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As my readers (and anyone who knows me) know, I am a Short Sale Specialist.  I aggressively fight for the right of home owners to get them out of their unaffordable mortgages all the while with the intent of removing them from future liability.

Please read an email I sent to the Massachusetts Attorney General:

I have a question as to the state’s laws on allowing a lender to proceed with collection activity after issuing a 1099C to a consumer.  A 1099C by its very name says a debt was cancelled by the lender and the amount reported on a persons taxes.  How can it be legal for a mortgage lender to issue the 1099C and then proceed to start collection activity? Any dime the consumer pays back after appropriately filing the 1099C and paying taxes on the “gift of equity” or the “phantom income” invalidates that 1099C as the money at that point was wrongly reported and is actually an ongoing debt.

What is the Commonwealth’s stance on this?  What laws are in place to protect the consumer and prevent this double dipping?

If there are no laws in place at this point, it seems to be a big loophole in the law that allows a mortgage lender to “have his cake and eat it too”.

Thank you in advance for your prompt response.

Here is the response I received:

Dear. Mr. Files:

Thank you for contacting the Office of Attorney General Martha Coakley.  Your message has been forwarded to me for response.

The Massachusetts Consumer Protection Act, G.L. c. 93A, section 2, prohibits unfair and deceptive acts in commerce.  Were any creditor to take action to collect a debt that was previously written off, it is possible that such conduct might constitute a violation of said statute.

Such conduct also might possibly constitute a violation of 940 CMR 7.07(2), which says

It shall constitute a deceptive act or practice to engage in any of the following       practices:

(2) Any knowingly false or misleading representation in any communication as to the     character, extent or amount of the debt, or as to its status in any legal       proceeding, provided, however, that an incorrect or estimated bill submitted by a       gas or electric utility company regulated by M.G.L. c. 164, and the Department of       Public Utilities shall not be prohibited by 940 CMR 7.07;

I hope this information will be useful, and thank you again for contacting the Office of Attorney General Martha Coakley.

Sincerely,

Nicholas Downing
Constituent Services Coordinator
Public Inquiry & Assistance Center
Office of the Attorney General Martha Coakley

Please print this out and keep it for your records to have handy in case needed! Also, please forward this to any Massachusetts home owner who is currently OR has completed a short sale.

Bobbie Files, C.D.P.E.
Certified Distressed Property Expert
Your Bristol and Plymouth County Realtor
508-238-5000 x.296 Office
508-521-9480 Direct / SMS
888-570-9907 Toll Free Direct Fax
bobbiefiles@kw.com Email

Visit my website at www.BerkleyMass.com

Visit my YouTube Channel at https://www.youtube.com/user/bobbiefiles

Join My Facebook Communityhttp://www.facebook.com/bobbiefiles.realtor

Search for Berkley Ma Homes at: http://BerkleyHomes.BerkleyMass.com

Search for Taunton Ma Homes at:http://TauntonHomes.BerkleyMass.com

For those struggling to pay your mortgage payments please visit:http://shortsales.berkleymass.com

A couple of months ago I closed on a short sale with BofA as the 1st and Citizens as the 2nd.  Typical process and timelines.  Citizens got all the client's documentation, had a complete package and submitted the file to a negotiator. GREAT!!!

About a week after, I was told they would be assigning a negotiator.  I received a call on my way to the office.  The negotiator called me to introduce himself and let me know that he was overlooking the file and he needed some updated documents.  Well, like I said I was on my way to the office....driving.  I am not a great multi-tasker when it comes to driving, talking, writing and , uhm, well ...smoking.  Yes, I am a smoker....no comments about the smoking necessary I know it is bad!

In order to lessen the chances of killing myself or others, I pulled over so I could write down what he needed (afterwards I realized I could have just recorded the call on my phone, but I can be a little slow at times).  Here I am thinking I am being a good, responsible adult, I pulled off into the break down lane. I now understand that is a no-no.  

Moments after pulling over, whaddya know, blue lights are flashing behind me!!! I don't know if you call it being pulled over since I was already pulled over, but for a lack of a better name for it, I was pulled over.  

