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Notice of intent to foreclose please help


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I just received a certified letter from BOA for an intent to foreclose if full past due is not recieved by April 27. This is my second loan for 79,000. I have a first with Wells fargo that was modified a year ago. I haven't been able to pay my 2nd for a year since it was sold from first franklin to BOA.

My house is way under water. My loan amount is 395,000, first loan is 307,000, 2nd is 79,000. House value is 275,000. I'm very scared and don't know how to proceed if they do continue their process and send me a NOD.

Can the 2nd foreclose if the first is not??? and the house value won't cover the first loan alone.

I have recieved the same intent to foreclose letter about a year ago.

Please advice me on what to do. If BOA does accept settlements, can I offer them 5 or 10%, my mother is willing to lend me this amt. because I cannot afford to make any payments to them.

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I just received a certified letter from BOA for an intent to foreclose if full past due is not recieved by April 27. This is my second loan for 79,000. I have a first with Wells fargo that was modified a year ago. I haven't been able to pay my 2nd for a year since it was sold from first franklin to BOA.

My house is way under water. My loan amount is 395,000, first loan is 307,000, 2nd is 79,000. House value is 275,000. I'm very scared and don't know how to proceed if they do continue their process and send me a NOD.

Can the 2nd foreclose if the first is not??? and the house value won't cover the first loan alone.

I have recieved the same intent to foreclose letter about a year ago.

Please advice me on what to do. If BOA does accept settlements, can I offer them 5 or 10%, my mother is willing to lend me this amt. because I cannot afford to make any payments to them.

 

 

Would help to know what state you are in.

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I just received a certified letter from BOA for an intent to foreclose if full past due is not recieved by April 27. This is my second loan for 79,000. I have a first with Wells fargo that was modified a year ago. I haven't been able to pay my 2nd for a year since it was sold from first franklin to BOA.

My house is way under water. My loan amount is 395,000, first loan is 307,000, 2nd is 79,000. House value is 275,000. I'm very scared and don't know how to proceed if they do continue their process and send me a NOD.

Can the 2nd foreclose if the first is not??? and the house value won't cover the first loan alone.

I have recieved the same intent to foreclose letter about a year ago.

Please advice me on what to do. If BOA does accept settlements, can I offer them 5 or 10%, my mother is willing to lend me this amt. because I cannot afford to make any payments to them.

 

 

Would help to know what state you are in.

Im in NJ

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Yes, 2nd can foreclose even if 1st is not. Now the question is, will they...?

Answer: Very, very doubtful, based on the info you posted. This notice to foreclose will probably end up like the last one, nothing happening.

 

Will they accept an offer to settle? Most likely, as this is a better offer (something) than they will get (nothing) if the property goes to sale.

Suggest that you have a professional do your negotiating. Also best if a third party is doing the talking versus the party that just defaulted on them for 79K plus costs. Even though this is a BIG corp, the person you will be speaking with is HUMAN, believe it or not, and emotion enters into it for them too when talking to the homeowner, so for that reason it is best if the party that they are negotiating wiht is not the homeowner or the debtors mother, brother, etc. Arms length is best IMO. It could be the sharpest and most business saavy person you know, who has an inclination for negotiations and understands the situation to some degree... they would be a much better option than you or a relative; again my opinion here. An Atty versed in debt negotiations would be best if you can afford that.

 

Negotiations may also take some time, as they will attempt to beat you up on any offer, so be prepared for months to come to a settlement. I have heard of a number of 2nd accepting 500 to 1K bucks. The other concern here for you may also be the taxation of such forgiven debt, so make sure you understand this element of the transaction. You will likely receive a 1099C for the amount of discount on the mtg, if it is settled for less. Good luck on it.

Edited by SportsNut
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Another option is to file chap 7, I think if you do that they have to wipe the second out. Not sure though. Go for a free console to see a good attorney and see what they suggest. I don't think it would be wise for them to foreclose either as the first leinholder will get all the money, but if they do they could come after you for the deficiency, which filing a chap 7 would stop that as well. GL

 

I just received a certified letter from BOA for an intent to foreclose if full past due is not recieved by April 27. This is my second loan for 79,000. I have a first with Wells fargo that was modified a year ago. I haven't been able to pay my 2nd for a year since it was sold from first franklin to BOA.

