What Course Of Action Should I Take?

[Elam]

In 2003, I sold my property and took a 2nd mortgage for $23,one hundred, with a baloon after 1 year. The purchaser(SBF) in no way lived up to the terms of the mortgage agreement, paying me only what she could afford. She ultimately filed bankrupsy. She was ordered to spend me a token payment. Now I locate that the home has been foreclosed on, is empty and she is no exactly where to be located. When I contacted the bankrupsy court to ask if I could sue her personally in tiny claims court to recover the funds she owes me, they stated 'see an lawyer'. Getting not currently employed, this is hard. Deutsche Bank, the organization who currently owns the house, says that I have the correct to "redeem" it, but they are asking considerably more for it than it is worth, even more than they paid for it. I am positive they have by no means even noticed the home. There is no logic here. I am the guy who played by the rules and attempted to support her but the opinion of most is that I am just out of luck. Can anybody supply any *constructive* help?

[ring]

Montalguy replied to post #1: two It is a pretty widespread practice inside actual estate for a seller to accept a "second mortgage" in order to sell a home. This signifies that the purchaser will not only be paying the primary mortgage holder a initial mortgage payment, but will also be paying a second mortgage payment to the seller. This may occur if the purchaser could not get financing for the complete quantity of the transaction from the main lender. 51 months ago

[sebastiano]

Do you know what a shlamele is? A shlamele is a person who spills his soup, a shlamazel is the person who it is spilled on. First, a person should NEVER go into business unless they are willing to do what that business calls for. I owned an apartment at one time. Had a very nice family living there. The month after I bought the place they were late with the rent, so I showed up the last day of grace and gave them a 3 day notice to move. They begged and pleaded. They told me of their Doctor bills, the clothing their kid needed for school and so on. My answer was simple, those bills will not mean anything if they are homeless. I told them that I had a mortgage to pay, and the bank was not going to care about their bills. The bank was not going to care about anything except getting paid. I told them that my job as the owner was to make sure that the property was profitable. It could not be profitable if they didn't pay. The law said they had 3 days to pay or get out. Funny thing, the next day, They called me up and asked me to come over and get the money. I did. They were never late again.   Your mistake was treating this like it was a favor. You can't say you didn't do anything wrong, you did. The first day they were late with their payment, you should have issued a notice, hired a lawyer, and stated to move to foreclose on them. If you had, you would have forced the bank to step in and buy you out(pay you off, so they could keep their interest in the property). You see, if you had foreclosed, the bank would have been out the ENTIRE amount of the first. They would have paid you and billed them. By letting the people off the hook, you did them no favor, you only let the BANK off the hook. Everyone played this right except you. Everyone played this as if they were dealing with MONEY.   What now? Your $23,100 is lost. The odds were the loan was a non-recourse loan(so you can not sue the people who bought the house, unless you can find a way to get them on Fraud... I would ABSOLUTELY consult a lawyer, one or two hours in consultation for $100 to $400 per hour would be enough). The Amount is probably too small to hire a lawyer to go after(I would still get one for advice). I would also talk to a tax man about how to take the loss. My guess is that it will be considered a capital loss, with limited recoverability. You may be able to deduct the loss over several years against capital gains (such as stocks, bonds, other properties, etc). The odds are that if you have property coming and going, you should hire a tax guy to do your taxes anyhow. If you havn't, and you did the taxes yourself, you should bring your returns in for a tax review. If you made a mistake, the odds are you can file an amendment and get money back from your taxes from the last few years.   Now, I am an Economics teacher, and the one lesson I hope all of my classes learn is that they need to act as if they were rich when it comes to getting advice. Do you know why Bill Gates has someone do his taxes for him? It is because he knows there are people who know a lot more than he does. He Hires them. I tell my students they should never try to save money when it comes to hiring a lawyer, accountant, Doctor, or Phychologist. Spend whatever it takes to get the best advice there is. No matter what you spend, you will get it back, often several times over.   Example, A good lawyer will scan your loan docs, see that they are probably standard(saving you an hour of time, since he doesn't have to read the whole thing). He will know exactly what you should do, if anything(He Knows, so he saves you 2 or 3 hours of pay in because he doesn't have to research what to do).   REVIEW, 1 Get a good lawyer to look at your docs and listen to your situation (perhaps you should write it down and leave it for him with the Docs, he can give it to a less expensive associate to review your stuff). 2 Get a good tax guy/ accountant to review your taxes, payments, so on to see how you shoud claim the loss and to see if you did your taxes correct while you were digging this whole.   Good luck and keep us advised. dejapooh 50 months ago Please sign in to give a compliment. Please verify your account to give a compliment. Please sign in to send a message. Please verify your account to send a message.

