| T.R | Title | User | Personal
Name | Date | Lines |
|---|
| 449.1 | Funny you should mention it... | NODEX::BRASS | | Tue Apr 13 1993 13:47 | 32 |
| Hi,
I went to the seminar last night and it was interesting to say the least.
The following is my own words or interpretation of what happened and you should
check with your own lawyer for accuracy.
There was a case heard by a federal bancrupcy justice in Mass. I forget her name.
She ruled that If the value of a piece of property has fallen below the
loan amount then the portion of the loan above the value of the property is
considered unsecured debt(just like a credit card). If you file a chapter 13
bankruptcy then the unsecured debt can be erased and a payment plan set up to
pay back at least 10% over five years. The actual legal name of the ruling is
"cramdown".
The lawyer who had the radio advertisement and seminar is making his services
available to go to your bank and basically waive this ruling in thier faces while
he negotiates with them to give you a better deal on your morgage ie: lower
interest rate or whatever. If they do not comply then you file a chap 13. The
cost is $1000 for bank negotiations and another $750 if you have to file
chap 13.
The only problem I have with the whole thing is that this particular lawyer
really trivialized the whole process. I talked to two other attornies that
believe there is a lot more risk involved then what he mentioned , for
example he stated that if you filed chap 13 you would go before the justice
that made this ruling and she would find in your favor, when in reality(according
to another lawyer) you could see one of 4 justices and they can rule differently.
I believe he also stated that they cannot take away your house but according to
another lawyer they can take away your house. You just have to check for yourself.
Also his prices may be a little high.
Hope this helps.
Bob
|
| 449.2 | Just my opinion ... | MPGS::BEAULIEU | | Wed Apr 14 1993 10:53 | 8 |
| If ever the saying "he knows enough to be dangerous" applied to
anybody, it applies to this so called "lawyer". By following this guy's
advice a person could potentially lose their house , their good credit
rating (bankruptcy doesn't look good on your credit report), AND $1750
(plus whatever this guy charges to get you out of the mess he made when
you followed his advice). What's really sad about this whole thing is
that he WILL get people to try this and most likely it will be those
that can least afford it that he will take advantange of.
|
| 449.3 | | ZENDIA::SCHOTT | | Wed Apr 14 1993 13:39 | 5 |
| The radio ad is very deceptive. It comes across like this is
a bank wanting to lend money to people. I'm sure no one would
show for his seminar if he mentioned that you had to file
Ch. 13, etc
|
| 449.4 | HOW can this happen in AMERICA ? | CSLALL::RCALLAHAN | Roberta Callahan | Wed Apr 14 1993 15:30 | 30 |
| After reading your memo I wanted to check this out - I have been
attending an appraisal course so I asked my instructor. Basically
he said all cases are different and that the best approach is to go
to a REALESTATE Attorney that you trust or that has been referred to
you and discuss your options if you find yourself in this situation.
It is important to understand that banks can call in "any" mortgage
that exceeds the "market value" of the property. In essence the
asset that was guaranteeing the loan no longer has value enough to
cover potential defaults. The other key point is that this can
happen even though you are "making regular mortgage payments" or
even when you are applying extra principle to the loan. It is based
strictly on the relationship between market value and loan amount.
According to scuttle butt > the likelihood of this happening even to
people that are excellent performers (paying their mortgage) is very
great over the next 18 months, because the government makes up the
bank's losses when they execute this option. Often the government
agency forces banks to execute this option to improve the banks
financial position. After 18 months the government will no longer
do this for banks (Savings and Loan bailout Program).
Your losses are not deductible from your federal income taxes as a
loss either. If you are forced into bankruptcy they can take
everything you have, savings accounts, investments, IRAs, 401Ks,
everything except your company pension funds. By the way you will
owe income tax money for earlier withdrawals from your IRA etc. too!
Hang in there - it seems real "UNAMERICAN" to me but that's what
many of us are facing ! ! ! Guess we were asleep at the stick !! !
|
| 449.5 | The word "VULTURES" keeps coming to mind | MPGS::BEAULIEU | | Wed Apr 14 1993 16:49 | 11 |
| It never ceases does it! As usual, the losers in all of this are the
consumers and/or taxpayers. It is appalling that a bank would be allowed
to foreclose on someone who was making regular mortgage payments and then
collect the loss from the TAXPAYERS because they made a bad investment.
