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Is There a Lawyer in the House?


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Hello Everyone,

I am a newbie and I need some good lawyer advice.

My situation is the following: 160K 1st, 40K 2nd, Listed Price 62.5K

I live in CA and own a rental property in AZ that is upside down. I have a 1st and 2nd mortgage and the 1st will foreclose and wipe out the 2nd. I attempted to offer the 2nd 10% of the remaining balance and it was not accepted. Any suggestions besides BK as a course of action how to be proactive and not be liable for the full balance. What are some things the

2nd lender will do after the foreclosure and how should I respond? What is the minimum amount a lender would accept in this situation?

All suggestions are greatly appreciated. Thanks in advance.

Calvin

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I take it the 1st will not be going for a deficiency judgment. You have $200K in mortgage on a house worth 67K?

If that is correct and 1st is NOT going to go after you for a deficiency judgment....

I say let them wipe the second out. When the second sues, it will, in essence, be unsecured debt. Make them prove it up.

You could probably find a good lawyer for the $4000 you offered them to defeat this.

There is a good chance they don't have the note. A lot of people are having success using the "produce the note" strategy.

If they can't produce, you have better leverage to negotiate with them.

If they do produce...well you can always BK 13 their a$$. (you get to keep everything and force them into payments.)

Just my take on the limited info

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To trueq

AZ is is like CA that it's a non-recourse state and they can cancel the debt and issue a 1009-C. If this is incorrect please let me know. I wanted to consider all options except BK if at all possible.

My son actually signed for the loan but I made all the payments and reported the property on my tax return.

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second will probably not sue you. They will sue your son, if he signed the note.

Can your son reasonably declare BK?

Naturally, you want to keep family relations in good order. See what you can get second to negotiate at. They should be happy to get 20K. Borrow that from a credit card. Get your son out of the picture on this issue. Default on that credit card if you can't pay it, and 6 months later that credit card will probably take 30 cents on $, which is near the original 10% offer.

Its not the most ethical suggestion in the world, but this is a tough situation.

Default on one of the scummy banks that made you bail them out like Citigroup or Bank of America. I have a personal dislike for Capital One.

If you need more suggestions on which banks to screw, let me know.

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Is your son on both mortgages or just the 2nd? Are you both on the deed?

My son actually signed for the loan but I made all the payments and reported the property on my tax return.

You might have more tax issues than a 1099. You need an attorney.
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My son is on both mortgages and we are both on the deed. What other tax issues do you think we might have?

And who is disclosed as being the resident? Is the property disclosed to the lenders as a main residence or as a rental property?

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