[Bradburn]

fredmonster said: 3 Double check the documents you got from the BK court. Sounds like you got a settlement and released your note, which would mean you can't pursue her any further. Take a look before you file to make sure. 51 months ago

[Kolskeggr]

A shlamele is a person who spills his soup, a shlamazel is the person who it is spilled on. First, a person should NEVER go into business unless they are willing to do what that business calls for. I owned an apartment at one time. Had a very nice family living there. The month after I bought the place they were late with the rent, so I showed up the last day of grace and gave them a 3 day notice to move. They begged and pleaded. They told me of their Doctor bills, the clothing their kid needed for school and so on. My answer was simple, those bills will not mean anything if they are homeless. I told them that I had a mortgage to pay, and the bank was not going to care about their bills. The bank was not going to care about anything except getting paid. I told them that my job as the owner was to make sure that the property was profitable. It could not be profitable if they didn't pay. The law said they had 3 days to pay or get out. Funny thing, the next day, They called me up and asked me to come over and get the money. I did. They were never late again.   Your mistake was treating this like it was a favor. You can't say you didn't do anything wrong, you did. The first day they were late with their payment, you should have issued a notice, hired a lawyer, and stated to move to foreclose on them. If you had, you would have forced the bank to step in and buy you out(pay you off, so they could keep their interest in the property). You see, if you had foreclosed, the bank would have been out the ENTIRE amount of the first. They would have paid you and billed them. By letting the people off the hook, you did them no favor, you only let the BANK off the hook. Everyone played this right except you. Everyone played this as if they were dealing with MONEY.   What now? Your $23,100 is lost. The odds were the loan was a non-recourse loan(so you can not sue the people who bought the house, unless you can find a way to get them on Fraud... I would ABSOLUTELY consult a lawyer, one or two hours in consultation for $100 to $400 per hour would be enough). The Amount is probably too small to hire a lawyer to go after(I would still get one for advice). I would also talk to a tax man about how to take the loss. My guess is that it will be considered a capital loss, with limited recoverability. You may be able to deduct the loss over several years against capital gains (such as stocks, bonds, other properties, etc). The odds are that if you have property coming and going, you should hire a tax guy to do your taxes anyhow. If you havn't, and you did the taxes yourself, you should bring your returns in for a tax review. If you made a mistake, the odds are you can file an amendment and get money back from your taxes from the last few years.   Now, I am an Economics teacher, and the one lesson I hope all of my classes learn is that they need to act as if they were rich when it comes to getting advice. Do you know why Bill Gates has someone do his taxes for him? It is because he knows there are people who know a lot more than he does. He Hires them. I tell my students they should never try to save money when it comes to hiring a lawyer, accountant, Doctor, or Phychologist. Spend whatever it takes to get the best advice there is. No matter what you spend, you will get it back, often several times over.   Example, A good lawyer will scan your loan docs, see that they are probably standard(saving you an hour of time, since he doesn't have to read the whole thing). He will know exactly what you should do, if anything(He Knows, so he saves you 2 or 3 hours of pay in because he doesn't have to research what to do).   REVIEW, 1 Get a good lawyer to look at your docs and listen to your situation (perhaps you should write it down and leave it for him with the Docs, he can give it to a less expensive associate to review your stuff). 2 Get a good tax guy/ accountant to review your taxes, payments, so on to see how you shoud claim the loss and to see if you did your taxes correct while you were digging this whole.   Good luck and keep us advised.

[hampton83]

Double check the documents you got from the BK court. Sounds like you got a settlement and released your note, which would mean you can't pursue her any further. Take a look before you file to make sure.

[bardoul]

JBENZ said: 4 The bankruptcy court's advice is exactly right. You need to contact a lawyer. There is no way anyone could give you an answer on a question like this without a complete review of the sale transaction, the bankruptcy action(Federal Court) and the foreclosure action(State Court) by the first mortgage holder. As a second mortgage holder you had a lot of rights in the bankruptcy and the foreclosure but, if you didn't exercise them then, they have probably all been cut off by now. Your right to redeem the property derives from the foreclosure action and the bank has no say in the matter(you would redeem the property but take it subject to the balance on the first mortgage and would have to pay that off), but that right isn't unlimited and, if you didn't exercise it when you were supposed to it may be gone. 51 months ago

[Kodey]

Help us out a bit, Mg. I am confused. How do you sell your house and take out a 2nd mortgage? Seems like an 'ether' 'or' thing to me. It seems that you are saying you sold the house to someone individually, like you were the bank. But I don't get the second mortgage thing. Who got that money? Where did it go?

[Addams]

@Lono said: 1 Help us out a bit, Mg. I am confused. How do you sell your house and take out a 2nd mortgage? Seems like an 'ether' 'or' thing to me. It seems that you are saying you sold the house to someone individually, like you were the bank. But I don't get the second mortgage thing. Who got that money? Where did it go? 51 months ago

[Gall]

The bankruptcy court's advice is exactly right. You need to contact a lawyer. There is no way anyone could give you an answer on a question like this without a complete review of the sale transaction, the bankruptcy action(Federal Court) and the foreclosure action(State Court) by the first mortgage holder. As a second mortgage holder you had a lot of rights in the bankruptcy and the foreclosure but, if you didn't exercise them then, they have probably all been cut off by now. Your right to redeem the property derives from the foreclosure action and the bank has no say in the matter(you would redeem the property but take it subject to the balance on the first mortgage and would have to pay that off), but that right isn't unlimited and, if you didn't exercise it when you were supposed to it may be gone.