second mortgage

I had friends who had a first with one bank and a second with B of A. B of A had agreed to the short sale and did not, at that time, request pay back. The owners received a letter regarding this deal.

The short sale went through almost a year later and the first bank auctioned off the house for less than a previous offer that had been on the table for 6 months prior to auction. The B of A offer had expired.

The owners were not living in the house, but the house was not abandoned eventhough they had moved to another state. Taxes, maintenance, and utilities were paid.

After the auction, the new owners moved in. Suddenly the B of A began taking mortgage payments from the original owners' bank account which was still in tact. After 2 withdrawals of mortgage payments, the original owners closed the account to prevent B of A from taking any more money.

The original owners have tried to clear up what is going on and ask for help. They have received no responses.

Are they still liable for the B of A mortgage as a lien?

Sorry Valorie, I was tired while I was typing and made a mistake. I meant to say fell through not went through.After 6 months of negotiations, the short sale was withdrawn before the offer was accepted by the bank. One of the buyers lost his job and they could not get the financing. Within months, the house was auctioned off for a lot less than the offer that sat on the table for over 6 months. The B of A was willing to go along with the short sale, but when the short sale failed and the first mortgage bank auctioned off the house, that left the B of A second mortgage unpaid. Now B of A is after the original owners who already lost the house to foreclosure and have no money. What do you think they should do?

Valorie Stover Quality Realtor said:

I don't understand one of your statements, "The short sale went through almost a year later and the bank auctioned off the house". The bank doesn't auction off a house, if a short sale was done. The short sale has to have both banks agree to it and in the time frame they set. It sounds like a foreclosure not a short sale.

Replies

Valorie Stover Quality Realtor July 11, 2010 at 12:37pm

It can depend on what type of second they had on the house. The best thing to do is talk to BofA loan dept. let them know the house is not theirs any more and that they have nothing to pay them with. Some banks will let it go for now but want them to sign agreeing to allow the bank to come after the money in the future. I wish them luck!
Betsy Hartge July 11, 2010 at 12:26pm

Sorry Valorie, I was tired while I was typing and made a mistake. I meant to say fell through not went through.After 6 months of negotiations, the short sale was withdrawn before the offer was accepted by the bank. One of the buyers lost his job and they could not get the financing. Within months, the house was auctioned off for a lot less than the offer that sat on the table for over 6 months. The B of A was willing to go along with the short sale, but when the short sale failed and the first mortgage bank auctioned off the house, that left the B of A second mortgage unpaid. Now B of A is after the original owners who already lost the house to foreclosure and have no money. What do you think they should do?

Valorie Stover Quality Realtor said:
I don't understand one of your statements, "The short sale went through almost a year later and the bank auctioned off the house". The bank doesn't auction off a house, if a short sale was done. The short sale has to have both banks agree to it and in the time frame they set. It sounds like a foreclosure not a short sale.
Valorie Stover Quality Realtor July 11, 2010 at 8:11am

I don't understand one of your statements, "The short sale went through almost a year later and the bank auctioned off the house". The bank doesn't auction off a house, if a short sale was done. The short sale has to have both banks agree to it and in the time frame they set. It sounds like a foreclosure not a short sale.

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