Not only that they are potentially ruining someone credible in the
process who also made a bad investment but who is willing to pay for
his mistake himself and doesn't have the option of having someone else
pay for it. Not only that but considering the number of mortgages out
there that would be "eligible" for this "program", the results of the
banks taking this kind of action on these mortgages would be
devestating!
|
| 449.6 | Forgot to mention..... | MPGS::BEAULIEU | | Wed Apr 14 1993 17:31 | 14 |
| Forgot to mention that the WORST part of this whole mess is that the
very same government whose actions (or lack thereof) caused the
mortgage values to go down in the first place would be the ones who
would encourage the banks to take this action by generously offering
the taxpayers money to offset the losses! It is unbelievable that
they think they can strengthen the banks by wiping out the assets of so
many people! Then this generous government, after they have forced the
bank to wipe out all of your assets will continue to TAX you on your
loss! (I guess this would be necessary so that they will have enough
funds to pay the bank)!!!
Hopefully, this will not happen to anyone. As for me, I would still
hold on to my $1750 for now until we see how it goes!
|
| 449.7 | It's been happening | MARX::SULLIVAN | We have met the enemy,and they is us! | Thu Apr 15 1993 10:58 | 16 |
| > Hopefully, this will not happen to anyone. As for me, I would still
> hold on to my $1750 for now until we see how it goes!
>
Sorry, but it's been going on for quite awhile. I have seen several reports
over that past two years about small businesses, with perfect payment and
credit records, who were forced out of business by this very scenario.
I heard about most of them about a year ago when banks were being closed
and taken over by the FDIC in large numbers. For example, when the Bank
of Boston folded, there were many small businesses that were forced to
go out of business when the bank/FDIC assuming the mortgage called them
in.
Mark
|
| 449.8 | Continue to use caution | MPGS::BEAULIEU | | Thu Apr 15 1993 13:55 | 16 |
| I didn't realize that it had already started but I don't doubt it one
bit (it just reeks of typical government logic). I would still, however,
be very leery of this person who is holding these seminars. I suspect
that he may be attempting to instill fear into people unnecessarily and
then "cash in" on this fear (and possibly open up a can of worms in the
process). This guy knows that there are a great many people out there that
are holding one of these mortgages (almost anyone who bought in the late
80's with only 5 or 10% down for example). He should not be encouraging
people who have not even been served with a foreclosure notice to pay
$1000 for him to go in and threaten the bank and then file bankruptcy if
the bank doesn't comply with his demands!
Any person faced with a foreclosure notice needs the assistance of a good,
competent lawyer to represent him and good competent lawyers do not
need to scare people into hiring them. They also can address your specific
case and give legal advice based on your personal situation. Their fees
are also based on what services they render on your behalf.
|
| 449.9 | can anyone confirm this? | ROCK::EDMONDSON | | Tue Apr 20 1993 19:04 | 14 |
|
Is this really true? Can someone confirm that the bank can call
any personal home mortgage if the loan balance exceeds the
property value? Everyone I talked to believes differently.
>>>>>It is important to understand that banks can call in "any" mortgage
>>>>>that exceeds the "market value" of the property. In essence the
>>>>>asset that was guaranteeing the loan no longer has value enough to
>>>>>cover potential defaults. The other key point is that this can
>>>>>happen even though you are "making regular mortgage payments" or
>>>>>even when you are applying extra principle to the loan. It is based
>>>>>strictly on the relationship between market value and loan amount.
|
| 449.10 | | SOLVIT::REDZIN::DCOX | | Tue Apr 20 1993 21:38 | 10 |
| It all depends upon the wording in the contract for the mortgage. If
the contract permits calling the mortgage, they can - as long as they
meet all of the conditions. If the contract makes no mention, their
action is un-enforceable.
But then, I suspect the VAST majority of mortgagees have never taken
the time to read all of their contract - nevermind read it BEFORE
signing for the morgage.
Dave
|
| 449.11 | Hide the guns and the piano | 29067::J_OPPELT | decolores! | Sat Jul 23 1994 16:45 | 27 |
| .4
> Your losses are not deductible from your federal income taxes as a
> loss either. If you are forced into bankruptcy they can take
> everything you have, savings accounts, investments, IRAs, 401Ks,
> everything except your company pension funds. By the way you will
> owe income tax money for earlier withdrawals from your IRA etc. too!
Most of this is accurate except that if the real estate is
an investment property instead of personal residence, you get
to take a capital loss, and (at least in Colorado) 401K's are
safe from bankruptcy.
A small amount of equity in a car is also allowed ($1500 in
Colorado. Your mileage may vary.)
They also don't barge into your house and take the clothes out
of your closet and the toys from your kids' playroom. They WILL
make you declare specific valuable items like jewelry, musical
instrument, collectibles, antiques, guns, and you have to make a
listing of the contents of your house (room-by-room furniture, for
instance), but you are allowed a reasonable amount of personal
property, and unless your stuff is all brand new, it most likely
will fit under the personal limit.
They won't take your wife's engagement diamond.
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