Posted by dutch on September 27, 2006 at 15:19:03:
The assignment of the note sale should have been recorded in the county where the property is. If your attorney got his degree anywhere besides Wal-mart, he/she should be able to find the note owner pretty easy. As the foreclosing entity, he/she can get their payoff, fees, etc. easily.
Dutch
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What recourse do I have? - Posted by Gina Mackey
Posted by Gina Mackey on September 26, 2006 at 21:30:09:
Thank you in advance for your advice. I sold a home in Texas to a couple that was hard to finance. I carried them on a note for 20%, or $18K. They do not seem to be able to make the payments at $174 a month. They also will not respond to my calls. I live in California. What happens to my note if they foreclose on the first loan, and what if any recourse do I have to collect on the note. I am beginning to think that I made a very big mistake, and should have probably just threw my money off a bridge. Thanks – Gina
Re: What recourse do I have? - Posted by Sailor
Posted by Sailor on September 26, 2006 at 23:26:01:
I’d spring for a plane ticket & arrive on the doorstep w/out delay.
I like face-to-face. I’d ask them to come up w/a solution so you
don’t have to send them a 1099 for the entire balance, which w/
trigger the IRS into going after them for unreported income if they
fail to claim the 18k. Come prepared w/a new agreement for
signature & some choclates as a hostess gift. Be professional, but
nice–you are there to solve their problems, as well as yours.
LISTEN to their problems. It w/make them feel better & you might
better understand their dilemma & the best repair. By the time
you leave, you should know what else you might have to do.
These folks have figued our that you don’t need their $$$ as
much as they do, so you want the opportunity to disabuse them
of that notion. Good luck!
Tye
Re: What recourse do I have? - Posted by Gina Mackey
Posted by Gina Mackey on September 27, 2006 at 11:22:12:
Thank you for your advice about the 1099. We have been extremely patient with these people, and just wanted to give them a shot at home ownership, but they are in “hiding”, and I believe they know exactly what they are doing. Can you tell me what will happen if they foreclose on the first mortgage? Thanks!!
Re: What recourse do I have? - Posted by dutch
Posted by dutch on September 27, 2006 at 12:08:08:
Let me start off saying: this is my opinion, not legal advice.
As a lien holder, you can foreclose. If the 1st forecloses first, you have the option to buy them out and foreclose on their lien , or on yours. If you do nothing, you chance losing your 2nd. But for all the trouble you have, maybe that’s ok too. It will be costly to persue the 18K. Is it worth it to spend 10K to get some or all of th 18K? don’t forget to add in the PITA factor.
Best of luck.
Dutch
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Re: What recourse do I have? - Posted by Sailor
Posted by Sailor on September 27, 2006 at 12:02:12:
I am not an attorney, so recommend you get one who specializes in RE who is also local to the property. However, it is my understanding you can foreclose & take back the house. However, if the 1st forecloses, it appears to me you are SOL. I think you need both an attorney & a plane ticket because you are probably correct that they are avoiding you. However, they likely don’t know you can sic the IRS on them. Tell them or have your attorney tell them. You also need to check to see if the 1st holder has taken any action against them. This isn’t something you can put off another day, so start dialing, kid. Good luck!
Tye
Re: What recourse do I have? - Posted by Gina Mackey
Posted by Gina Mackey on September 27, 2006 at 12:43:09:
Thanks Dutch for your opinion, it is truly appreciated. Forgive me for being ignorant, what is the PITA factor? I guess I have learned a very valuable lesson at my own expense. I will definitely think twice before trying to help someone accomplish the American Dream. I will pursue a Texas RE Atty, what can I expect if I forclose first before the originating lender?
Re: What recourse do I have? - Posted by Gina Mackey
Posted by Gina Mackey on September 27, 2006 at 12:38:57:
Thanks so much for your advice. I have contacted a local Texas real estate attorney. The only problem I forsee is in obtaining information on the first loan, hence, the originating lender already sold it.
Re: What recourse do I have? - Posted by dutch
Posted by dutch on September 27, 2006 at 15:16:49:
PITA, my term for Pain In The A*s factor.
If you, as the 2nd lien holder, foreclose, then you will have to buy out the first, or, make an agreement with the 1st to leave their loan in place and you pick up the payments. Either way, they get their money.
So, in addition to your attorneys fees, you will have to make the 1st happy. Assume that the buyers are in default on that loan as well. The 1st could have some hefty fees, ie penalties, interest, legal, etc., same as you, only more because their loan is bigger. That is why I said you might spend close to your 18K just to save your 18K.
Foreclosures in Texas are pretty quick, unless they file bankruptcy.
Good luck.
Dutch
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