Need Legal Input- Short Sale Nightmare!

[stevemia]

Closed on an investment short sale in Fl in 3/10. Bank would not offer letter of non-deficiency but my atty & realtor both spoke with bank and they assured there would be no deficiency.

I agreed to sign a note with the PMI company on closing as well.

Bank reported to credit bureaus:" LEGALLY PAID IN FULL FOR LESS THAN FULL BALANCE OWED".

My attorney made me handwrite a statement on the bottom of the acceptance letter: "I am accepting this short sale with the intention that no deficiency judgement will be pursued." and I signed it. The short sale letter was accepted by the bank and they never mentioned that it would be a problem. He says it now becomes an "unconventional" waiver of deficiency by bank.

Now, Im getting calls from a collection company. Called bank and they told me they assigned it for recovery to them. I never received a demand from the bank, though. I called PMI company and they told me that they reimbursed bank 25%. Bank wrote off the entire amount though. PMI company told me that these collectors are attempting to get whatever they can and that as long as the bank hasn't demanded the proceeds directly, that I should disregard.

My lawyer made up a Debt Validation letter for me to send the collection agency, Oxford Management. He seems to feel that the bank accepted my terms in an unconventional manner as well by not rejecting my handwritten statement on acceptance. He also says that Chase approval letter never mentioned fact that they could or would pursue deficiency and that since this now an unsecured loan, that they will not get a nickel from me. He also claims that "legally paid in full" means just what it is reported. He will work the case if they attempt a judgement but he feels again that they are attempting to intimidate me.

Please give me feedback as I am a bundle of nerves now that this has happened. Thanks!

[Denita]

Quick question: is this for a first or second mortgage that Oxford is attempting to collect?

[stevemia]

This is for a first, thanks

[Denita]

Seems to me that you are in a very good position right now, but I'm not an attorney. Seems your timing could not be better given the fraud accusations/proof that JP Morgan Chase has been accused of recently in Fl and around the nation.

You have completed a short sale and you have documentation from the sale that the payment was "legally paid in full for less than the balance owed". You have an attorney. Chase is on the front page of the business sections everywhere that they have commited fraud in their affidavits while foreclosing properties. At least one title company (Old Republic) won't insure a Chase foreclosure due to the fraud. Now today another title company in Fl won't insure Chase titles. You have evidence that your PMI co paid on 25% on the account in accordance with the PMI agreement. Now you have evidence of them selling the debt to a third party collector to collect on a balance that Chase has reported to be legally paid in full.

If it were me, I would document everything in writing. Make sure to send your denial of the debt, stating the "...paid in full..." to the collections agency. Then when your documentation is sufficient - go after both the CA and Chase.

If your attorney is reluctant because he wants to wait until an actual judgement - find out if this is because the judgement 'proves' damages to you or if he is reluctant because he is not a litigator, just a real estate attorney. Most real estate attorney's limit their practice to paperwork type transactions and do not litigate. So you may actually need a different attorney to persue this on your behalf. IMO its worth doing. Good luck.

[stevemia]

PMI company tells me that this is the first they heard of Chase seeking non-deficiencies on closed short sales, especially due to the fact that a provision of closing was that I sign a note with PMI company.

Seems like everyone is very ambiguous at Chase when I call them and Oxford has the incorrect amounts due.

I have a debt validation letter ready to be mailed although I never received anything in writing, just many calls from collector, Oxford Management.

Don't know if the debt validation will expediate the situation or make it worse?

I thought this was over with.

[bubbaboo]

Did the mortgage documents you got say that they were conveying clear title or did it say that it was subject to a lien? Did you get title insurance showing clear title?

It all depends on what the written documents say. Forget about verbal statements. They mean little when put up against a written document.

The collector may just be trying to scare you into paying.

[creditidol]

Remember the banks can not prove they have the original notes so a peon second holder wont either.

Get aggressive with them and send them a letter of intent to sue next for all the Fed violations....

[stevemia]

Does I request this letter from the original lender, Chase, who closed the short sale, or from Oxford, the vendor that the charge-off was assigned to?

[stevemia]

Remember the banks can not prove they have the original notes so a peon second holder wont either.

Get aggressive with them and send them a letter of intent to sue next for all the Fed violations....

Could you explain this..that the banks can not prove they have the original notes?

Original refi took place 12/07 with WAMU and then Chase took over. Isnt it too soon for them to lose the paperwork?

[WhoCares1000]

No, look up MERS and the process on how that works. As soon as the note is entered into MERS, the paper version is destroyed leaving only the electronic version. However, the electronic version was not kept track of as well as it could have been.

[stevemia]

I just checked MERS. They still have the original 1st and 2nd which is not correct as I did a refi in 12/07 with WAMU (turned over to Chase).

Any other place I can look?

[Guest usctrojanalum]

Mers is a nightmare.

[stevemia]

So where do I found out who owns the note or if Chase even knows where it is?

[WhoCares1000]

So where do I found out who owns the note or if Chase even knows where it is?

You are now beginning to see the problem banks are having with foreclosures. No one knows who owns the note or even if a note exists anymore.

[stevemia]

So where can I find out who owns the not?...Maybe its Chase?

Its not on MERS and I checked with FannieMae and FreddieMac

[WhoCares1000]

Again, that is the issue. No one knows who owns the mortgage. MERS is suppose to know but guess what, they don't. Chase is suppose to provide a note upon demand in court but guess what, they provide a motion to the judge to allow them to foreclose without the note.

If you remember, the banks did a moratorium on foreclosures because of this issue. The moratorium however simply saw the tip of the ice berg. There are still may structural issues with mortgages from the heyday of the mid 2000s that still need to be resolved, MERS is one of those issues.

So again, you probably will never be able to find out who really owns the note. However, that may be helpful should you end up in court over a deficiency balance because you can demand that the produce not only the short-sale contract but the original note. I am going to bet that in the end, they will give up on you if you put up a small fight because right now, the last thing the financial system needs are court decisions which are binding in regards to mortgages that are adverse to them.