My house is way under water. My loan amount is 395,000, first loan is 307,000, 2nd is 79,000. House value is 275,000. I'm very scared and don't know how to proceed if they do continue their process and send me a NOD.

Can the 2nd foreclose if the first is not??? and the house value won't cover the first loan alone.

I have recieved the same intent to foreclose letter about a year ago.

Please advice me on what to do. If BOA does accept settlements, can I offer them 5 or 10%, my mother is willing to lend me this amt. because I cannot afford to make any payments to them.

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Another option is to file chap 7, I think if you do that they have to wipe the second out. Not sure though. Go for a free console to see a good attorney and see what they suggest. I don't think it would be wise for them to foreclose either as the first leinholder will get all the money, but if they do they could come after you for the deficiency, which filing a chap 7 would stop that as well. GL

 

A 2nd mtg cannot be crammed down or discharged in a Ch 7. It can be in a Ch 13 as long as the plan is fulfilled to discharge.

+1 on the deficiency matter, and the obligation being disch in a Ch 7. These can often times be negotiated as well, including the lender standing down on any def judg.

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Yes, 2nd can foreclose even if 1st is not. Now the question is, will they...?

Answer: Very, very doubtful, based on the info you posted. This notice to foreclose will probably end up like the last one, nothing happening.

 

<<snipped>>. You will likely receive a 1099C for the amount of discount on the mtg, if it is settled for less. Good luck on it.

 

 

Not exactly true... the 2nd cannot foreclose if the first is current.....UNLESS they BUY their way into first position

 

as far as 1099C.... There is legislation ( due to expire at end of 2012) that states the "income" from this 1099 doesnt have to be claimed

 

 

 

A 2nd mtg cannot be crammed down or discharged in a Ch 7.

 

again, NOT true...

 

the DEBT from 2nd CAN be discharged in Chapter 7, however, the lien will remain... in this situation, the OP could negotiate a lien release ( if property is upside down this is a risk well worth taking)

Even if not upside down, the 2nd is still not in a position to FC unless the 1st is in default ( unless again, the 2nd buys its way into first position)

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I just received a certified letter from BOA for an intent to foreclose if full past due is not recieved by April 27. This is my second loan for 79,000. I have a first with Wells fargo that was modified a year ago. I haven't been able to pay my 2nd for a year since it was sold from first franklin to BOA.

My house is way under water. My loan amount is 395,000, first loan is 307,000, 2nd is 79,000. House value is 275,000. I'm very scared and don't know how to proceed if they do continue their process and send me a NOD.

Can the 2nd foreclose if the first is not??? and the house value won't cover the first loan alone.

I have recieved the same intent to foreclose letter about a year ago.

Please advice me on what to do. If BOA does accept settlements, can I offer them 5 or 10%, my mother is willing to lend me this amt. because I cannot afford to make any payments to them.

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I just received a certified letter from BOA for an intent to foreclose if full past due is not recieved by April 27. This is my second loan for 79,000. I have a first with Wells fargo that was modified a year ago. I haven't been able to pay my 2nd for a year since it was sold from first franklin to BOA.

My house is way under water. My loan amount is 395,000, first loan is 307,000, 2nd is 79,000. House value is 275,000. I'm very scared and don't know how to proceed if they do continue their process and send me a NOD.

Can the 2nd foreclose if the first is not??? and the house value won't cover the first loan alone.

I have recieved the same intent to foreclose letter about a year ago.

Please advice me on what to do. If BOA does accept settlements, can I offer them 5 or 10%, my mother is willing to lend me this amt. because I cannot afford to make any payments to them.

 

 

Have you tried a securitization analysis?

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Yes, 2nd can foreclose even if 1st is not. Now the question is, will they...?

Answer: Very, very doubtful, based on the info you posted. This notice to foreclose will probably end up like the last one, nothing happening.

 

<<snipped>>. You will likely receive a 1099C for the amount of discount on the mtg, if it is settled for less. Good luck on it.

