Tri Counties refuses to release our 2nd lien for a short sale under the HAFA program. Do we have to foreclose rather then short sale?

Asked by Susan Larg, Santa Rosa, CA Wed Jan 9, 2013

Wells Fargo has approved us for HAFA with $8500 going to Tri Counties Bank and $3,000 to us for relocation. The 2nd lien was included in a BK in 2009, Ron is demanding we drop out of the HAFA program and pay them $19,492 and that he would not allow us to get the $3,000 and he would only approve 5% commission for agents. Ron Scribner at Tri Counties Bank has told us to let it foreclose if we don't have the money. Which we don't. We have a buyer but Ron has given us no choice but to let the foreclosure go thru.

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7
Keisha Mathe…, Agent, Elk Grove, CA
Wed Jan 9, 2013
Susan, I've read your individual responses to the agents on this thread (my apologies for the late response - the system does not alert us when there is a "comment" directly under our reply). Do you have an attorney involved? It's time to get one involved, either your bk attorney or a real estate attorney.

Below is a recommendation. They will give you a consultation which will involve a resolution to your issue, for $200.

BPE Law Group, Inc.
Main: 11140 Fair Oaks Blvd., Suite 300, Fair Oaks, CA 95628
Satellite: 9245 Laguna Springs Dr., Suite 200, Elk Grove, CA 95758 (Appointment Only)
(916) 966-2260

Since you are in Santa Rosa, it may serve you better to find someone out there. Perhaps call BPE and see if they can refer someone local to you. It's definitely time to get some legal guns on your side.

My best to you, and don't give up, stay persistent. This deal makes sense, Tri Counties Bank does not.

Keisha Mathews, REALTOR®
CDPE®, HRC®, HAFA® Certified
"The Short Sale Lady"
Century 21 Landmark Network
(916) 370-1803 cell/direct
(916) 405-3886 fax
keisha.mathews@century21.com
http://www.SheSoldItForMe.com
lic#: 01439130
0 votes
Vinh Hoang, Agent, Sacramento, CA
Wed Jan 9, 2013
There are so many directions to resolve this issue and all of the advises provided are valid. At the end of the day, the job of a negotiator is to play hardball and try to minimize his company's losses. Our job is to work in the best interest of our clients and try to meet our client's objective -- take the necessary steps needed to close the deal so our clients can move on with their lives.

Luckily, in the past I have worked with great realtors that did not mind giving up a small percentage of their hard earned commission to meet the negotiator's demand. At the end, all sides were happy, escrow closed, and we have just secured ourselves a trusted and loyal customer. That is priceless.
0 votes
Sue Archer R…, Agent, Palm Harbor, FL
Wed Jan 9, 2013
If you don't mind, I'd like to elaborate a little more on the legal rights of the second mortgage in a bankruptcy. (and the answer to YOUR situation should be addressed by your attorney).

If you filed a chapter 13, the attorney would have most likely argued that the second was now a non-secured loan and should be included with the other debt that is paid off over 3-5 years through the trustee. At the end of the term of your bankruptcy, and you are discharged, you are suppposed to recieve a reconveyance. However, often the BK attorney will need to file a motion to compel them to do that...the bank's are lazy that way. The reconveyance removes the lien from their recording a lien and would allow you to short sale without the second loan. But until those 3-5 years are up, you're in what i call the 'extortion department' and you need to negotiate with them to get a short sale approved.

If you filed a Chapter 7, the second is not likely removed especially if you reaffirmed the debt. For any collateralized debt, such as a car loan or a mortgage, many people believe the debt was 'wiped off', and from an attorney's point of view it is. You won't receive another bill from them and you don't have to pay the debt. HOWEVER, that doesn't remove their right to reclaim the collateral as part of the original loan agreement. You can have your car repossessed, or your home foreclosed.

Call your bankruptcy attorney to understand where you are in relation to your specific bankruptcy. But the best action is still to try to call the executive offices of the bank. They don't get anything if you foreclose, and this Ron guy is probably incented in his job assignment to play hardball. You need to try to get to someone above him.
0 votes
Ir was a chapter 7 and was not reaffirmed. We have written a letter to all 9 board of directors but have not received a reply. Trying to find someone between Ron and the Board. Another agent in Roseville is having the same problem with Ron and we can't figure away around him.
Flag Wed Jan 9, 2013
Ron Thomas, Agent, Fresno, CA
Wed Jan 9, 2013
The 2nd Lien to TriCounties was obviously NOT included in the BK!
It would not be haunting you.

Something else is wrong; $8500 is a healthy pay-off for a 2nd; why won't they accept it?

