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Countrywide/Deficiency Judgement/Capital Gains Loss? |
GatorGrad
4 Posts
Member Since: 05/20/2008
Jacksonville, FL
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Posted: 22:12 on 05-20-2008
Need some advice.
Have new Condo in Fort Myers that was purchased as second home in 05. Owe 200K, worth 140-150. Have tenant in place at this point. Took a financial whack and letting this property go. Two questions...
1) Got a lawyer and home is currently listed as Short Sale by local realtor. Since I will get a 1099 for difference from Countrywide, can I offset that "gain" by the losses I took on the property this year..ie interest,taxes, etc.
2) What do lenders look at when deciding to pursue a deficiency judgement and how likely are the to get one? My lawyer is going to send them letters asking them to show that they are the "true" owners of the loan etc. since he claims that is starting to work in litigation against lenders who claim they own the loans...when in reality it is the investor pools they sold the loans off to that own them. He claims they will probably back down when that is asked. Anyone have any experience with this?
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afcjkatz
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Posted: 02:21 on 06-05-2008
We are sorry to hear about you trouble and have dealt with this issue hundreds of times.
Answer #1: We apologize but this is a question for an accountant and best answer by a CPA. (Look to answer 2 for other pertinent information).
Answer #2: True owners?!? Sounds a little hard to believe. As Countrywide is a company servicing more than a trillion in mortgages in their current portfolio. We have never heard of this. As for how likely can they get a deficiency the question how insolvent are you? Make sure that the attorney that you are using is not charging for non-sense letter writing where most chances are that no one will read the letters he sends. What you need is a real estate professional with experience or an LM company. Don't deal with someone that may have dealt with one or two cases but someone who has worked out thousands.
Best of luck.
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ypochris
2200 Posts
Member Since: 03/22/2006
Lansing, MI
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Posted: 08:34 on 06-05-2008
I have been hearing of some cases where a judge prevented a foreclosure as this process can only be initiated by the owners of the note. The point being that many servicers do not even know who actually owns the note, and there may be thousands of owners when it has been bundled and securitized.
I would be very interested in hearing more on this- please keep us posted as to the results of your inquiry on this issue.
Chris
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ITBInvestor
525 Posts
Member Since: 09/07/2005
Holly Springs, NC
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Posted: 09:21 on 06-05-2008
I'm still a little confused on this whole issue. In my state, the security instrument is the deed-of-trust. The grantee is well defined on the recorded document. If the D-T is "sold" or changes hands, then there is an Assignment document that is recorded. It seems like the servicer of the note is irrelevant. ?
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ypochris
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Lansing, MI
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Posted: 09:40 on 06-05-2008
My (unclear) understanding is that the servicer of the note is indeed irrelevant- which is why they cannot initiate a foreclosure action...
Chris
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ITBInvestor
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Posted: 13:13 on 06-05-2008
I went through and (re)read a D-T on one of my properties. It spells out in great detail (section 20) that the lender can sell the note and/or change loan servicing at any time. Section 22 allows the lender to accelerate the loan and invoke remedies. In my state (a trustee state) the lender can invoke the power of sale, and the trustee handles the process per state law. It seems to me the servicer is irrelevant. I'm just going by the text in the D-T, but it doesn't seem like the attorney has much to stand on....
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jackbenimble
228 Posts
Member Since: 12/04/2007
Stevenson Ranch, CA
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Posted: 16:29 on 06-05-2008
There's a difficiency created whether or not it's sold prior to or after foreclosure. Either way a lender may pursue the loss and depending on the state, they have years to file for judgement.
Asking a seller to sign an agreement for repayment is soley up to the investor and there's little control over their decision to require it or not. The most you can do is tell them the seller won't sign and call their bluff. Some will fold some won't. Based of experience I would say 1 out of 10 ask for it and 1 out of 2 will actually let the house go before they give in. Most investors that ask are usually in a subordinate position.
[ Edited by jackbenimble on Date 06/05/2008 ]
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GatorGrad
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Member Since: 05/20/2008
Jacksonville, FL
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Posted: 18:50 on 06-05-2008
According to my attorney who is a realtor and an attorney he said that the precedent was started in October against Deutsche Bank. He said it was actually 14 cases a judge threw out because Deutshce Bank couldn't prove they owned the loan.
Their attorneys claimed the "unspoken" rule that the lender always has the right to go after the property since they are servicing the law, but the judge threw the book at them. My attorney said this has started a huge wave of suits by homeowners over this issue and a lot of lenders are paying major attention to this case.
If you want to google it, the judge was Christoper A. Boyko and the case was in Ohio last October or November. When my attorney told me about it I googled it and there is actually an attorney in Jacksonville (which is where I reside) who is using this in a lot of her cases to help homeowners. Her name is April Charney. I am sure if you google any of those names you can find some info on the dismissals.
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GatorGrad
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Jacksonville, FL
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Posted: 18:56 on 06-05-2008
Here is a copy of a something April Charney, the atty in Jax was quoted as saying in some news article. I don't understand the details of what is being said but figured some of you guys may.
In my cases, many of the trusts try to argue equitable assignment that predates the filing of the foreclosure, but a securitized trust cannot take an equitable assignment of a mortgage loan. It also means that the securitized trusts own nothing.
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cojo12
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Member Since: 06/10/2008
Bradenton, FL
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Posted: 21:17 on 06-10-2008
I am very interested to know how far along you are in the process. We are about 60 days late with Countrywide and are in a similar situation.
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GatorGrad
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Posted: 23:50 on 06-10-2008
My attorney instructed me to find a realtor who did nothing but short sales. I went to Remax and they referred me to a lady in Fort Myers whose company specializes in this.
She listed the property two weeks ago and we got a good offer on it yesterday as a matter of fact. I stopped paying in March. I had only one loan on the place (Countrywide's) for 203K. It was listed at 149K and the offer came in at 125K. She will now submit the offer to Countrywide and we'll see what happens. She said based on Comps in the development that are being sold by the developer/builder at 140K, they should accept it.
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bargain76
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Jacksonville, FL
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Posted: 09:27 on 06-11-2008
April Charney is a Legal Aid attorney in Jacksonville and seems to specialize in foreclosure cases.
She doesn't win many cases, but she does delay the sale of the home.... sometimes for a couple of years.
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vguess99
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Member Since: 04/10/2003
Hartford, CT
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Posted: 19:19 on 01-19-2009
read several articles about this. here a link to this judge ruling:
http://www.bloggingstocks.com/2007/11/15/ohio-court-gives-victory-to-homeowners-facing-forceclosure/
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