 

 

Not exactly true... the 2nd cannot foreclose if the first is current.....UNLESS they BUY their way into first position

as far as 1099C.... There is legislation ( due to expire at end of 2012) that states the "income" from this 1099 doesnt have to be claimed

 

 

 

A 2nd mtg cannot be crammed down or discharged in a Ch 7.

 

again, NOT true...

the DEBT from 2nd CAN be discharged in Chapter 7, however, the lien will remain... in this situation, the OP could negotiate a lien release ( if property is upside down this is a risk well worth taking)

Even if not upside down, the 2nd is still not in a position to FC unless the 1st is in default ( unless again, the 2nd buys its way into first position)

 

NJ is a judicial state and I have NO idea where you get the notion that a 2nd has to "buy-in" on the 1st mtg before foreclosing. Simply not accurate info. This buy-in may apply in a few states but this wouldn;t be the norm at all. If you read the OP it states that the 2nd mtg HAS sent a cert notice of "Intent to Foreclose". Yes, a 2nd can and will foreclose, although this one probably won't due to the LTV and the 2nd being under h2o, as stated. This part we seem to agree on.

 

Regarding a cramp down in a ch 7... if you will note what my response was above: "A 2nd MORTGAGE cannot be crammed down in a Ch 7". This is a TRUE statement. The MORTGAGE secures the property, (what you refer to as the lien), the NOTE is the promise to pay, and the NOTE is the only thing that goes away in a Ch 7 Bk. The MORTGAGE survives and cannot be crammed down in a Ch 7, as stated.

 

Regarding the 1099C... yes they will receive one. You will note that I didn't comment on whether this is a taxable event. We simply don't know if any foreclosure will be completed before yr end 2012, or if the tax favored treatment might be extended beyond 2012, which if I had to guess... it likely will.

 

Must we go another round on the above...?

Edited by SportsNut
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NJ is a judicial state and I have NO idea where you get the notion that a 2nd has to "buy-in" on the 1st mtg before foreclosing. Simply not accurate info. This buy-in may apply in a few states but this wouldn;t be the norm at all. If you read the OP it states that the 2nd mtg HAS sent a cert notice of "Intent to Foreclose". Yes, a 2nd can and will foreclose, although this one probably won't due to the LTV and the 2nd being under h2o, as stated. This part we seem to agree on.

 

Regarding a cramp down in a ch 7... if you will note what my response was above: "A 2nd MORTGAGE cannot be crammed down in a Ch 7". This is a TRUE statement. The MORTGAGE secures the property, (what you refer to as the lien), the NOTE is the promise to pay, and the NOTE is the only thing that goes away in a Ch 7 Bk. The MORTGAGE survives and cannot be crammed down in a Ch 7, as stated.

 

Regarding the 1099C... yes they will receive one. You will note that I didn't comment on whether this is a taxable event. We simply don't know if any foreclosure will be completed before yr end 2012, or if the tax favored treatment might be extended beyond 2012, which if I had to guess... it likely will.

 

Must we go another round on the above...?

 

 

 

yes, as long as you are pointing out MISinformation and/or INCOMPLETE information...

 

 

instead of grandstanding assertions, how about you post links and statutes to support your claims and I do the same...

 

 

in a Chapter 7, the 2nd would be converted to unsecured debt....the MORTGAGE ( debt) does NOT survive, only the LIEN....so if you would no longer owe the $$ on the 2nd however the bank still has a lien on your property...the cramming down in a Chapter 13 term ( though it has been allowed rarely in a Chapter 7)

 

 

 

 

 

but yeah, in between earning my paycheck, I will post links to support what I say....

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Not exactly true... the 2nd cannot foreclose if the first is current.....UNLESS they BUY their way into first position

 

 

 

 

http://www.bankrate.com/bosre/news/DrDon/20060206a1.asp

 

The second mortgage lender can foreclose on the property even if the first mortgage is in good standing with its lender. A second mortgage is a secured loan backed by the value of the home, just like the first mortgage. The difference is that the first mortgage lender is paid ahead of the second mortgage lender in the event of a foreclosure. That's why it's called a second mortgage.