They must feel that they can bleed you for the $19,492 for many years.
Considering the pit you have dug for yourself; you could offer them ~$5,000 additional to sign, in a NOTE for something every month.
They have you where they want you!
0 votes
Yes it was included in the bk. They want us out of HAFA and have the agents pay the difference between $19,492 and $6,000 which Wells Fargo would give them if it is not in HAFA. and then we do not get the $3,000 for relocation. This guy will not budge. He just keeps saying let it go in to foreclosure where he knows they get zero. They know they can not come after us for it and HAFA will not allow even the agents to pay some of it since $8500.00 is the max per the govt. There is another agent in roseville having the same problem with Tri Counties. No one will tell us if there is someone above him. We have written letters to the Board but no response. At first they verbally agreed to $8500 since they still have a lien on the property but when we went into escrow it got transferred to Ron and he said no.
Flag Wed Jan 9, 2013
Keisha Mathe…, Agent, Elk Grove, CA
Wed Jan 9, 2013
I've been here before-- a similar situation with Sacramento Credit Union, they didn't want to release (seller ended up filing bk, then SCU wanted to accept terms but it was too late). It is a very unfortunate situation.

The credit unions and smaller banks have stockholders to account to so they are not in the business (that the rest of the world is in right now) of granting short sales. Too much at risk for them, every dollar counts.

An exception to that would be Golden 1 CU, they are great to work with.

However, I do have a question for you, if the second was included in the bk why are we having this discussion? Seems to me you have recourse and need to have a chat with your bk attorney. Unless I'm missing something...


Keisha Mathews, REALTOR®
HAFA Certified®, HRC Certified®
"The Short Sale Lady"
(916) 370-1803
#01439130
0 votes
It was a chapter 7 so can not be stripped. You are right about asking why the discussion. They know if we foreclose they get nothing but that's what they told us to do. We are trying to find out if there is anyone above Ron Scribner other then the Board of Directors (we have sent certified letters to them) but haven't heard back from.
Flag Wed Jan 9, 2013
Gary Meek, Agent, Antelope, CA
Wed Jan 9, 2013
Escalating is the only option you have. It pays to have a good negotiator working your short sale. Some agents are good at what they do and others are great. My short sale person has been able to negotiate a first, second, HOA, IRS and state tax lien all on the same property. It took her about 5 months to put the whole thing together where others said it was not possible, there were too many working parts. Best of luck.
0 votes
Thank you. We have sent certified letters to the 9 board members but so far no response. Escrow is suppose to close 2/1. Foreclosure date of 2/4 by wells fargo. Tri Counties agreed to the $8500 verbally at first until we got an offer and the papers got moved up to Ron Scribner. My agent cannot find away around him and neither can an agent in Roseville that is having the same problem.
Flag Wed Jan 9, 2013
Sue Archer R…, Agent, Palm Harbor, FL
Wed Jan 9, 2013
In any negotiation, you need to understand the motivations for each party. Tri Counties does not have to participate in HAFA if they are not part of the original banks given TARP money, or some other federal regulation forcing their participation. They don't HAVE to accept any of the terms. This seems to be one of those situations where stronger negotiations are required.

It may take escalating to the executive level to get a final decision from this lender. He maybe financially incented to play hardball, or it could be executive policy, who knows? But if he isn't budging, maybe escalating the issue might help. OR you may need to accept his terms of no relocation and a reduction in commission. OR it may be one of those circumstances where a short sale will not come together.

There is no guarantee that a lender will accept less than what is owed on a loan that is in default. And they are not required to do so, although receiving nothing (in a foreclosure) isn't in their best interest either. Essentially, after a bankruptcy and before a reconveyance is released, you are working with the 'extortion department', as i like to call it, to allow you to short sale the home. They play hardball and they have nothing to lose.

Last, if your bankruptcy was a chapter 13, that argued to strip the second from the house, and the Bk was discharged, your attorney can sue for the reconveyance and you don't even need to talk to the lender anymore. i assume that isn't your circumstance.

Best alternative is to accept his terms or escalate to a higher level in Tri Counties to see if you can get any movement in his position. Good luck!
0 votes
Thank you for your response. It was a chapter 7 BK. Also with agents chipping in and we giving up the $3,000 means we need to drop out of HAFA since $8500 is the max for 2nd. Wells would then only pay $6,000 to 2nd leaving a balance of $13,492 which is to much for agents and we have no money. There is another agent that is having the same problem with Tri Counties. No one can get above Ron Scribner. Ron has told us to let it go into foreclosure and he is aware they will get nothing. Before showing home someone below Ron ageed to the $8500 but not in writing. Frustrating.
Flag Wed Jan 9, 2013
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