My house is foreclosed and the second mortgage turn the loan over to the collection agency. Should I respond back to the collection agency? Both

Asked by Worry, La Mirada, CA Wed Jan 13, 2010

loans were used to purchase the house and since from reading the Q&A, I'm not personal liability since I live in California. What should I do next? Pls advise

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Chris Jensen, , Pleasanton, CA
Sun Mar 14, 2010
Hi Worry,
You have a few different options. When did you receive the letter? Recently?
Procedure for COLLECTION accounts is that you should send them a Validation Verification request, in writing asap via certified mail return receipt.
Sending a Cease and Desist alone is a Bad Idea. Your telling them their only option is to take legal action...

By asking for validation they are required to validate the account.

While it is true that a 2nd loan may or may not be recourse, it also depends on the value of the home at the time of the foreclosure.

I am helping a client with this same exact thing right now. I am cerified with International Association of Professional Debt Arbitrators, I am knowledgable about both FDCPA and FCRA however this info is not legal ADVICE.

The reason you dont want to just send a Cease and Desist is, you could end up with a Default Judgement. There are several steps in between, but sending a Validation Verification request is extremely important to do as soon as possible. You can do this your self.

I am very happy to help if you want more info.

JoAnna Jensen
Certified Debt Negotiatiors
925 699 5041
Debt Settlement
Settle 2nd Mortgages, Equity LInes Etc.
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David Alex W…, Agent, Newport Beach, CA
Sun Mar 14, 2010
If your second was taken out at the time you purchased the home and you have never refinanced it you have nothing to be concerned about. You can get a free consultation from an attorney from the Orange County Bar by contacting them and in 5 minutes you will have your options. Maybe if they cause you some stress they would be paying you since you already lost the home and it appears that they are braking the law. Nobody said that second mortgage holders or collection agencies were intelligent. Hope that helps. If you need proof or copies of your original trust deeds and loans we could help you as well.
David Alex Wright
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Keith Manson-…, , Milwaukee, WI
Wed Jan 13, 2010
Scott had a good idea with putting the lender on notice not to contact you at home,cell and work because under the fair debt collection act, if you do this they can not call you. This notice to stop must be in writing. The bad part of doing this is that this forces them to start legal action if that is what they will do. The collection agency gets a huge commision for what ever they can collect so they will do what ever they can to get money. If you can get a free consultation from an attorney to explain your options, that would be great,

Get some type of help because they know what they are doing.

Keith Manson
First Weber Group
Certified Distressed Property Expert
Metro Milwaukee
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Scott Godzyk, Agent, Manchester, NH
Wed Jan 13, 2010
The first thing you should do is ask teh collection company for their fax number, then send tehm a letter requesting they do not contact you by phone at home, work or cell phone. Then once you have some peace and quiet form teh harrassing phone calls. You really should contact an attorney who specializes in real estate, at worst you get the 1st meeting free to see what type of advice they gove and what they can offer to do about it. Then you should check with teh CA bar as tehy may have a pro se (free) attorney who can help you. You may also check with the state to see what the state law is in CA regarding this. Godo luck with working things out.
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Shel-lee Dav…, Agent, Rolling Hills Estates, CA
Wed Jan 13, 2010

It is like adding insult to injury. First you lose your home to foreclosure, then a collection agency comes after you for the loan. The truth is you do not want to ignore a collection agency. They can get nasty and make more trouble for you than it is worth. Obviously, this is a legal question and there are few if any attorneys on Trulia. This is not legal advice, since I am NOT an attorney.

As a real estate professional in California, it is my understanding that all purchase money loans are non-recourse in a foreclosure situation. You should dispute the debt during the dispute period and let the collection agency know that this is purchase money. They may be counting on your not knowing anything about your rights and may try to bully you into paying something that you, most probably, do not owe. This is how they make their money, by collecting debts, whether legitimate or not.

Of course, when you send the dispute that might just put this to bed. The collection agency may acknowledge that under the circumstances you do not owe the debt. If they continue to pursue you, then your best bet at that time is to get legal assistance. There are legal advocate groups out there that may help you for no cost or a nominal fee. Look into such groups, many of which are non-profit. Hopefully this will go away smoothly. Dare to Dream.

Shel-lee Davis, CDPE
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty
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Joanna Jensen, Other Pro, Livermore, CA
Wed Jan 13, 2010
I am sorry about this situation. I always wonder how other realtors settle 2nd loans. It depends on the value of your home when it foreclosed. If there was no vale to the 2nd loan you should contact them and make them go thru the entire debt settlement process.

I work for an attorney and that is what we specialize in. I am happy to be of servce or answer questions. this is something you should respond to quickly to at least dispute the debt and ask that it be validated with out admiting to anything. Do it by mail certified letter return receipt dont make phone calls they may try to harass you and collect. This is not legal advice. We have the Fair Debt Collection Practices Act on our side!!! We just need to use it.

JoAnna Jensen
Legal Assistant
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, ,
Wed Jan 13, 2010
I would contact your agent and ask him if he correctly did the paperwork, see if they can assist you. If not, then I would contact a lawyer or a reputable credit repair company. These will obvioulsy cost you money.
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