Ding dong...it's the bank knocking.

irvinehusky

irvinehusky

New member
OC Housing News (I hope it's not taboo to mention them here; if so I apologize) has an article about debt collectors going after mortgage borrowers after their finances improved from the defaulting homeowners.

I may be mixed on this one but I don't want the previous lesson to be that you can always default on your loans and get away.  I have paid every penny of money I ever owed, on time so I am one that felt stupid for paying back every penny even if I took a loss and watching those "smart ones" just walking away. 

I guess all of us that refi'd (becomes recourse loan) better watch out.  :p

What do you think?  Serves them right or shame on them evil banks?
 
So, if a person squatted for 2 years and eventually sent back the keys is he o.k. or can they still come after that person, if the bank felt it was worth it financially?

Irvinecommuter said:
Actually, there are no "recourse" loan in California.  California has  one-action/security first rules.  HELOCs/2nd mortgages, however, may be able to recover against a debtor.
http://www.nolo.com/legal-encyclopedia/the-california-one-action-rule-foreclosure.html

and you should declare BK after walking away from a house.  Credit already dead from the foreclosure, might as well start the clock running.
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irvinehusky said:
So, if a person squatted for 2 years and eventually sent back the keys is he o.k. or can they still come after that person, if the bank felt it was worth it financially?

Irvinecommuter said:
Actually, there are no "recourse" loan in California.  California has  one-action/security first rules.  HELOCs/2nd mortgages, however, may be able to recover against a debtor.
http://www.nolo.com/legal-encyclopedia/the-california-one-action-rule-foreclosure.html

and you should declare BK after walking away from a house.  Credit already dead from the foreclosure, might as well start the clock running.
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If the bank forecloses...it's done in California.  Junior lienholders could go after the debt/promissory note but would be wiped out in BK as a unsecured debt.
 
Husky - a purchase money loan, which are the first loan(s) used to purchase the house, are non recourse loans. So if u squat and walk away the bank can not come after u. Any debt that is forgiven is subject to income tax by the IRS. Once you refi, the loan is no longer a purchase money loan and if u squat and turn in the keys the bank can come after u unless the loans are discharged via bankruptcy.
 
qwerty said:
Husky - a purchase money loan, which are the first loan(s) used to purchase the house, are non recourse loans. So if u squat and walk away the bank can not come after u. Any debt that is forgiven is subject to income tax by the IRS. Once you refi, the loan is no longer a purchase money loan and if u squat and turn in the keys the bank can come after u unless the loans are discharged via bankruptcy.
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Pretty sure the refi things was taken care off a couple years ago.  There is some complication with cash-out refinancing but again...bankruptcy takes care of that.
http://realtytimes.com/agentnews/agentconcerns1/item/728-20121023_antideficiency

Also, no IRS penalty for balances forgiven between 2007 and 2013.  Probably 2014 as well but no extension by Congress yet.
http://www.irs.gov/uac/Home-Foreclosure-and-Debt-Cancellation
 
I was thinking about those new, Internet connected, electronic doors that was discussed about two months ago here on this board that makes a ding-dong sound even when you knock on it.  Don't try to search for it since it'll probably not come up.  :p

JustSayin said:
If the bank is knocking, where does the ding dong come in?  Qwerty?
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Right, I was thinking about refi's since I see some of you are constantly talking about refi'ing (I won't mention who) again.

So, if you guys/ladies got a decent 30 fixed loan or 5 or 7 year ARM and the rate goes down a little bit, would this non-recourse (I guess maybe that's not the terminology here but seems like you're more protected than otherwise)/recourse issue after refi'ing stop you from doing so?

I'm guessing a lot of the people didn't know about the bankruptcy part and assumed since they weren't harassed any more, that they were off and free forever?  Maybe those banks are smarter than some of us thought? 

qwerty said:
Husky - a purchase money loan, which are the first loan(s) used to purchase the house, are non recourse loans. So if u squat and walk away the bank can not come after u. Any debt that is forgiven is subject to income tax by the IRS. Once you refi, the loan is no longer a purchase money loan and if u squat and turn in the keys the bank can come after u unless the loans are discharged via bankruptcy.
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Interesting.

I thought refis, esp cash out, were subject to debt collection but IC's link seems to indicate that if the bank forecloses on you, they can't pursue you in court because they are only allowed one course of action.

Seems like 2nds and HELOCs can, but as IC said, BK can be declared.

Maybe OCHN is referring to people who have not declared BK.
 
So many things would have to go wrong for me not to refi because I would lose non-recourse priveleges and the chances of all of those things happening is practically zero.
 
Maybe the bank is just bringing you one of these

images
 
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