Posted on 06/20/2024 6:31:07 AM PDT by CFW
Soon, the COVID loan forbearance will play out the same way.
bought ours, payed off early, not worried about zombies. IF they do show up they’ll get the “south 40” treatment...backhoe buried with all the other zombies.
“But I thought it was forgiven.”
“Did you sign the paperwork?”
“No. The bank just told me it was forgiven.”
Title insurance is important but not relevant to this situation. She took out the second mortgage and did not get any documentation that it was forgiven so it was legitimate and still valid. Verbal statements about real property are worthless.
If they indeed did get an official letter from the mortgage company saying that the loan was forgiven then they have standing to fight the new creditors in court. Also the new creditors could face fraud charges. Litigation city here we come. Only the lawyers win.
“....She could have gone to a real estate attorney to verify everything. It would have been money well spent. ....”
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I agree with you.
I would think it would show up on a credit report. Consumers are entitled to one free report/year for each of the 3 reporting agencies. I make it a habit to check one every 4 months rotating to a different one each time. Funny thing is I literally just this minute saved my TransUnion report (June is TransUnion, November is Equifax and Feb is Experian) after giving it a quick once-over. Always know what is in your credit report and know your credit score also.
Annaualcreditreport.com
Did she receive a Form 1099-C, Cancellation of Debt from the mortgage holder? Did she pay income tax on the “cancelled” debt? No? Then it wasn’t forgiven.
“Did she pay income tax on the “cancelled” debt? “
Good point.
Most folks have no clue about that stuff.
When she says, “told”, did she receive anything in writing?
And who comes from Delaware?
Thanks for clarifying.
ALWAYS get everything in WRITING.
when young minds are full of slogans and woke-ism there isn’t time or room to hold an education also.
Non-payment is generally a default under all mortgages and notes. A default on a mortgage is basically a breach of contract case. Depending on the State where the property is located, there is a Statute of Limitations to bring Breach of Contract cases. For instance, in CA, the statute for a written contract is 4 years. If you stopped payments 5 years ago because they misled you to believe the loan was forgiven, the time for a breach of contract or promissory note ran out when the default hit the 4 year mark. No lawsuit over the default and no foreclosure after the statute runs out is legal.
Depends. She may not have if they rolled the “forgiven” amount over into the modified loan.
Second what’s the expiration on the debt for the collector? Seriously, they have not been sending requests for payment for over a decade?
The second mortgage should have been appearing on her credit report, along with who the knew holder of the debt is. After X amount of years the debt falls off. If the bank told her the debt was “forgiven,” basically a charge off and then sold it to another bank to collect as bad debt, I do believe that’s in violation of the Fair Credit Act. And if after 7 years...there’s a fair amount of explaining to do.
Mass. has a 6 year timed bar on bad debt. The problem is if she admitted it was her debt, that resets the clock.
Smart post.
Thanks for sharing.
They are the people who caused the subprime mortgage crisis. All that other propaganda from the Left and the Right was nonsense. The crisis wasn't caused by "predatory lending" or the "CRA." It was caused by the borrowers themselves.
In the early 2000's, when the Fed lowered the interest rate, home prices shot up, buyers overpaid for their homes, and many homeowners took out second mortgages. Everyone (except Peter Schiff) believed the property values would keep rising. Mortgage companies didn't care. They wanted to sell as many mortgages as possible so they could bundle them up and sell them off. Then, the bubble burst.
I didn't know some borrowers had their second mortgages forgiven. Why did some people lose their homes, but others had their debt forgiven? And, I guess, some mortgages weren't forgiven but sold off to an investor who waited 17 years to start collecting? In 2020, when the Fed lowered the interest rate, home prices shot up again. So, now these "zombie mortgage" holders are cashing in, 17 years later...
You borrow, you pay back. Or you relinquish the security to the lender. That’s the way it’s supposed to work.
Did she get that in writing?
Unless verified in writing. A registered notice to the party who made the statement that "you said that this (include specifics) loan had been forgiven" must be responded to or it becomes binding. But the trick is to be sure that the party receiving the communication has the authority to respond. Layers of management may insulate them.
“This woman bought a 365,000 house for no money down, and thought she’d gotten away with something.”
This is what the Democrats envision as “affordable housing”. They think every low-rent freeloader deserves a free house, paid for by someone else.
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