My friend just called me up screaming and do not blame him and banks are closed till Tue to get answer…
Here is what happened.
He logged onto his online account to pay bills and noticed Bank Of America just autodebited $10,000 and the descripton says Charge Off Account with some letters. It was done Friday. He of course is livivid. His saving account had about 15K in it and his checking act has about 2K in it. BOA had bought the servicing a 2nd note last year for a mortgage. Plus with countrywide merger they must of gotten his other one that foreclosed too.
He has several accounts with them, some are not even with just his name but his parents name as primary b/c if they fall ill he can handle there bills at there age.
Do banks have authority to just take the money even though loan and account is same bank?? This seems like something that would require court order or gov’t intervention. Any info please on this matter…
I know banks can go after foreclosures but that has to be done in court. This did not happen at all. He get phone calls but still nothing like this, he simple reply he can not pay back loan. He said loan balance was around $60K.
Actually BOA is what help up him doing a S/S last year since they would not deal.
I first heard of this back in February of this year…it is apparently called “off-setting.” According to my source (I don’t have concrete verification of this), banks are even checking with each other and will take any monies listed under your SS number if you default on a mortgage or are in foreclosure. I was told that they were also trying to have this ability with credit card accounts also.
Yes it is called Off-Setting as he recieved a letter 1 week letter and that was the term used,
After talking to several lawyers, the outcome is this.
Do not bother trying to sue, despite the fact that you may win the case, the bank will do a counter suit for the remained of the loan and will win. Therefore you will not get your money back and will have a judgement for the rest.
Of course the banks will have to produce proof they can take the funds which will be the signature card which all banks have you sign and states they can take money to OFF-SET any personal guarantee loan.
After speaking to my CPA, his advise is to no longer bank in your personal name if you have a foreclosure. He recommends opening up a C-Corp which will cost less than $100 in most states and placing the funds in a business checking account and savings account. This will prevent banks from accessing your personal money. The corp will simply file a no activity return each year.
He also mentioned (at least in Fl you can) when you create the corp online with sunbiz.org site, put 2 names on the corp, yours and a fictititous name. Once your banking is set, remove your name so you have no ties to the corp if the banks do a search.
Yes, with the computer era now, it is becoming easier and easier to find assets, so at same time we need to learn how to hide them.
Also becarefull if your bank gets bought out by a bank you owe money. Pull the money ASAP as they can go after it.
As for banks going to other banks, not sure. I did check with my local bank, I deal with BoA and a small bank only located in Fl with many branches. They told me no other bank can access their accounts without court order but then again, things change…