Surrendering House - Will I Be Sued?
My question involves a foreclosure in the State of: Tennessee
We are in the process of working through an attorney to surrender our former home. We live in KS now and the house was on the market for nearly a year with no buyers. We are 72 days late, so we've received the deafult notices. No word form the attorney to date on any agreement. It's upside down about $30,000. There are 2 lenders.
These mortgages were acquired by fraudulent applications submitted by a broker. My attorney has all the documentation. 1st mortgage app shows we were making way more money than we were, and even shows we were insolvent at the time the loan was closed = $67,000 in CC debt and NO assets (even though we owned a house in KC at the time). It was to be a NINJA deal but apparently that wasn't going to work out. Neither bank questioned these apps or the info given.
Our fault we didn't look over the apps, but they were given to us the day of closing. We were moving our family across the country, things were unclear, but we needed a house asap, etc. Not until just recently did I even read the applications, which was stupid, but it's the facts. We trusted the broker because she'd handled a lot of RE purchases for my SIL.
After the loans closed the broker called me to say congratulations, and explained she was due another 1% fee for getting the deal done (which I paid her directly - she couldn't report it or something) and told me that we "better not go BK or anything" ..hahaha.." I took that as a joke (like don't lose your house, it was hard getting the loans, etc) The mortgages were approved so we were grateful.
I'm wondering how far either lender might go to sue me and/or the broker for the false info they were provided. Or if they fear trouble so they'll leave it alone.
The house may be worth $125K-$130K and I owe 1st mtg $124,000 and $45,000 to 2nd mtg.
Just looking for thoughts on this.:confused:
Re: Surrendering House - Will I Be Sued?
So how did you get a second mortgage on the house?
I'm convinced you knew about the applications about you not making the amount you stated, that the information you provided to the broker/bank. Of course they may have asked for recent pay subs, or tax returns, did they?
Don't think for one second that because the info the loan officer or broken give the bank to approve the loan that you're all clear, info is provided by you, and they will base upon the info your provided to obtain the loan, and if you provided false document/info you'll be responsible.
Good Luck,
NOTE: Bank also can screw up, but I doubt this one.
Re: Surrendering House - Will I Be Sued?
Quote:
Quoting
FrogInKS
My question involves a foreclosure in the State of: Tennessee
We are in the process of working through an attorney to surrender our former home. We live in KS now and the house was on the market for nearly a year with no buyers. We are 72 days late, so we've received the deafult notices. No word form the attorney to date on any agreement. It's upside down about $30,000. There are 2 lenders.
These mortgages were acquired by fraudulent applications submitted by a broker. My attorney has all the documentation. 1st mortgage app shows we were making way more money than we were, and even shows we were insolvent at the time the loan was closed = $67,000 in CC debt and NO assets (even though we owned a house in KC at the time). It was to be a NINJA deal but apparently that wasn't going to work out. Neither bank questioned these apps or the info given.
Our fault we didn't look over the apps, but they were given to us the day of closing. We were moving our family across the country, things were unclear, but we needed a house asap, etc. Not until just recently did I even read the applications, which was stupid, but it's the facts. We trusted the broker because she'd handled a lot of RE purchases for my SIL.
After the loans closed the broker called me to say congratulations, and explained she was due another 1% fee for getting the deal done (which I paid her directly - she couldn't report it or something) and told me that we "better not go BK or anything" ..hahaha.." I took that as a joke (like don't lose your house, it was hard getting the loans, etc) The mortgages were approved so we were grateful.
I'm wondering how far either lender might go to sue me and/or the broker for the false info they were provided. Or if they fear trouble so they'll leave it alone.
The house may be worth $125K-$130K and I owe 1st mtg $124,000 and $45,000 to 2nd mtg.
Just looking for thoughts on this.:confused:
You signed the application and not the loan broker.
So if any information on the application is false, that would be considered mortgage fraud on YOUR PART not the loan officer.
This not a cause of action you should consider taking.
All NLD's on loans that are under 24 months old are investigated for fraud anyway.
Just because you had a NINA loan does not mean you are allowed to commit mortgage fraud.
Here is a link to deficiency judgment law in TN
http://stopforeclosure.com/Tennessee...losure_Law.htm
TN is a deficiency state
If the house is sold for less then what you owe a judgment will be entered for the short amount on the first mortgage.
Second mortgage will sue you for the full amount of the second loan.
Here is a link to the mortgage fraud part of your transaction, you can see how many people get away with mortgage fraud these days, NONE
http://www.mortgagefraudblog.com/
Re: Surrendering House - Will I Be Sued?
Thank you for the responses.
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Quoting
lakeside_cruise
So how did you get a second mortgage on the house?
I have no idea, really - the appraisal came in at $140K. The broker said it was based on our credit scores, as the whole transaction was supposedly.
I'm convinced you knew about the applications about you not making the amount you stated, that the information you provided to the broker/bank. Of course they may have asked for recent pay subs, or tax returns, did they?
OK, I have no reason to lie about this. No, the banks did not ask for any documentation whatsoever. The application was not signed by us pre-closing, it was taken over the phone by the broker in TN while we were in KS. She asked no info regarding income, just basic questions (names, SSN, place of employment, address). She pulled bureaus, inputted the info. Submitted to banks. The application has a box checked at the bottom: "Application was: Taken over phone by XXXX"(brokers name, broker place of business)
Don't think for one second that because the info the loan officer or broken give the bank to approve the loan that you're all clear, info is provided by you, and they will base upon the info your provided to obtain the loan, and if you provided false document/info you'll be responsible.