 

If the second mortgage lender initiates foreclosure proceedings, the first mortgage lender may step up and buy out the second's interest in the property. Conversely, the second could negotiate to buy the first mortgage. As long as the home's appraised value exceeds the combined loan balances, there's not a lot of additional risk, and there is a real benefit, for one lender to control both mortgages.

 

If you thought you were safe by keeping up with the payments on the first mortgage while missing payments on the second, you're not. If the second has threatened or initiated foreclosure proceedings, you need to find a good real estate attorney that will help you manage this process and allow you to protect or realize the equity you have in the property.

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The argument is, IS THERE ENOUGH EQUITY IN THE HOUSE TO MAKE THIS WORTH IT FOR THE 2ND LIEN HOLDER!?

 

for the 2nd to foreclose, despite the 1st being current, they will have to incur ALL of the legal costs of foreclosure and still only get proceeds IF there is anything left AFTER the 1st gets paid...OR for them to buy their way into 1st position by purchasing the 1st lien from its owner.

 

 

<clipped from elsewhere>

 

If you are in good standing on the first - and behind on your second - why would the first 'buy out' the second?

1) the first mortgage does nothing if they are current - no foreclosure action

2) if the second attempts to foreclose, they have a first in front and can not get clear title without buying out the first

3) if the first is in arrears and forecloses, all they have to do is finish the process and not pay the second anything because foreclosure is getting rid of all jr liens (not priority liens like taxes - just jr liens like HELOCS/seconds etc)

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The argument is, IS THERE ENOUGH EQUITY IN THE HOUSE TO MAKE THIS WORTH IT FOR THE 2ND LIEN HOLDER!?

 

for the 2nd to foreclose, despite the 1st being current, they will have to incur ALL of the legal costs of foreclosure and still only get proceeds IF there is anything left AFTER the 1st gets paid...OR for them to buy their way into 1st position by purchasing the 1st lien from its owner.

 

 

<clipped from elsewhere>

 

If you are in good standing on the first - and behind on your second - why would the first 'buy out' the second?

1) the first mortgage does nothing if they are current - no foreclosure action

2) if the second attempts to foreclose, they have a first in front and can not get clear title without buying out the first

3) if the first is in arrears and forecloses, all they have to do is finish the process and not pay the second anything because foreclosure is getting rid of all jr liens (not priority liens like taxes - just jr liens like HELOCS/seconds etc)

 

The 2nd could foreclose "subject to the 1st mtg", which leaves the 1st in place, surviving the foreclosure. There is no "buy-in" required, unless you are referring to this as a "buy-in"; (your own terminology). Yes, we can all agree that with the FMV of the property being what it is, <under h2o> that it wouldn't make good sense for a 2nd to do so, but I have seen it happen. Again, it is doubtful, but who is to say that the 2nd isn't an insured mtg <PMI>, and they may have to foreclose in order to collect from the PMI company. I have seen that happen too. So we don't know enough about the exact details of the case to know for certain.

 

So the 2nd could foreclose, naming the 1st mtg in the complaint, in which case the 1st will be paid off in the sale, or forced to bid to protect their position. If the 1st bids and the 2nd didn't they would be foreclosed. Again, why might they do this? PMI insurance.

The 2nd could foreclose "subject to the 1st mtg" which means that the 1st mtg will remain in place, but the 2nd mtg lender would get a deed to the property with the 1st mtg still in tact, and of course have to service the debt of the 1st mtg. (the only reason they might do so again would be to collect on a PMI claim. But this is less plausible.

The 2nd mtg could go thru the motions up to the point of actually filing suit of foreclosure in order to collect on a PMI claim. This would depend on the requirement of the PMI company, if any. The mtg could be insured, even w/o the knowledge of the homeowner, as there is lender paid PMI, and many 2nd's bought the ins in the 2005 and beyond time period.

 

Again, there are no absolutes here, but all the above scenarios are possible. Except that I have never before heard the term "buy-in" used to describe any action in a foreclosure case. **I have been involved in multiples of 1000's of foreclosure cases in 5 states.

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got those links to foreclosure proceedings, statutes and laws to support what you have asserted, ya know since ya have so much experience, should be easy to point to them for us lay folks ....

