I talked to a seller today whose lender would not take a check that would get them completely caught up! I mean, they’d pay for the attorney fees, lates fees and everything!
The lender basically told them they will not take a check and that they are going to take the home as REO. Is that wierd or what?
So, does anyone have an idea what is going on here?
Not weird - just plain old hard-headed, slobbering-at-the-mouth stupid. Maybe the lender doesn’t read the paper…?
Keith
This usually happens when you aren’t connected with the right people/department at the bank. You may have landed in some customer service or collection agency limbo where they cannot take payments but are only able to process a foreclosure. You need to dig deep and find the actual bank/insurance co that owns the loan.
It may help if you send financial statements and a letter of “intent to cure default” as well as “request for loan modification.” Send the letters and financial documentation to EVERYONE - the servicer, the bank, the originator of the loan, etc. The act of placing written correspondence in the hands of the bank changes your “status” with them and you will be routed to a department with more significant power over the loan.
The other option is to send a wire or certified bank check to the lender. You have to send it according to the instructions in the default letter. Once they have cashed the check or have reciept of the wire, HO is technically caught up and the loan would be kicked back to a different department from collections. When you follow up by phone, ask to speak to a supervisor or get their responses in writing or by fax each time if possible.
Ford Motor Co. did that to a friend of mine. He was about 3 months behind. He called them to pay the past 3 months plus the current month and they told him to forget it and the next day his truck was repo’d. They sold his truck at auction and he ended up owing an extra $8,000. Basically he ended up having to file bankrupt over that deal
It is always best to consultant someone who knows about loan modification if you cannot get through your own bank… Many times, there is more paperwork involved tahn the average homeowner wants to deal with.
OOOHHHH…Douchbags. (The banks, not you guys)
There are a couple reasons why they would not accept. My first guess would be that they do not accept personal checks once the property reaches a certain point in the foreclosure process, sometimes as soon as the NOD. They do this because it is standard practice for homeowners in default to attempt to pay their debt with a bad personal check the closer it gets to the auction date. This of course will delay the auction and cost the bank more time and money when the check bounces. My thought is that if you have the money in the checking account to cover the amount you are writing the check for then you can put it in a form other than a personal check, such as a cashiers check or money order. Often you can obtain wiring instructions from the lender to wire the money directly to them rather than mailing. The wire fee is generally less than $20.
Another reason they refuse the payment is because they believe the homeowner will go in default again and they will end up at the same place they already are. The mentality is generally that they will make more money on the property reselling as an REO then if they try to keep it alive with the current homeowner only to default later.
I’m going to have to disagree with the collection agency idea. Any company who services foreclosures will have a collection service as well. Part of servicing a foreclosure is not letting it go to foreclosure if at all possible. Now, that’s not to say that some servicing companies suck at their jobs and only focus on getting the property through the sheriff sale. The letters to everyone concerned is a great idea though. Let everyone know you have the money and you are trying to pay and that your payment is being refused.
Legally speaking a lender can not refuse to accept payment in full. They can refuse partial payments, but not full ones. I would strongly suggest keeping detailed records of the conversations with the whom ever you are dealing with representing the lender. When the property goes to Sheriff sale and is foreclosed upon there may be grounds for legal action toward the lender and/or their representative servicing company.
If it’s not too late and the homeowners want to fight it then I would suggest contacting the lender again and pushing the matter. It is only too late if the right of redemption period has expired. In states that do not have a RoR period it would be the sheriff/trustee sale. I can tell you from personal experience that some lenders will force foreclosures for one reason or another. When it comes right down to it, the person you are dealing with on the banks end is over worked and under paid. Their level of importance is measured by how many files they process, not by what the out come of each it.
I do agree with Jvogler that hiring a consultant or mediator is a good idea if one, the home owner can afford it, and two the homeowner wants to fight to the end. If they have the funds to pay the debt in full then this should be a very simple task for an experienced bank negotiator. cough cough
GooD LucK! :beer
In New York and New Jersey, a homeowner has the right to redeem their property up to the moment of sale, if they can come up with the fees, interest, late charges, etc. It doesn’t matter whether a bank “thinks” a homeowner may end up in the situation again. They don’t have the right to make this call. Most likely, the bank will not accept personal checks, and requires certified funds.
This is a perfect example of why you don’t try and mitigate or modify your payment with your lender on your own. This is your home, not your Lawn Mower. Either you keep your home, keep your big screen TV, keep your furniture, or you wing it and send in a payment that your bank will not accept and they WILL take your home.
You should always consult a professional with the proper know how and expertise. I am hearing enough horror stories about people trying to send in payments, ask for lower interest rates and the like and then going right back into it 5 months down the road… If you want to save hundreds of thousands of dollars each month, on the most important investment you own, do it the right way. Consult a professional!!
After all, it’s only your home.
Hey!
Thanks for sharing your ideas guys! I feel you can always go to a counseling agency for your foreclosure issues. You can also find different websites that aid you to overcome foreclosure in addition to these books. Having a thorough knowledge of how to deal with foreclosure will help you to a great extent.
Another reason they might not accept payment is that you could be dealing with a servicing company. They get paid to process the loan payments, process the foreclosure, etc…
Processing foreclosures are a profit center for them so they tend to be impossible to work with. Do an end-around and find out who the actual bank is, contact the Loss Mit. dept and get the payment to them. They should accept the payment in full to reinstate.