Good Luck,
NOTE: Bank also can screw up, but I doubt this one.
Quote:
Quoting
OhMy
You signed the application and not the loan broker.
So if any information on the application is false, that would be considered mortgage fraud on YOUR PART not the loan officer.
This not a cause of action you should consider taking.
All NLD's on loans that are under 24 months old are investigated for fraud anyway.
What is an NLD?
Just because you had a NINA loan does not mean you are allowed to commit mortgage fraud.
Here is a link to deficiency judgment law in TN
http://stopforeclosure.com/Tennessee...losure_Law.htm
TN is a deficiency state
If the house is sold for less then what you owe a judgment will be entered for the short amount on the first mortgage.
Second mortgage will sue you for the full amount of the second loan.
Here is a link to the mortgage fraud part of your transaction, you can see how many people get away with mortgage fraud these days, NONE
http://www.mortgagefraudblog.com/
Here's an article I found from 5/31/08. Granted, this is not in TN but I thought it was similar to my situation:
A recent article in The Wall Street Journal, Are Borrowers Free to Lie?, talks about a recent Bankruptcy Court decision in the Northern District of California. In re Hill dealt with an attempt by National City Bank to hold the Hills’ mortgage loan non-dischargeable, meaning that, despite the loss of their home due to foreclosure and their subsequent bankruptcy, they would have to pay it back. How did the Hills get in this situation? They did what many borrowers were urged to do over the past several years: take out a “stated income” loan.
Stated Income loans, also called “liar loans” or NINJA (No Income, No Job, No Assets) loans, were mortgage loans in which no proof of income, employment or assets was required. Rather, the borrower simply “states” on the loan application what his or her income is, and the bank does no checking. No pay stubs, no tax returns, nothing. Ask for a mortgage, in virtually any amount, and get it without any investigation of ability to pay, examination, or common sense. Common sense would have disclosed that something was very wrong in the Hills’ case.
The Hills were 54 years old, and worked as delivery drivers and employee for an auto-parts distributor. They signed a loan application falsely stating they earned about a combined $191,000 a year. They claimed that their independent broker and the bank put the income figures into the applications without their knowledge and that they didn’t read them before signing.
Based on the obviously false figures in the application, following the foreclosure on their home and the Hills filing for bankruptcy, National City Bank, the lender on the loan, asked the Bankruptcy Court to find that their debt to the bank should not be discharged because they lied on their mortgage application. While agreeing that the income statement was false, the Bankruptcy Court disagreed that the Hills should lose their discharge.
The Court stated:
While the Court finds and concludes that the debtors made a material false representation concerning their financial condition to the Bank in October 2006, with knowledge of its falsity and the intent to deceive the Bank, the Court finds and concludes that the Bank’s nondischargeability claim under § 523(a)(2)(B) must fail. The Bank failed to prove that it reasonably relied on the Debtors’ false representation concerning their income, as set forth in the October Loan Application. As a result, the Bank’s claim has been discharged. Judgment will be ordered accordingly.
In other words, because National City knew or should have known that the Hills misrepresented their income and didn’t check it out, it didn’t meet one of the criteria for nondischargeability: it didn’t rely on the Hills’ false statements in making the loan. The Hills’ loan was found to be dischargeable.
The Hill decision is an important one. It makes clear that banks cannot place sole responsibility for their poor lending practices and decisions on the shoulders of the borrowers. Mr. and Mrs. Hill aren’t without fault, but the fault was on both sides. The Hills lost their home of 20 years and had to file for bankruptcy. The bank lost its money.
Sounds to me as if the Court restored a bit of balance to the equation.
Re: Surrendering House - Will I Be Sued?
Here Here i read that also put the blame on both! Good for the peeions.
Re: Surrendering House - Will I Be Sued?
It was actually northern california.
Re: Surrendering House - Will I Be Sued?
Yes, it was in CA. It was published right before we stopped paying these mortgages and gave me hope in our case.
We plan to file Ch13 soon, most likely - either this debt will be included or it won't. It doesn't matter to me if I have to pay the 2nd back most of the money, it was used for CC debt so it IS my debt.. BUT I don't feel I should be the one carrying all the blame in this situation given the circumstances. That broker made a lot of money and apparently did this quite often from what I understand.
I can live with the fact the my poor decisions got me to the point of BK, and I'll pay 60 months on whatever, but I certainly don't want to be criminally charged for this.
thank you for your replies.
Re: Surrendering House - Will I Be Sued?
Quote:
Quoting
FrogInKS
Yes, it was in CA. It was published right before we stopped paying these mortgages and gave me hope in our case.
We plan to file Ch13 soon, most likely - either this debt will be included or it won't. It doesn't matter to me if I have to pay the 2nd back most of the money, it was used for CC debt so it IS my debt.. BUT I don't feel I should be the one carrying all the blame in this situation given the circumstances. That broker made a lot of money and apparently did this quite often from what I understand.
I can live with the fact the my poor decisions got me to the point of BK, and I'll pay 60 months on whatever, but I certainly don't want to be criminally charged for this.
thank you for your replies.
I am i the same boat i did my cpt 13 a year ago, and i can recall my second mortgage was done the same way just sign here no questions asked, i am still making payments on 1st and second but it is getting very hard but good luck to you and God Bless You.