If my morgage send me to collection what happens? Can they take my current property?

Asked by K Arreguin, Modesto, CA Wed Feb 4, 2009

I'm losing a home to forclosure and my lender is sending me to collections, I've never been in collections and don't know how it works. Before I stopped paying I called them for help but they didn't want to help now that I can't pay they are harrassing me for there money what do I do?

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The Hagley G…, Agent, Pleasanton, CA
Wed Feb 4, 2009
Who is your lender? The site below may provide some useful information. Shoot me an e-mail and tell me more about your property...I may be able to help you.
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Steven Ornel…, Agent, Fremont, CA
Wed Feb 4, 2009
Hi K, this is not legal advice, for legal advice consult a Real Estate Laywer.

I'll fast forward and assume that you have attempted the suggestions that Blaison has provided below and that the lender has in fact sent you to collections.

You first have to determine whether your loan(s) are classified a recourse or non-recourse loans. You will need to find your Promissory Note, not the Deed of Trust, to check this out. The Promissory Note may or may not specifically state whether your loan is non-recourse, so for the formal definition please review questions 4-6 of the document found here:

If I was in your situation and my loan(s) were non-recourse I would be hard pressed to pay the collection agency a dime, and I would send them a certified letter informing them of the debt's non-recourse status and that if they continue to call you legal counsel will be contracted due to their harassment.

Best, Steve
0 votes
blaison samu…, Agent, Santa Clara, CA
Wed Feb 4, 2009

Sorry to hear about your situation. Collection people are worse, they just harrass people to get their money, they dont care about your hardship. But you have choice, try to do loan modification if you have the financial capability else you have to sell your house short (Short sale)

Did you get any notice of default(NOD)? After you get your 3rd notice of default then there will be a trustee sale where the bank is authorize to auction your house to the highest bidder.

Did you try for loan modification or short sale? These are some of options to avoid from foreclosure. You need to talk to an experienced realtor in short sale or loan modification so that you can fix this problem either by modify the loan or sell your house. Talk to a CPA or tax attorney for tax implication if you are planning to sell your house. Let me know if you need any help.

Blaison Samuel
Certified Short Sale Specialist
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