Paul,

I reciently short sold my house. I had two mortgages on the house. The first from Coundtywide and the second  (Heloc) from WAMU. Countrywide accepted the short sale and my credit report states settled/ paid. WAMU shows charge off? Why? They accepted the short sale too? (Per my realtor). What questions should I be asking? Do I have to repay the debt? Can they place a judgement againts me, garnish my wages, of file law suit againts me? We did a short sale to avoid forclosure and ruining my credit. I couldn’t afford to pay the mortgage and cannot afford to pay the remaining debt. Please Help

Lisa (more…)

I just filed a lawsuit against my lender for fraud and 10 other actions including sold note and I would like to know what law governs mortgage servicers to report my payment as disputed and not late since I am not behind in payments, the servicer and lender is countrywide.

Tim (more…)

Hi Paul.

First of all I want to say thank you for the blog. The seminar has helped me a lot.

A few months ago I found some inaccuracies on my credit report. I disputed the issues, all came back unverified except for one from a CA named Midland Credit Management (a.k.a. MCM). they claimed I owed over a thousand dollars to a company that I had never even heard of.

Following the CRAs telling me that the debt came back verified (after the dispute, MCM increased the balance owed by 20 dollars), I sent a debt validation letter CMRRR to MCM (One week after they received the letter they increased the balance owed by another 30 dollars). Once I received the green card back, I sent a request for reinvestigation to all three CRAs with a copy of the green card and the debt validation letter .

Today I received correspondence from MCM and it was not a debt validation, but instead a request that I send them a copy of any documentation that I may have that supports my “dispute”(even though in my letter, I fully stated that it was a request for debt validation), including “cancelled checks, paid letters, police reports, or any other documentation”.

It seems weird to me that I asked them to validate the debt and their response was to ask me to validate the debt (I don’t have that information since I never dealt with the original creditor). To me it seems like they realized that they have the wrong person and they don’t want to admit it (I checked the white pages and there are 40 other people with my full first name, middle initial and last name in my state).

Anyway I don’t think that sending me a debt validation letter in response to my debt validation letter is fully legal. What do you think? Any ideas on what my next step should be?

Tim (more…)

And he came and took the book out of the right hand of him that sat upon the throne. And when he had taken the book, the four beasts and four [and] twenty elders fell down before the Lamb, having every one of them harps, and golden vials full of odours, which are the prayers of saints. And they sung a new song, saying, Thou art worthy to take the book, and to open the seals thereof: for thou wast slain, and hast redeemed us to God by thy blood out of every kindred, and tongue, and people, and nation; And hast made us unto our God kings and priests: and we shall reign on the earth.

Here In re Hwang, 393 B.R. 701, 2008 Bankr. LEXIS 2460 ( Bankr. C.D. Cal., 2008) we have an interesting variation of negotiable instruments gone wild. 

Mortgageit, Inc. originated a mortgage loan on a Las Vegas, NV property and then Mortgageit transfers the loan to IndyMac Bank.  IndyMac subsequently gets taken over by the FDIC. 

Since payments apparently aren’t being made on the loan on time and the homeowner has filed a Chapter 7 bankruptcy, IndyMac seeks a relief from stay to foreclose. 

Here’s where it gets interesting.  The bankruptcy court learns through testimony of an IndyMac employee, that IndyMac no longer owns the note.  And IndyMac doesn’t know exactly who owns it, but they’d like to foreclose anyway as the servicing agent of the (missing) note’s owner.

The Court wasn’t having any of it and gave IndyMac ample time to find the “real party in interest” and join them to then be granted a relief from stay; but, it never happened and so after two months the relief from stay was denied.

The questions In re Hwang cited above were apparently brought not by the defense but by the judge, as I see the legal term of sua sponte which means “of one’s own accord”.  Stepping aside from the instant case In re Hwang for a moment, it makes me think of how many foreclosures are taking place with procedural errors and affirmative defenses and counterclaims that might be available to the homeowner and yet are never raised.  Property gets foreclosed.  End of story.

I found this excerpt from the Court’s order interesting and most likely applicable to thousands upon thousands of loans that were merely pledged to securitization trusts in subprime and Alt-A loan pools:

“[A] person who has an ownership right in an instrument might not be a person entitled to enforce the instrument.  For example, suppose X is the owner and holder of an instrument payable to X.  X sells the instrument to Y but is unable to deliver immediate possession to Y.  Instead, X signs a document conveying all of X’s right, title, and interest in the instrument to Y.  Although the document may be effective to give Y a claim to ownership of the instrument, Y is not a person entitled to enforce the instrument until Y obtains possession of the instrument.  No transfer of the instrument occurs under Section 3203(a) until it is delivered to Y.”

Yeah, I think it probably does apply to hundreds of thousands or even millions of loans out there that were pledged by now defunct mortgage lenders and the promissory notes were not subsequently indorsed to the securitization trusts.  The question is how many borrowers going through foreclosure are going to question it?

This author is not an attorney and this information should not be considered legal advice.  Please consult an attorney for legal advice.

Here’s a case covering choice of law provisions in a cardholder agreement and the Statute of Limitations.  This was a Florida case that was decided in favor of the consumer and is an excellent example of how weak the plaintiff/debt collector’s case is and when faced with a defendant that fights back, it appears the debt collector tried to explain that they didn’t have the documentation because the TILA only requires them to keep records for two years.  Funny!  It’s a great read.

Florida Credit Research Inc. v. Felicien (Fla. County Ct. Apr. 15, 2008)

This author is not an attorney and this information should not be considered legal advice.  Please consult an attorney for legal advice.

I would like to know that best way to approach a pay for delete.  If I call a collection agency and ask for a pay for delete and they decline then they have my number etc. and can contact me.

Jessica (more…)

Sometimes called a ‘net sheet’ or preliminary closing statement, HUD1, or simply a HUD….no matter what you call it, you need to submit one as part of your short sale submission.

Short Sale HUD

Forget everything you knew about FHA short sales.  There’s a new Mortgagee Letter describing the FHA pre-foreclosure sale (a/k/a short sale) guidelines which states:

“This ML supersedes in its entirety ML 1994-45, “HUD’s Nationwide Pre-Foreclosure Sale (PFS) Procedure”.  It also supersedes the section (pages 29-35) of ML 2000-05, “Loss Mitigation Program-Comprehensive Clarification of Policy and Notice of Procedural Changes” that describes Pre-Foreclosure Sale requirements.”

FHA Pre-Foreclosure Sale Procedures