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Thread: Signed loan for someone, they defaulted, is there any chance of help? New York

  1. #1

    Default Signed loan for someone, they defaulted, is there any chance of help? New York

    My question involves a mortgage in the state of: NEW YORK AND GEORGIA

    Im in a deep mess and it seems to be getting worse every time I try to fix it. I made this outline with questions at the end. I appreciate you taking out the time to look at it.

    March 2006 - My father, being in real estate, assisted me in purchasing an investment property that he promised to help me manage. I signed a contract on a single-family house in Georgia for $153,000.

    April 2006 My father told me he has a friend (AR) in New York who is need of a co-signer for a home loan (of $361,000) because his credit is bad, but he is working on fixing it. He suggested that while AR is putting down the down payment, I co-sign the loan that would further boost my credit and we have both of our names on the deed. AR would refinance the loan when his credit repaired within a year. With that condition, I agreed to co-sign for the loan. However, a few weeks later, my father told me AR cant co-sign because the bank wont approve the loan with his name on it. I questioned how I would get approved for over half a million of real estate within two months with a starting salary of $60,000 but My father reassured me that hell time the closings within two months of each other before the mortgages are reported to the credit agencies. At the end of the month I closed on the Georgia house with Bank of America, with a mortgage of $121,000 and a junior mortgage at (a much higher rate) of $22,000.

    June 2006 - At the beginning of the month, I closed on the New York house with Wells Fargo, with a mortgage of $361,000.

    AR moved into his home and made his payments of $3,100 directly to Wells Fargo. Meanwhile, I struggled to locate tenants for my Georgia property since I didnt live in the area and paid a majority of the mortgage out of my pocket. I was in a Masters program so took out additional loans to pay off the junior mortgage for the Georgia house. Periodically I would ask my father about refinancing ARs house he would continue saying not right now.

    December 2008 AR defaulted on his loan repeatedly. My father told me he doesnt want to be involved and it is solely my problem. (Background: My father has a history of gambling/money laundering/bankruptcies and so believe it or not, he has repeatedly screwed me over. Unfortunately, this time, I have a strong feeling that my father and AR had some unresolved financial dealings going on and my father used my credit as a way to delay paying him back and eventually hoped that he would forget about the loan.) So while my credit was getting ruined I tried to work with AR for the next year to let me do a short sale on the house. Even though I worked extensively with the bank on paperwork for the short sale, AR always stalled and NEVER let me show the house to prospective buyers.

    January 2010 - With the loan having been defaulted for over a year, I gave up on trying to contact AR and just hoped Wells Fargo would foreclose on the house so I could get it off my credit report after 7 years.

    August 2010 I started medical school and so do not have any further income.

    October 2010 I had problems with collecting rent from my tenants in Kennesaw for months in Georgia, where I was paying out my pocket. Once they stopped answering my calls and refused to open the door even when I visited, I gave up on that house too. I figured since the house value has dropped it wont lower my credit any more than it has already been hurt.

    February 2012 Bank of America sends me a 1099C(?), cancellation of debt for my Georgia property for the value of approximately $30,000 stating that the assessed value of the property is $88,000. I contacted the bank and they said the house is in the auction process but is not sold yet so I still may have the right to sell it. My balance on the property was probably around $123,000 which is what it seems to be worth. I also did some research and discovered than AR moved out of the New York house and has been collecting rent of about $1700 without ever telling me and never made an additional payment towards the Wells Fargo mortgage. My parents went to speak to AR and he refused to cooperate in any way. We sent an eviction letter to the tenants and AR , then scared, has agreed to hand over the deed to let me do the short sale.

    Questions:

    If I get a cancellation of debt from the New York house foreclosure, it is going to be much larger because he is over $100,000 in arrears in the last three years. My understanding is that I may have to report that as income but does it get cancelled out when I also report the loss on the same property? I believe that can be done, but only for primary residences so I would have to pay tax on the cancellation of debt from at least one of the properties. Is this correct?

    Since my credit is ruined so much, I looked into declaring bankruptcy but I have a savings account which has my parents savings in it and so do not want to jeopardize that so that is not an option. At the same time, Im afraid of these banks foreclosing and trying to come after me in other ways (1099s, liens on my savings accounts). Is this something I should be afraid of or will my all my savings and checking accounts in various banks be protected from these two creditors?

    Right now I have no incentive to deal with either of these problems, hoping they will just go away but they seem to be coming back to haunt me over and over again and I dont know how much worse it can get. (Probably a lot more.) Is it even worth it to go through all the effort now to do a short sale on both houses? I may avoid foreclosure on my credit report but the damage from 18+ months of default on the properties has already hurt my credit so much. Im not sure how much a foreclosure would hurt or short sale would help?

    Is there ANY way that I can have Wells Fargo remove the negative credit reporting? Possibly, with an explanation of the circumstances, or proof showing that it was ARs house completely, or that I should not have been approved for the loan to begin with or how about in exchange for me doing a short sale on the house so they avoid going through the foreclosure process?

    Also, do I have any chance of negotiating with Bank of America to do either short sale or modify my loan balance with them in exchange for removing their negative reporting?

    Id like to know if I have any chance at suing AR. I understand that I willingly signed the loan and that is my biggest a mistake. But Ive paid for it with so much: money, my credit being ruined, the mental stress of him being not being cooperative and finally him collecting rent on a house that technically we both own for over 3 years which he could have been using for possibly modified mortgage payments.

