I have a friend that lost 4 investment properties during the boom. 2 of them were fianced thru National City and they were sold over the summer. Now he is getting threatening phone calls that they want to settle for about 50% of the outstanding balance. They told him they will do an asset search and go after him.
I thought banks can not do this? I do not know anyone getting harrassed by the banks after foreclosure. I did ask my CPA about this when I went to get taxes done and advised my friend can file BK if they go after him as a last resort since one home is in his company name. But one is in person name, though they are not calling on that one yet., I am sure it will in time.
Question… Does he have anything to really worry about with banks going after his bank accounts??? He has some cash in bank.
What the bank does it take the house back and sell it for what they can get quickly. They then go after the borrower for the difference between what they got for the house and what the borrower owes. That is why you NEVER let the bank take the house. You negotiate giving it back. You have to be in control of the process.
As far as your question about the cash in the bank, it almost assuredly is at risk. But it depends on the state laws. In the sate of Texas creditors cannot take your primary residence (except for lien holders), retirement funds (IRA, 401k, annuity, etc), means to go back and forth to work (your car), tools of your trade (clothes, computers, lawnmowers and almost everything else). They can get your rental houses but they are in second position behind the mortgage company. So all you are at risk for in Texas is any cash you may have. Most people have the majority of their cash in mutual funds etc that are in retirement vehicles. So they can’t get much from you. So in Texas the only reason people file bankruptcy is that they don’t have backbone to deal with bill collectors harrassing phone calls. This is another reason that I can’t understand why anybody would, on purpose, live anywhere but Texas.
Yep banks can get a deficiency judgement against you to make up any difference left owed.
Now to my knowledge they can take you to court for a deficency judgement but can not really go after your money per say. I am in FL, also a homestead state so primary is safe, which is why OJ made Fl his home. We were so proud, it gave Miami-Dade police something to do besides looking out for Cuban and Haitian Immigrants.
But my friend as well as I , feel the bank is trying to strong arm him and is using scare tatics to extort money. Funny thing is, while in foreclosure they never called him once. House was listed for SS but never sold since was preconstruction and not completed because builder disappeared while building 100+ homes…
Have your friend move their property into a real estate trust that they are the beneficiary of. When the lender goes to do a search, you’ll often come up hidden. This assumes he has different lenders. Good luck.