Need Help - Bank Threatening Foreclosure
I have a property that I took over subject to and bailed out of back payments a few months ago. Washington Mutual accepted the back payments and has accepted 3 payments since. Now, they are calling the loan due because the attorney that accepted the payments alerted them to the transfer of ownership (no, I didn't put the property in a land trust).
I sold the property when I made up the back payments with owner financing and have a wrap mortgage on the property with most of my profits. The current owner will not be able to get refinanced for 9-12 months.
Any ideas on how I can get the bank to stop the foreclosure? Is there any case law on the subject?
Calll the bank, tell them everything is current and your making the payments. Tell them that if they continue to foreclose, you'll stop making the payments.....and you should. Why continue to make the payments when they are threatening to take the house. Stand your ground, don't budge. Threaten them, "Look, I'm making the payments, what more do you want....but if you want the house back, let me know when you want me out and I'll just keep all the money I'm getting every month...and I can't guarantee what type of shape the house is going to be in when you get it back." Compliments of Ron LeGrand. Stand your ground and see what happens. I would really love to hear how this one turns out.
Yes, I agree with the stand your ground factor but what do you do with the t/b in the house?At what point do you try to move them? I don't see a forclosue continuing, but have you ever delt with WA/Mu?
Sire
LOL...my mother is a Branch Manager. I talk to her all the time about the DOS, she doesn't care who makes the payments, she just wants them made. The less money that is out, the less her commission is and oh boy, that's not good for her or over all sales, the company, the district, and the list goes on and on. Tell them, the T/B, "hey look, the bank is acting funny and are threatening to foreclose...I'm going to fight them but you may have to move in the future if they continue to act up. Keep paying and we'll continue everything as planned and if you do have to move, I'm going to find you a another house."
You don't have a whole lot of options, but to stay strong
get a lawyer and file a suite based on a tangible benefit this can stop the forclosure it on, this only cost $50.00.It will also cause the case to be investigated that way you let the judge know that you've been working at a solution all this time.
OK, I agree that you should try to get the bank to stop the foreclosure with threats or whatever you want. If it works then go out side and yell Yeeeee-Haaaaa!!!!!
But what if they don't? What will you do?
You need to start planning for that and part of the plan shouldn't be to abandon the property and move your Buyers. You need to work a way to to protect your seller (you did promise to make the payments, right?) and your buyers (to whom you have sold the house.)
Start working a refinance NOW! Sell your position to someone. You have to remedy this even if it cost you money.
You knew that this was a possibility. This is a risk that we know about, take and should be prepared to correct when necessary.
Hang on! Is the bank REFUSING your money? Have they actually sent your payment back, or have they just sent you a letter? If they've actually REFUSED to take your payments then I would start defensive manuevers, as suggested here, although I think it would be difficult for them to convince a judge that they were being hurt by you making the payments.
If all you've gotten is a letter demanding full payment, I would just keep sending the payment as planned. As long as they accept it, there is an even smaller chance that they will be able to complete a successful forecloser.
Keep in touch with the them and if they stay there course, get Counsel for yourself. You should be able to weather this.
Good luck.
[addsig]
The simpliest solution here is to refinance the property into a loan of your own. IF the value of the property is enough, you'll likely not have any out of pocket expenses, and likely due to the current low interest rates, will have the same or better cashflow as before.
As far as some of the advice given, yes you could either stop or continue payments, threaten the bank (hah) or not. It really doesn't matter. IF the lender wants to actually forclose they can. The DOS clause gives them this right. It doesn't matter how long they've known, or not known, about the transfer, and it doesn't matter how long they've accepted your payments or not.
If you're planning on buying Sub2, this is always a possibility, however slim, and the investor should be aware of, and have a way to remedy the situation. Again, the simpliest way to do that is to refinance the property.
Roger
Like raj said, the best way to avoid your situation is to refi the property into your name (if you can) or have someone else do it for you.
