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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: Foreclosed - now 2nd has sent me to collections! Posted by Jinger on April 20, 2008 at 9:09 PM In Reply to: Foreclosed - now 2nd has sent me to collections! posted by Cin on April 03, 2008 at 1:30 PM : We are in CA and foreclosed earlier this year (January 2008 - Happy New Year). We were upside down, had a 1st and 2nd. After being on the market for over a year and falling out of escrow 4 times, we couldn’t hold on anymore. : Apparently, the 1st purchased the home at auction. I just found out the 2nd has sent us to collections. Their tactics have been brutal and they are trying to make me agree to many terms over the phone. The collector put me on hold and called the 2nd and they say the 1st purchased the home, only used the funds to pay off their loan, but the 2nd was left with nothing therefore *we* are liable and need to pay back. : What should my next steps be? Are we really responsible for this balance? : Thanks for any info you can provide! It is MUCH appreciated. First of all, it's unlikely that the first "purchased" the home at the auction and left the 2nd with nothing. If the second was the foreclosing lender, then the minimum bid would be for the balance of the second plus legal fees and if the First Loan did purchase the house at the auction, then the second would have been paid off in full. Sounds more like the first did the foreclosing and rather than "purchasing" the house at the auction, simply got it back (back to beneficiary - the 1st). In that case the second would have been wiped out. So, if the second was wiped out and the second was 'recourse' (a loan NOT used to purchase the property such as a refi, and in some cases certain HELOC loans, even if taken out at purchase) then the 2nd might very well have the right to persue collection. In either case, you need to get a handle on dealing with collection agencies. Many experts insist that you should NEVER speak to them on the phone. Go to www.creditboards.com and read the "Help I've Been Served" and "Collections" boards. You'll want to also get a copy of all of your credit reports directly from each issuer (Experian, Transunion, Equifax.) You'll want to see how the second debt is showing on your credit report. You'll also want to find out which loan 'foreclosed' (look at your foreclosure notices) and verify whether or not the second was a recourse or non-recourse loan. If the second was non-recourse (you took it out when you bought your house, and you lived in the house) then the second probably has no right to persue you for the debt. And if they do have the right, the odds are decent that the Collection Agency may violate some laws in persuing you. Tread carefully with these collectors. Resist any temptation to let the collection agency strong arm you into sending even a partial payment at this point. Find out your legal rights first and strategize a plan, which might include considering BK (talk to an attorney or two.) Good luck! Follow Ups: Re: Foreclosed - now 2nd has sent me to collections! CC in OC 7:39 AM, 04/21/08 (1) Re: Foreclosed - now 2nd has sent me to collections! Jinger 9:02 AM, 04/23/08 (0) Post a Followup: Name : E-Mail : Subject : Comments: : : We are in CA and foreclosed earlier this year (January 2008 - Happy New Year). We were upside down, had a 1st and 2nd. After being on the market for over a year and falling out of escrow 4 times, we couldn’t hold on anymore. : : Apparently, the 1st purchased the home at auction. I just found out the 2nd has sent us to collections. Their tactics have been brutal and they are trying to make me agree to many terms over the phone. The collector put me on hold and called the 2nd and they say the 1st purchased the home, only used the funds to pay off their loan, but the 2nd was left with nothing therefore *we* are liable and need to pay back. : : What should my next steps be? Are we really responsible for this balance? : : Thanks for any info you can provide! It is MUCH appreciated. : : First of all, it's unlikely that the first "purchased" the home at the auction and left the 2nd with nothing. : If the second was the foreclosing lender, then the minimum bid would be for the balance of the second plus legal fees and if the First Loan did purchase the house at the auction, then the second would have been paid off in full. : Sounds more like the first did the foreclosing and rather than "purchasing" the house at the auction, simply got it back (back to beneficiary - the 1st). : In that case the second would have been wiped out. : So, if the second was wiped out and the second was 'recourse' (a loan NOT used to purchase the property such as a refi, and in some cases certain HELOC loans, even if taken out at purchase) then the 2nd might very well have the right to persue collection. : In either case, you need to get a handle on dealing with collection agencies. : Many experts insist that you should NEVER speak to them on the phone. : Go to www.creditboards.com and read the "Help I've Been Served" and "Collections" boards. : You'll want to also get a copy of all of your credit reports directly from each issuer (Experian, Transunion, Equifax.) You'll want to see how the second debt is showing on your credit report. : You'll also want to find out which loan 'foreclosed' (look at your foreclosure notices) and verify whether or not the second was a recourse or non-recourse loan. : If the second was non-recourse (you took it out when you bought your house, and you lived in the house) then the second probably has no right to persue you for the debt. And if they do have the right, the odds are decent that : the Collection Agency may violate some laws in persuing you. : Tread carefully with these collectors. : Resist any temptation to let the collection agency strong arm you into sending even a partial payment at this point. : Find out your legal rights first and strategize a plan, which might include considering BK (talk to an attorney or two.) : : Good luck! : [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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