are your thoughs?

Comment by Jason Glee on April 26, 2010 at 2:36am

I just went through short sale, Ocwen 1st, Green Tree 2nd. OK here's the current state and nobody whine about how they dont go after deficiancies..Both lenders approved..lien only ! No longer do banks give a "paid in full" they bust out lien from note...appprove the lien release, close, then pursue deficiancy after close. Ocwen, by the way, approved 6% dealer commis...only kicked 1% to 2nd lender. 2nd came after me 3 days after closing with the phone call "so how would you like to settle the remianing debt"......even though they got 10% of loan to release lien..they still want at least another 25% to release note...at that point they will have a total of 35% of their note..and will then issue a 1099 for the remaining 65%...which most borrowers can either claim insolvency or primary res for last 2 of 5 years and get out of tax implication. But despite all the stories about getting an immediate 1099 just by closing a short sale...that ship has sailed..maybe how it was done 2 years ago before banks have screws put them to collect. You will not get anywhere trying to get either Ocwen or Green tree to change their approval letter language...although and this maybe a key piece I now know....pre-closing you can negotiate with 2nd like green tree to give a "paid for less then owed" if you buck up and pay more then what they ask to release lien. So say they will release lien for 10%...know they'll want at least 25 cents on the dollar post-close...and just to head that off at the pass, I suggest offer say 20% total..pre-close...for a "paid-less then owed" you're borrower will not want to pay this and will want "paid in full"...1) they are never gonna get "paid in full", and unless they're committed to filing bankuptsy after the close to get out of deficiancy its better to pay pre-close and save 15%..this of course does not apply at all to CA and any otherr non-recourse states...you guys get a complete free ride....

• ‹ Previous
• 1
• …
• 37
• 38
• 39
• 40
• 41
• …
• 43
• Next ›
• Page