Home Foreclosed - Law Firm pursuing full amount of second loan

[needdebthelp]

I purchased a condo in Oakton, Virginia in 2008 (80/20 loan) with CountryWide which later became a part of Bank of America due to personal and financial issues in 2011 I was unable to make payments on the mortgage and started to pursue the option of short-sale. My realtor had an offer from a buyer to purchase the property for ~$185k. Bank of America was negotiating saying they wanted ~$200k and possibility of me paying the $15k to make up the remainder. All of a sudden a day before the auction date Bank of America cut off any negotiations and would only accept a contract for ~$200k with only a day turn around we weren’t able to find another buy to stop the foreclosure process and the property was sold at auction for $175k.



A year or so after my foreclosure we had a law firm Frederick J. Hannah & associates come and try to claim the money for the second home loan I sent them a letter saying the house was foreclosed on and to prove the debt was indeed mine. They went away and sold my debt to Drew Eckl & Farnham, LLP. When i sent them the same letter requesting proof of debt owed they sent me a certified document with the loan documents and the interest that has been building. I didn’t take any action and didn’t hear anything from them until this year where I received a letter saying that they will be exploring the possibility of litigation and want me to provide the following items by January 25th.

Summary of assets
Current Income with supporting documentation
Most recent bank statement
Income Tax return
Hardship letter

Also I received a settlement from the national mortgage settlement that my Bank Of America illegally didn’t allow for loan modifications and/or illegally foreclosed on my home. My question is I know there is legal precedence in Virginia especially about them coming after the second loan in case of foreclosure but if I was paid through a settlement that my house was illegally foreclosed on can they/should they be able to still come after me for debt owed if that debt was created illegally in the first place?

In terms of my personal situation I have been unemployed for a year and don’t have any assets to speak of really. My car is in my dads name, i live at home with my mother, the only thing i have that can be considered an asset is my 401K which i would also like to know if they could have any access too or if that is protected.

Any help would be greatly appreciated and I think we can really beat this with your help. I really don’t think they should be able to collect on a debt that I was paid a settlement on that was taken from me illegally (per judgement), I wonder if there is any opportunity to counter sue and should I have received more money than the $1,480 from the settlement, if I have no legal leeway then try to get as low a settlement as possible, and worse case scenario bankruptcy.

Also can a law firm in Georgia have jurisdiction over a debt in Virginia?

 

[LdiJ]

I purchased a condo in Oakton, Virginia in 2008 (80/20 loan) with CountryWide which later became a part of Bank of America due to personal and financial issues in 2011 I was unable to make payments on the mortgage and started to pursue the option of short-sale. My realtor had an offer from a buyer to purchase the property for ~$185k. Bank of America was negotiating saying they wanted ~$200k and possibility of me paying the $15k to make up the remainder. All of a sudden a day before the auction date Bank of America cut off any negotiations and would only accept a contract for ~$200k with only a day turn around we weren’t able to find another buy to stop the foreclosure process and the property was sold at auction for $175k.



A year or so after my foreclosure we had a law firm Frederick J. Hannah & associates come and try to claim the money for the second home loan I sent them a letter saying the house was foreclosed on and to prove the debt was indeed mine. They went away and sold my debt to Drew Eckl & Farnham, LLP. When i sent them the same letter requesting proof of debt owed they sent me a certified document with the loan documents and the interest that has been building. I didn’t take any action and didn’t hear anything from them until this year where I received a letter saying that they will be exploring the possibility of litigation and want me to provide the following items by January 25th.

Summary of assets
Current Income with supporting documentation
Most recent bank statement
Income Tax return
Hardship letter

Also I received a settlement from the national mortgage settlement that my Bank Of America illegally didn’t allow for loan modifications and/or illegally foreclosed on my home. My question is I know there is legal precedence in Virginia especially about them coming after the second loan in case of foreclosure but if I was paid through a settlement that my house was illegally foreclosed on can they/should they be able to still come after me for debt owed if that debt was created illegally in the first place?

In terms of my personal situation I have been unemployed for a year and don’t have any assets to speak of really. My car is in my dads name, i live at home with my mother, the only thing i have that can be considered an asset is my 401K which i would also like to know if they could have any access too or if that is protected.

Any help would be greatly appreciated and I think we can really beat this with your help. I really don’t think they should be able to collect on a debt that I was paid a settlement on that was taken from me illegally (per judgement), I wonder if there is any opportunity to counter sue and should I have received more money than the $1,480 from the settlement, if I have no legal leeway then try to get as low a settlement as possible, and worse case scenario bankruptcy.

Also can a law firm in Georgia have jurisdiction over a debt in Virginia?

I really think that you should take that information to a local attorney for review. Unfortunately its going to cost you some money but I think that there is a better than decent chance that this would all go away with a strongly worded letter from an attorney. However, the alternative would probably be to file for bankruptcy, which would be just as expensive, if not more so. I do not think that you are going to get any more money out of anyone, the issue is to make sure that no judgment gets entered against you for the shortage.

 

[FlyingRon]

I don't know why it should go away. Virginia is a recourse state. Even if the first illegally foreclosed, the second still is entitled to their money. They can send scare letters if they want to force the issue they will need to sue on the promissory note. They most likely will succeed if they bother to do this (though absent any security and ability to pay it's unclear if they will).

Demanding they "prove anything" to you doesn't mean much until it's they actually bring the suit.

 

[needdebthelp]

I don't know why it should go away. Virginia is a recourse state. Even if the first illegally foreclosed, the second still is entitled to their money. They can send scare letters if they want to force the issue they will need to sue on the promissory note. They most likely will succeed if they bother to do this (though absent any security and ability to pay it's unclear if they will).

Demanding they "prove anything" to you doesn't mean much until it's they actually bring the suit.

I think from what I read that these debts/loans get sold in bulk and one person found out that their not was bought for as little as $1 therefore if they find out that if they come after me I have nothing to give it might convince them to drop it..but I don't want it to carry on and worry about them popping up every year. My plan was to send a hardship letter with no mention of money or settling and see what their response is. Best case scenario I can make it go away by settling for something as low as 1% but not sure if not only choice is bankruptcy I suppose.

Someone suggested to tell them instead of paying any money I have for a lawyer I can offer that to them instead but the majority of the advice has been not to mention any money or settling at all.

I really appreciate you guys taking the time to read this...it's been a very stressful situation and any response helps!

 

[FlyingRon]

Well, if you don't want to answer the questions so we can give a more involved answer, good luck to you.

 

[needdebthelp]

Well, if you don't want to answer the questions so we can give a more involved answer, good luck to you.

I'm sorry FlyingRon must've missed your question...but reviewing the posts I don't see any actual questions that I didn't answer.

Your statement was that the debt is owed because Virginia was a recourse state and that they will most likely succeed if they try to but my lack of assets might make them not pursue..so please let me know what question you had that I didn't answer.

Thanks

 

[FlyingRon]

Is there equity in the house over the first mortgage?

 

[needdebthelp]

Is there equity in the house over the first mortgage?

Nope no equity whatsoever. House price plummeted and was sold at a loss