“But here’s the key point: 12 states are “non-recourse states.” In these states, the bank is prohibited from going after a foreclosure victim for the balance of the mortgage post-foreclosure sale.”
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The Short Sale Scam: Most Going to Non-Recourse States that Bar Deficiency Judgments
By: David Dayen
The more I look at this foreclosure fraud settlement report, and the reliance on short sales for the allegedly positive results, the angrier I get.
Let’s first understand what the numbers refer to, when the Office of Mortgage Settlement Oversight lists $8.67 billion in short sales. That number does not refer to the sale price of the home, but the difference between the sale price and the amount owed on the mortgage. This unpaid principal balance is then forgiven by the bank. According to the OMSO, 74,614 borrowers took advantage of a short sale that qualified under the settlement, with an average of around $116,200 per borrower. This includes first and second lien remaining balances, on both short sales or “deeds-in-lieu,” where the borrower deeds the residents to the servicer or investor instead of a foreclosure (basically the same thing, only the “buyer” is the servicer or investor, instead of an outside third party).
This acts a lot like a waiver of a deficiency judgment. In the circumstance of a deficiency judgment, the bank can get a court ruling to go after a foreclosure victim post-foreclosure to get them to cough up the balance between what they ended up getting on a foreclosure sale and the amount owed on the mortgage. Banks rarely do this, for the simple reason that foreclosure victims typically don’t have a big pot of money to give them. It’s like drawing blood from a stone. So banks often waive deficiency judgments.
Be sure to check out this one in full here…
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I purchased my third property in 2008 mind you on my good credit. I have been trying to shortsale my property for three years. Now they keep stating they didn’t get their documents required in Equator. The realtor swears up and down they were sent. When I call I get misinformation. And noone knows anything. Well I was kicked out of the HOFA short sale program for not receiving documents. ha what a lie. They I was told I was sent back to BOA in a cooperative loan. But low and behold I was told a week later that I was in a regular short sale again and if my documents were not received by 10 AM today I would be cancelled from that too. Well my realtor swears that the info was sent that was requested, but not according to BOA. I am ready to file a law suit for shortsale fraud. Know a good Attny????
The American people are settling for fraud on a monumental scale.
Just wait till they get a 1099-C cancellation of debt from the Bank.I’m sure they gov’t are conspirators in this.
We were led on for a modification then after almost 2 years denied and were offered a refi. with $10,000 in fees and points tacked back on to an underwater mortgage. What it appears to me is that all of these BofA refis were then assigned to BAC and shuffled into their default loan side set up as Legacy accounts with the same beneficiary account ID#’s. I have the internal notes and other papers that positively show these were foreclosures and short sale propeties set up in advance. I did not allege a fraud claim in my suit because it is so hard to prove. However, with this information I got through discovery, I am either going to amend or file a whole new suit. I am so sick of reading different accounts of the white house propoganda calling what the banks have done anything but fraud. Descriptions such as “sloppy, careless, poor, slipshod”, paperwork do not come close to what occurred and is still occurring. It is shamefull what is going on in this country and there seems to be no way to stop it.
B of A has a long history of being difficult. The Countrywide stuff, if one knew, is an albatross. They are padding fees, expenses and foreclosing on exorbitant amounts above the mortgage, I guess writing it off on paper. Nothing to stop them, absolutely NOTHING! They are selling this stuff for cash, bad title and all, with properties sold in bulk on deed to limited corporations. I guess if they transfer a time or two it will scrub the taint off the title?
So much laundering going on here that one can only wonder what we have come to in this country when Washington, regulators, all either look to civil courts to make a buck off of the scam or alternately become part of the problem by ignoring the criminal aspect of fraud.
All of those agencies are just a joke. I sent a package of information to the “new” Protection Financial Agency and they just turned around and sent it to BofA who I have been in litigation with for well over a year. They were formed for one purpose; to make it appear the government is doing something. Our government, ‘by the banks, for the banks, screw the people”.
Anyone else getting more enraged (in a healthy way) each time they read about this crap?
The Office of Mortgage Settlement Oversight appears to be yet another “PR office” for the Banksters, to continue business operations post settlement/bailout.
Bank of America are scum. All the finger pointing goes to Countrywide as the problem. If anyone really took the time to investigate Bank of America; they will probably make Countrywide look good. I believe they purchased Countrywide for this reason; to be the scapegoat that they would point to as they did and continue to do their dirty deeds. They are really duping their Shareholders. Everything they put in their last 10k report about clean-up and their operations is false. They lie, cheat and conive at any opportunity possible. This is one leopard that cannot change it’s spots.