When doing a sub2 deal you should always have a plan B, C and D (just in case)
The sad part is when you record the transaction, that lets the world know that the property changed hands (some lenders may, and some may not do anything)
If there was a way around the recording process of the sub2 deal or how to better set it up - you could have a lease agreement set up with your seller and technically the lender can't really do much as long as the seller has occupied his property for at least 1 year and the lease is not more than 3 years and it is not a lease set up to sell the property afterwards (like a lease option) you being the sub2 guy/gal can do the lease and sub2 agreement as two separate instruments with your seller and have the right to sublease to your future t/b. If the lender tries to inforce the DOS, just send them a copy of the lease agreement (that should shut them up)
I'M NOT TRYING TO BE AN ATTORNEY HERE...JUST SOMETHING TO SHARE!!
Look into something called Laches, Waivers and statues of limitations (not a pro on the subject but it has to do with the time a person/company has to start a suit against you and if they don't start it by a certain time, they can't file suit. Also, the sellers situation has changed since the signing of his/her mortgage docs, thats why they were behind in the first place...so something should help with that scenario...
It might only apply to certain states, but check with your attorney for more info.
Take care~
First, please tell us what State.
Please tell us, have they filed and noticed a foreclosure
Have they just sent a letter informing you of their desires to call the note.
Given those answers We the inmates of TCI will properly advice you. But we must have this info.
WashMut. Interesting, somebody could lose their job over this one.
The Atty who received your payments, just what was his position in the transaction.
Very interested cause at the meeting I was at the other day, the decision was hands off unles a really naughty act had been committed and a complaint had been filed with a government agency a real estate board or the bank.
Oh yes what is the interest rate and period of time on the existing Mortgage and how long has it been in existance.
Hurry, Lucius
I'm not clear. Has WaMU sent a letter threatning foreclosure or have they actually initiated foreclosure???. It the former is the case, just keep sending in the mortgage payments (on time-please), if it's the latter than the only sensible alternative is to refinance.
If you want to fight WaMu in court be prepared to spend about $40k+ in attorney fees. Your tenant buyer may not want another house. She may want what she bargained for so put some money aside for another potential lawsuit.
I really appreciate all the advice.
The property is in Arizona. The attorney sent a demand letter last month. I contacted WaMu about it and they told me that they knew nothing about the letter. I wrote back to the attorney who responded with another demand letter stating that WaMu had instructed them to move forward and that they would no longer accept payments. My deadline to pay off the loan is 11/30 before they start the foreclosure process. I contacted WaMu again and they still claim to know nothing about it.
WaMu has accepted 3 consecutive on-time payments since they accepted the back payments I made to bail it out of foreclosure when I bought it. The attorney sending the demand letters now is the same as the one who accepted my back payments in August.
The whole situation makes no sense to me except that the attorney is fishing for fees.
I'm working with several mortgage brokers in search of an option to get the new owner refinanced, but his credit is pretty bad. I do not want to refinance the house myself and I don't intend to spend the money necessary to defend this in court. My goal is either to get the new owner refinanced or to get WaMu (attorney) to back off and accept the payments.
This confuses me. You refer to "the atorney who accepted the paymnts". Why are you sending the payments to an attorney rather than directly to Washington Mutual? If he was the trustee on a prior foreclosure it made sense to send the catch up payments to him, but the ongoing payments should be directly to Wa Mu. Is that where you're sending them?
Yes, sorry for the confusion. The back payments were made to the attorney. The ongoing payments have been made to WaMu.
I would continue to send the payments to WaMu as if nothing had happened. I have a friend who had a similar confrontation and the bank tried to scare him but did not follow through.
In the mean time, you might try to finance it 30 percent down - where they look at the property and not the person.
Good luck
Wamu is a huge orginization. The local attorney sending you the letter most likely has been contacted by Wamu foreclosure group. The attorney has a fee at risk and he will want to get all teh fees he can out of the case. The customer service department who you most likely are talking to may have no knowledge of what is going on in the foreclosure department. Wamu has many foreclosure they are dealing with nation wide and will not move very fast responding to any inquiry that goes thru the foreclosure department. I know of buyers who have mde offers on Wamu foreclosed or pre-foreclosed properties and have not received a reply for weeks. You may have more time than the attorney leads you to delieve.