I was on the phone with Chris (the negotiator) and looked in my rearview and exclaimed loudly and in a panic "Shoot (and that was not the word), bluelights!!!!!!"  By Chris' response I am guessing that "Bluelights" is a local thing, because he said "Bluelights?? What do you mean?"

"I am being pulled over!!!!!!! And I was already pulled over!! What the (explative)!?!?!?!?!" 

As politely as could be, Chris started to laugh!! "How about you call me later?" he says.

"Are you nuts!!!! You're a witness!!!!!!' You are staying on this phone!!! Here comes the cop, I am going to put the phone on speaker phone and put you down."

Well, in typical me fashion, I do things without thinking.  The cop approaches my car and asks me if everything is okay, and I responded with "Yes, I pulled over because I needed to write something down."  The cop looks at me rather puzzled and says "What was so urgent that you had to stop?"

"Oh, I was on the phone (and I grab the phone for effect) and I was told that the person I was speaking with needed something so I pulled over to write it down."

The cop looks and says "Well this isn't the correct area to be pulling over, it is dangerous and you shouldn't do it, and also buckle up."

Well.....this is me being me, instead of putting down the phone to free a hand, I decide to free the other hand by flicking my cigarette out the window and at the cop!!!!!!!

Not my smartest move!!! The look I got could have froze water. "And you should really quit smoking to." Then the cop turns to walk back to his car.  Before he could even reach his car I was outta there!!  I grabbed the phone and Chris was in tears he was laughing so hard.  I could not believe that happened!! That short sale got approved and closed a couple of weeks later.

Now here we are in April and I have Citizens mortgage on another short sale.  Driving to my office on Wednesday and my cell rings.....Chris again!!!!  The first question he asked me "Do you remember me?"  Like I could forget him.  Second question "Are you driving?"  LOL!!!

Bobbie Files, C.D.P.E.
Certified Distressed Property Expert
Your Bristol and Plymouth County Realtor
508-238-5000  x.296 Office
508-521-9480                Direct / SMS
888-570-9907               Toll Free Direct Fax

bobbiefiles@kw.com Email

Visit my website at www.BerkleyMass.com

Visit my YouTube Channel at https://www.youtube.com/user/bobbiefiles

Join My Facebook Communityhttp://www.facebook.com/bobbiefiles.realtor

Search for Berkley Ma Homes at: http://BerkleyHomes.BerkleyMass.com

Search for Taunton Ma Homes at:http://TauntonHomes.BerkleyMass.com

For those struggling to pay your mortgage payments please visit:http://shortsales.berkleymass.com

Sometimes I really wonder if people, no matter how hard I stress the importance of submitting supplemental documentation in a timely manner, really see the urgency in the situation.

Day 1 of request:  Hi, Mr. Seller The bank is requesting this form to be filled out and they need it back in 4 days.

Day 2, Hi Mr. Seller Have you filled out that form for your lender? Could you send it back to me ASAP

Day 3, Mr. Seller it is imperative to get that form back to your lender tomorrow. They need it to process the short sale.

Day 4, Mr. Seller If you do not fill out that form and return it to me today, the lender is reserving its right to proceed with a deficiency judgement.  

Let's just see if the Day 4 conversation does anything!!!!

Bobbie Files, C.D.P.E.
Certified Distressed Property Expert
Your Bristol and Plymouth County Realtor
508-238-5000  x.296 Office
508-521-9480                Direct / SMS
888-570-9907               Toll Free Direct Fax

bobbiefiles@kw.com Email

Visit my website at www.BerkleyMass.com

Visit my YouTube Channel at https://www.youtube.com/user/bobbiefiles

Join My Facebook Communityhttp://www.facebook.com/bobbiefiles.realtor

Search for Berkley Ma Homes at: http://BerkleyHomes.BerkleyMass.com

Search for Taunton Ma Homes at:http://TauntonHomes.BerkleyMass.com

For those struggling to pay your mortgage payments please visit:http://shortsales.berkleymass.com