Would they Foreclose?

[CarolinaBlueEyes]

I need help here gang... lol this one is over my head. and please travel with me, its a little confusing.

I have an elderly neighbor who has had some health issues (she is not on disability however). back in 1995 or 96 she took out a second mortgage on her home with a company that sold it a few times (it was one of those 125% mortgages).. she had paid on it but it was sold(and the company went belly up).. for some reason she didn't pay on it for two years, then five years ago a company got a hold it.. in the meantime she got another second mortage (from what I can figure out the first company did not file at the courthouse).. she now she has three.. her first and the second second (I know this is confusing) is current however the one she did not pay on for two years she is now making partial payments on .. and here is my question (if you have followed this so far.. LOL)

They called her last week for the first time.. her statement reflects its two years behind.. they want her to start making full payments, which she can't afford. They also asked her to write a letter to explain her health issues for their files so when the investors look at it they can understand why the payment are partial. (she said they were very nice about it)

How likely would they be to foreclose.. she does have the equity at this point I believe.. and they didnt file which means they are not on the property. (which I know they can still probably do, but would be third according to NC law )

I am thinking if the payments are over two years behind and she is making an effort if they would have wanted to foreclose they would have done it by now... but someone told me second and thirds its rare in forelosure because of cost..

I know this is a confusing post but any light would be terrific, she wants to continue making this partial payments but her balance keeps going UP after these as well... but is worried about losing her house.. I really don't think its an issue but I want to make sure... thanks for any insight you may have on this.

[rtedgar]

I would think that the chances of them forclosing is slim to none ( in fact, I dont think they can) because the first mortgage is up to date and the first mortgage holder is the primary (the one that would get paid first). I think more than likely what they will do is put a lien on the property for the amount that she owes in the hopes that if she does sell it (or dies and it goes into an estate), they will get paid before the title can be transfered.

[CarolinaBlueEyes]

She just came over a little while ago, they are now asking her for financial information and have sent a sheet.. its pretty basic and simple.(they are not on her credit report btw I checked)..

Not sure if she should fill this out. Again its not super detailed but not sure what the purpose of this is... they also sent a sheet of her payments.. she has paid them with the oral agreement (her payment was 620.00 a month and for the last few years she has been sending 350.00 a month..

what can happen here.. ?? Can they try to make her pay more (she said she can't) and I did find out in NC that its first come first serve.. she has two mortgages on the property and they never filed here.. they still can at any time of course but then they would be third in line.. I just want to tell her not to worry about losing her house but I don't want to lie to her either.

Also they dont seem to be a mortgage company (they dont lend) but collect on them, but i am sure they have attorneys for foreclosure , I , of course am guessing .. oh help here.. lol thanks

[Rick9972]

My mother is 75 years old and I fully understand how your neighbor could get confused with multiple sales of her loan. Now if she is like my mother she has kept every piece of paper mailed to her for the last 20 years.

I would see if you could track the changing service companies and see if she was properly notified as to where the payments go and to whom.

Secondly, try to quietly go on a fishing expedition and see exactly what paperwork the current company she is paying has. I have heard and read that over the last five years the paperwork has had a tendancy of not following the loan.

Not sure where this will take you but at least this should give you a firm foundation of information to continue to work on.

[CarolinaBlueEyes]

My mother is 75 years old and I fully understand how your neighbor could get confused with multiple sales of her loan. Now if she is like my mother she has kept every piece of paper mailed to her for the last 20 years.

I would see if you could track the changing service companies and see if she was properly notified as to where the payments go and to whom.

Secondly, try to quietly go on a fishing expedition and see exactly what paperwork the current company she is paying has. I have heard and read that over the last five years the paperwork has had a tendancy of not following the loan.

Not sure where this will take you but at least this should give you a firm foundation of information to continue to work on.

Thanks.. her records are good and I do have the chain where the loan followed.. three lenders including the one that originated it.. and I have a strong feeling the documents are with the company.. I did the fishing most of the afternoon , these companies seem somehow tied together., and the first one filed chapter 11, then gave it to #2..same issue.... then the name of this last one didnt bring much on google but when I compared addresses with a slimy second tier lender who is on her credit report... and put the initials together.. BINGO.. its the same company just the buy and sell division under another name.. so I dont know if this means anything.. but they did notify her , she simply didnt pay for two years on it.. said she couldnt afford it after her husband died got behind on one and two but those are now current. I am not sure why but they never sent her a note, notice.. nothing.. and she said once she felt she could give them something she contacted them to do the half payments which they took.

the slimy company did show up on her credit report but has not reported since 2002 and its delinquent, but nothing else regarding this loan shows up after that.

I also found they filed bankruptcy a few months back, but I am sure are on the way back.. again not sure if it affects this division.. but it might be why they are strong arming more.. Also the company that invested in them pulled out as well. (I felt like Nancy Drew today) its fun to see how the pieces fit together)

I have no way to know if they have the paperwork but I have a strong suspicion they do.... when I did a net search all these of these groups seem to be linked in some way shape or form. Again not sure what that means but I am more concerned as to what that means for her. All she wants to hear is they wont take her home.

[Rick9972]

We are witnessing the reincarnation of Nancy Drew!!!!!

You are probably right, that they all were connected. Banker friend told me about a shell game that sounds very similiar to what you just described.

For a test if she is paying PMI or eschrow thru this loan. Ask for the origanal contracted amount for PMI specified in the origanal documents. Give some bogus reason. Or if her taxes are being paid thru the loan, ask for proof of payment for one of the early years. *shrugs*

My personal opinion is that with them setting in third spot, with todays market conditions, they are happy to be getting anything. Unless the house has alot of equity growth, probably nothing would not be left for them if they pushed foreclosure. Thus logically they set back and see what happens. Then we all know that most of the time banks do not act logically, so that leaves us where? LOL With the same question you asked to start with.

[CarolinaBlueEyes]

We are witnessing the reincarnation of Nancy Drew!!!!!

You are probably right, that they all were connected. Banker friend told me about a shell game that sounds very similiar to what you just described.

For a test if she is paying PMI or eschrow thru this loan. Ask for the origanal contracted amount for PMI specified in the origanal documents. Give some bogus reason. Or if her taxes are being paid thru the loan, ask for proof of payment for one of the early years. *shrugs*

My personal opinion is that with them setting in third spot, with todays market conditions, they are happy to be getting anything. Unless the house has alot of equity growth, probably nothing would not be left for them if they pushed foreclosure. Thus logically they set back and see what happens. Then we all know that most of the time banks do not act logically, so that leaves us where? LOL With the same question you asked to start with.

LOL OH yeah thats helpful!!!

Actually no, her escrow is through mortgage 1 and she has no PMI.. they sent her a payment history which was accurate..

the house has a tax worth of 206,000 but in this area they sell for more like 185-190,000. Her first has 90,000 due the second has 48,000 due , I dont know what that means , what the lawyers charge.. etc so I am not sure thats enough escrow for them to take a stab or not.. again your best guess is welcome. Her loan on this third is 50,000 but they say she is 37,000 due in payments... with late ees, interest.. etc.

and I wonder to second tier lenders or second and thirds foreclose on properties.. I know primary ones do.. but this two year thing keeps coming up in my head... why wait two years? Well five if you count the half payments she has made for the last three years.