Banks Ready to File Suit Against Short-Sellers
editor’s note: This is part of what we have been talking about. years down the road these bankers are looking to sue borrowers for deficiencies after people recover from the disaster the bankers caused. Also set to explode in a few years are title defects that are incurable resulting from the securitization of loans and incorrect parties bringing foreclosure actions and taking title while the Lender sits blithely unaware that his rights are being twittered away.
Banks Threaten Lawsuits Against Short Sales
Updated: Oct 05, 2009 4:25 PM
Banks Threaten Lawsuits Against Short Sales
There’s a new warning out for struggling homeowners who think a short sale is their way out of a foreclosure. Big name banks like Bank of America, Citibank, and Wells Fargo are threatening to come after those who sell their homes through short sales years later once their credit is restored.
Realtors say banks threatening to do this are causing some fear, but homeowners have no other options but to turn to short sales over foreclosure. Remember that bail out money these banks were given? Realtors say if banks do go after people, that bail out money should be given back to the government.
Realtor Tammy Truong started in the short sale market two years ago when she noticed home owners were desperate and didn’t consider foreclosure as an option. “They’re confused and don’t know what to do. They want to do the right thing and they don’t want to walk away and foreclose,” she said.
But short sales are now being threatened by banks. “They are pushing out the short sale process for as long as possible and looking for new avenues to try and sue people after a short sale is completed,” said Realtor Justin Chang.
Chang says at a recent realtors meeting, big name banks were on hand and made it clear they had no problem with going after homeowners who short sell years from now as they attempt to improve their credit. “In a meeting with a lot of bank officials who came out here, they came out here and said we are able to track for up to six years peoples credit, so if they do get back on track and are able to purchase again and employment comes back, that’s when they’ll try to tag them and sue them for the difference,” he said.
Both Truong and Chang say banks were given millions in bailout money to help them survive and help the crippling housing market. Going after owners who complete short sales was not part of the plan. “If they go back after all these people, I feel they should give back all the bailout money,” said Truong.
Realtors are turning to Nevada’s Congressional Delegations, hoping to get them involved in this and stop these banks before anyone is sued years from now.
It is ironic that ‘we the people’ are some of the most manipulated on earth. It is equally odd that even though we ‘think’ we’re part of the greatest democracy the world has ever known – we do not actually participate in a democracy at all; nor do we recognize one when we see it. These facts attest to how thoroughly the ‘American people’ have been propagandized by corporate media and govt.’talking heads’. Americans are slaves to a system that preys upon them and turns around and tells them how well they are treated.
Pardon my ignorance or lack of coffee – but, am I missing something?
In a short sale, the mortgage holder (actual or pretender) issues a Discharge of Mortgage (and records it) and will return the Note marked “PAID” (hopefully). This happened in my short sale.
What basis does any entity have to sue on deficiency after that? (And yes, I did receive a Form 1099-C)
On the other hand my opinion is that the bankers/thieves/pretender lenders are trying to pull a fast one to get people scared, they want to use that as distraction so that people simply let go of their homes to land right on the thieves’ hands as foreclosures so that they can keep making millions of money and making millions homeless, it is a psychological move on their part to keep us looking the other way while they steal our homes, we all know what they want and what they will do to get it, it’s not secret folks. Let’s keep on moving forward having Neil as our guide, let’s follow the master’s steps and save whatever we have left, i am not even sure if many of these lenders/thieves will still be around many years from now after we Americans clean their clock, you see guys and gals it’s not even close to being over, the worse is yet to come, perhaps for both parts, the good and the bad guys but at the end we will raise our hands in victory as they march into the dark with their heads down in shame.
To victory America!!!!
to JL Semidey: based on your comments i feel lots of resentment in you, but i am not quiet sure for what, however i have a feeling you are using a double edge sword with sharpest edge towards yourself, here is why: first you acknowledge being a real estate agent for 15 years, then you acknowledge having had (allegedly) 120 short sale listings and having sold 3 out of 120 (pretty pathetic), and by admitting to the previous you are also admitting that you came out off of those three sales you had “with several thousand dollars in commission” and didn’t care about the other 117 people; in fact i think that you thoughts at that very particular moment must’ve been: ” who cares” I “made my money”, as for the very last paragraph “so if you are trying to sell your homes in short sales, think about who is making the money and get out of it” , i think that it should really say the following: **so if you are trying to sell your homes in a short sale, make sure you don’t even come close to JL Semidey, because chances are he will NOT get the job done! think about who is not making the money and sounding biter now** . I wonder if you ever told your clients your very own words above “get out of it. Fight for your home, it is worth it. Do not give up” i seriously doubt you did so, but instead you were probably doing what any other RE agent is doing out there today, or like the agent I used did. in short all i can say is that your bitterness is clear as water to me now.
I have said this for a couple of years, those “accounts” are being tossed into the “to be delt with later” pile. If they don’t go after the homeowners, they can sell the receivable to a collection agency. Folks that thought they had solved the problem in many cases, have solved nothing. This is not right on the banks part.
If the bank sends them a 1099 for the loss, then they are in the clear. They can’t write it off and go after them. If there is no 1099 issued to the homeowner after the sale, bet you will hear from them somewhere down the road… perhaps the best advise is to explore how to become judgement proof. Bankruptcy will wipe it out and the best time to do it is when things are there worst for the homeowner.
Also, while this applies to short sellers, the same is true of those homes foreclosed on. There really is no easy way out of this.
I just can’t believe these bankers are even American citizens…
What a sad state of affairs. In the year 2007 I had over 120 short sale listings,, the servicers at the time were refusing as they still are doing to give up the name of the interested parties, what kind of a resolution is a short sale if out of 100 listings only 3 get approved.
As a former real estate agent for over 15 years, I feel sad about the NAR and their minions upselling a recovery that does not exist to prop up a business that they helped to kill.
I will tell you why Real Estate agents still use the insanity model for their marketing. They know their efforts a futile, how ever if they list 100 homes for short sale and only sell thee a month, and I am being very generous in my math, they come out on top with several thousand dollars in commissions, and in their ever mindset if the other 97 lose their homes who cares, they made their money.
So if you are trying to sell your homes in short sales, think about who is making the money and you get out of it. Fight for your home, it is worth it. Do not give up.
This disgusts me…how much more blood do they want?
I think the banks which do this should not only return every penny of bailout money they’ve not already returned – but then those banks should have every customer’s outstanding loans forgiven and wiped off the books. The banks, their major shareholders, directors, and senior executives should have their assets auctioned to the highest bidder with the bank, its competitors, its directors, major shareholders, and senior executives prohibited from purchasing. The proceeds of the auctions should then compensate the victims of the banks evil and anything else should be divided amongst the whole nation (except the above excluded people).