Can 2nd lender pursue deficiency judgment after charge off?

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californiatim

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Post Posted: Fri Dec 12, 2008 10:58 am    Post subject: Can 2nd lender pursue deficiency judgment after charge off?
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We've tried several short sales, but the second - B of A - wouldn't budge on their 85% requirement. We brought the first current hoping the second would initiate the foreclosure, giving us protect from deficiency judgement in CA.

They are telling me they have decided to charge off the loan. Two Quetions:

1. How can I sell the house in this situation?
2. I assume they can't go after a deficeny judgement because they have choosen not to foreclose. Am I right or wrong?
3. The B of A agents have been telling me once written off they will consider new guidelines for a settlement.

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Icon Mini Profile jameshogg
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Post Posted: Fri Dec 12, 2008 9:15 pm    Post subject:
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Hi californiatim,

Charging off the loan does not mean that they have forgiven the mortgage. It only means that your mortgage has been sold off to a collection agency. As far as I know, if you pay off the collection agency, they will have no problems with you selling the property. But you should remember that selling off the property will make your first mortgage due and you may have to pay them off immediately.

As far as your second question is concerned, if you are speaking about the mortgage which is going to be charged off, then yes, they will not go for the deficiency.

I did not understand your 3rd question. If they are charging off the mortgage, then I don't think you will need any settlement with them. You will have to contact the collection agency and pay off the debts to them.

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Rafffi

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Post Posted: Wed Jan 14, 2009 1:51 pm    Post subject: Wells Fargo Charged of my HELOC
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I am in Ca. I am trying for a loan mod with Countrywide(1st) and Wells fargo (2nd HELOC). How likely is Well Fargo to come after me for the charged off amont?
Icon Mini Profile adonis
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Post Posted: Wed Jan 14, 2009 10:35 pm    Post subject:
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Hi Rafffi,

In California, the deficient amount resulting from the sale of the property is not charged by the lender. However, as Wells Fargo has a second mortgage, it can charge off the mortgage to a collection agency who can collect it from you.

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Post Posted: Thu Jan 15, 2009 9:30 am    Post subject:
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Can Wells Fargo try to forclose after the fact, since the already charged off. How long can they try to collect? 7-10 years then it drops off. If I don't have any assets what can they get?
Icon Mini Profile adonis
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Post Posted: Fri Jan 16, 2009 12:06 am    Post subject:
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Hey Raffi,

If the loan has been charged off by Wells Fargo, then they cannot try to collect the debts from you. It is the collection agency who will be collecting the debts. If you pay off the charged off amount, then your credit report will mention it as "paid charged off".

As far as I know, the Fair Credit Reporting Act lets the charge off to show for 7 years, plus 180 days from the last time you paid the account immediately before it was charged off.

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Post Posted: Fri Jan 16, 2009 9:31 am    Post subject:
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O.K. what is the likleyhood that they may file a deficency judgement. And if I don't have any assets that what can they get?
Icon Mini Profile jameshogg
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Post Posted: Fri Jan 16, 2009 11:23 pm    Post subject:
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Hi Raffi,

The lender will always have the right to file a deficiency judgment against you if you are unable to pay off the debts. If you do not have any assets, then they may garnish your wages.

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Raffi

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Post Posted: Mon Jan 19, 2009 10:28 am    Post subject:
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If Wells Fargo(my second) does a charge off on my HELOC. Then do they release the trust deed?
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Post Posted: Mon Jan 19, 2009 11:06 pm    Post subject:
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Welcome Raffi,

Charge off does not mean that the mortgage has been forgiven by the lender. It means that the lender has sold off the mortgage to a collection agency who will in turn collect the dues from you. In that case, I don't think your trust deed will be released.

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Raffi

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Post Posted: Tue Feb 17, 2009 4:59 pm    Post subject: I Got a Mod but not good enough
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Finally I got a modification. So they added all my missed payments and late charges to the end of the loan. Went from 409000 to 429000 and from 5.625 30 fixed to 5.0 40 fixed P and I. That is the first. the second which is not purchase money went from 8% to 0% and from 1000 to 300 a month. Which is great! However, I still cannot afford it. plus I am pay loans that total more now 560000 and the property is worth 400000. I am leaning on letting it go. Unless this new Obama can come up with something more suitable for me. Can't they revaluate based on current market value? Any suggestions?
Icon Mini Profile adonis
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Post Posted: Tue Feb 17, 2009 10:39 pm    Post subject:
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Welcome Raffi,

In a loan modification, the missed payments are definitely added and then a new payment plan is given to you. I don't think lenders will re-evaluate it based on the current market value.

If you are unable to pay the dues after a loan modification, then you can check out the options of short sale or deed in lieu with your lender.

However, both of these processes will affect your credit. A short sale will reduce your credit score by 75-100 points whereas a deed in lieu will lower your credit score by 250 points.

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Lonnie

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Post Posted: Mon Jun 01, 2009 11:43 am    Post subject: Charge offs
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My mortgage company told me they have charged off my 2nd loan, and any payments I send in will be applied to the principal only. I am current on my 1st. My 2nd is due for 5 months. Can you explain how this works.
Icon Mini Profile jenkin7
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Post Posted: Tue Jun 02, 2009 1:35 am    Post subject:
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Hi Lonnie,

As far as I know, If your loan has been charged off to any collection agency, you will have to make payments to them instead of your original second mortgage holder. The collection agency will collect the money from you to recover the loan amount. You can also negotiate with them and settle the debt for less than what is owed. Thus, if the mortgage company has charged off the loan to a collection agency, they will no longer be collecting the mortgage payments from you.
marty

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Post Posted: Wed Nov 11, 2009 1:17 am    Post subject: bankrupsy charge off
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on a bank document I show a 0 balance the banker assured me I would not have to pay the loan and then out of the blue they sold the loan I am very far behind on my payments any suggestions
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