    I am unsure if whether or not I should take the deed from him yet. Because if he gives it to me, I can proceed with a short sale but then its my house, my loan and I feel like I cannot go after him for anything. At least right now hes a joint co-owner of the house on the deed.

    Also, would I be able to sue my old tenants for abandoning the property without ever paying me the rent. I dont have their social security numbers (did not write them on the lease), but I could probably locate them to serve them.

    I understand these are long shots but Im looking for some VERY creative advice on 1) getting out of this mess and 2) repairing my credit 3) recovering any of the damages Ive suffered.

    PLEASE HELP ME. I've been dealing with these issues for almost 6 years now and feel hopeless. I'm in medical school right now, getting married in 4 months and want to fix all this before I start my new life.

  2. #2
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    There was a duplicate thread of this post by OP in I believe general legal issues forum - I noted that as the duplicate (it is no longer there) & said to reply under this thread. drruthless I believe it was replied under this thread but the reply is no longer here. Don't know who deleted duplicate thread & post in this thread by drruthless.

    I believe drruthless said (among other things) to see an attorney which is probably the best bet with all the various "problems."
    Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around. Leo Buscaglia

    Live in peace with animals. Animals bring love to our hearts and warmth to our souls.

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    Quote Originally Posted by Betty3 View Post
    There was a duplicate thread of this post by OP in I believe general legal issues forum - I noted that as the duplicate (it is no longer there) & said to reply under this thread. drruthless I believe it was replied under this thread but the reply is no longer here. Don't know who deleted duplicate thread & post in this thread by drruthless.

    I believe drruthless said (among other things) to see an attorney which is probably the best bet with all the various "problems."
    I removed it Betty, I saw no reason to clutter up the board with duplicate answers ither.....

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    Oh ok - just wondered what happened. There weren't any answers under the duplicate thread - only this one by you when I saw the duplicate threads. There is another thread by OP but some what different than this one (doesn't have as many questions & not as long-not really a duplicate) that at the time I first saw it had no answers either. (does now) It was very early morning I believe when I saw first saw them all.

    The reason I left the duplicate there & made reference to this thread was for the OP's benefit - so OP wouldn't wonder where the thread went & would know where to look for any answers.
    Last edited by Betty3; 02-29-2012 at 09:05 PM.
    Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around. Leo Buscaglia

    Live in peace with animals. Animals bring love to our hearts and warmth to our souls.

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    Well, considering what you've said so far....

    Quote Originally Posted by scaredofmess View Post
    March 2006 - My father, being in real estate, assisted me in purchasing an investment property that he promised to help me manage. I signed a contract on a single-family house in Georgia for $153,000.
    and

    Quote Originally Posted by scaredofmess View Post
    April 2006 My father told me he has a friend (AR) in New York who is need of a co-signer for a home loan (of $361,000) because his credit is bad, but he is working on fixing it. He suggested that while AR is putting down the down payment, I co-sign the loan that would further boost my credit and we have both of our names on the deed. AR would refinance the loan when his credit repaired within a year. With that condition, I agreed to co-sign for the loan. However, a few weeks later, my father told me AR cant co-sign because the bank wont approve the loan with his name on it. I questioned how I would get approved for over half a million of real estate within two months with a starting salary of $60,000 but My father reassured me that hell time the closings within two months of each other before the mortgages are reported to the credit agencies. At the end of the month I closed on the Georgia house with Bank of America, with a mortgage of $121,000 and a junior mortgage at (a much higher rate) of $22,000.
    and

    Quote Originally Posted by scaredofmess View Post
    (Background: My father has a history of gambling/money laundering/bankruptcies and so believe it or not, he has repeatedly screwed me over. Unfortunately, this time, I have a strong feeling that my father and AR had some unresolved financial dealings going on and my father used my credit as a way to delay paying him back and eventually hoped that he would forget about the loan.)
    I have to ask, what did you think was going to happen? He has screwed you over before, and you let him convince you to co-sign a $361,000 mortgage?

    Quote Originally Posted by scaredofmess View Post
    October 2010 I had problems with collecting rent from my tenants in Kennesaw for months in Georgia, where I was paying out my pocket. Once they stopped answering my calls and refused to open the door even when I visited, I gave up on that house too. I figured since the house value has dropped it wont lower my credit any more than it has already been hurt.
    That's why I will have a property management company handle business when I'm renting.

    Quote Originally Posted by scaredofmess View Post
    Id like to know if I have any chance at suing AR. I understand that I willingly signed the loan and that is my biggest a mistake. But Ive paid for it with so much: money, my credit being ruined, the mental stress of him being not being cooperative and finally him collecting rent on a house that technically we both own for over 3 years which he could have been using for possibly modified mortgage payments.
    Yeah, you can sue. You can sue for just about anything in this world nowadays.
    I don't believe what I write, and neither should you. Information furnished to you is for debate purposes only, be sure to verify with your own research.
    Keep in mind that the information provided may not be worth any more than either a politician's promise or what you paid for it (nothing).
    I also may not have been either sane or sober when I wrote it down.
    Don't worry, be happy.

    http://www.rcfp.org/taping/index.html is a good resource!

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