 

My opinion is not based on what I read at some link, it is based on preparing, filing and being involved in these type of cases first hand. Sure, I suppose links could be found to substantiate the info, but I don't feel that I need to spend the time to prove what I am saying here, since I know it to be factual. If you wish to spend the time to try and prove me wrong, then go for it.

 

Additionally, as I'm sure you know, foreclosure law is very state specific. Procedures and practices vary from state to state and sometimes within a state, from county to county with local court procedures for judicial states. So one link, or set of links wouldn't be an absolute anyway...

 

BTW, what is your foreclosure experience? Is it theory or hands-on?

Edited by SportsNut
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This is CREDITBOARDS, not SportsNut-is-a-self-proclaimed-expert-boards.......as you can see, I am on STAFF here ( showing off my big fat paycheck)so Im a lil picky about folk's grandstanding from their soapboxes.

 

advice is not going to be given & taken based on who can lemonade the farthest onto the snowbank....

 

we give advice based on LAWs, STATUTES, court precedence, etc..NOT because some random interwebber says he knows best because he claims to have a lot of experience....

 

real simple to put up or shut up since YOU are the ONLY one who knows what you claim to be factual...

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I guess the STAFF told me, didn't you STAFF.

 

So disagreeing with you (STAFF) is considered grandstanding from a soapbox... I see.

 

Let me see if I understand this, I need to provide a link and you don't. You tell me that I am wrong about things like a mtg not able to be crammed down in a Ch 7, which was undeniably bad info. Must I provide a link or case law to prove such a thing... I won't waste the time.

 

I believe that I've spent enough time in this thread, since you (STAFF) have shown me that you can lemonade further than me... I get it. Moral of the story: Don't go against the STAFF even if what is stated is incorrect.

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I guess the STAFF told me, didn't you STAFF.

 

So disagreeing with you (STAFF) is considered grandstanding from a soapbox... I see.

 

Let me see if I understand this, I need to provide a link and you don't. You tell me that I am wrong about things like a mtg not able to be crammed down in a Ch 7, which was undeniably bad info. Must I provide a link or case law to prove such a thing... I won't waste the time.

 

I believe that I've spent enough time in this thread, since you (STAFF) have shown me that you can lemonade further than me... I get it. Moral of the story: Don't go against the STAFF even if what is stated is incorrect.

 

 

its not a matter of staff telling "you"...but the OP, nor anyone else here, knows you any better than a can of paint... if there is conflicting "advice" it would be irresponsible of you to state I know because I do this all day long...

 

Is the OP supposed to say " A man on the internet said so, so it MUST be true"?

 

I posted "A" link...was poised to do more but your attitude took a nosedive at the implication that you arent the Jesus H Christ of Foreclosure info.

 

/done

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Yes, 2nd can foreclose even if 1st is not. Now the question is, will they...?

Answer: Very, very doubtful, based on the info you posted. This notice to foreclose will probably end up like the last one, nothing happening.

 

<<snipped>>. You will likely receive a 1099C for the amount of discount on the mtg, if it is settled for less. Good luck on it.

 

 

Not exactly true... the 2nd cannot foreclose if the first is current.....UNLESS they BUY their way into first position

 

as far as 1099C.... There is legislation ( due to expire at end of 2012) that states the "income" from this 1099 doesnt have to be claimed

 

 

 

A 2nd mtg cannot be crammed down or discharged in a Ch 7.

 

again, NOT true...

 

the DEBT from 2nd CAN be discharged in Chapter 7, however, the lien will remain... in this situation, the OP could negotiate a lien release ( if property is upside down this is a risk well worth taking)

Even if not upside down, the 2nd is still not in a position to FC unless the 1st is in default ( unless again, the 2nd buys its way into first position)

 

TeeSharice is correct. There is no cramming down a 2nd in a chap 7. When going through a chap 7, the 2nd becomes unsecured debt which can be discharged. The 2nd will place a lien on the property and it will remain if the first Mortgage is not in default (9 out of 10 cases, it doesn't make sense for the 2nd to foreclose if the first isn't behind in payments so the lein remains or they try to sue...which is where a BK will help to protect said person). This info is pretty standard.

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