Category Archives: Uncategorized

Foreclosures and What on Earth does “In Personam” Mean Anyway?

1 Reply

I get to sue a mortgage company.  That always makes for a good Monday.  Here are the facts.  Woman files for Bankruptcy.  She gives her house back to the lender in the Bankruptcy.  She moves out and moves on.  Lender has to obtain clean title to the house, so the Lender files a foreclosure action.  Lender screws up.  Lender is getting sued. 

The rest of the details.  Yes, at least in Oklahoma, the lender is supposed to foreclose on the house; but the lender is only supposed to seek a judgment against the house — or, to use the fancy, Latin, legal phrase — in rem (against the property).  Instead, this lender filed its foreclosure action and sought a judgment in rem (against the property), but also sought a judgment against my client, or in personam (against the person).  So, this foreclosure petition is asking for the property AND the right to pursue my client for money if the house doesn’t sell for enough to pay the total amount due.  That is the problem.

You see, when my client filed for Bankruptcy, she got a discharge.  A discharge is the reason you file for Bankruptcy.  It is what gets you out of all that debt that caused you to file in the first place.  A discharge is a Court Order that means that none of the people that the Debtor owed money to at the time that the Debtor filed for Bankruptcy can ever try to make the Debtor pay them again.  That means no collection calls, no bills in the mail, no nasty letters, no lawsuits and NO in personam liability in a foreclosure. 

Sure, the foreclosure needed to be filed.  In the Petition it should have mentioned the Bankruptcy filing and then said that the lender was seeking the property only, and not seeking a personal judgment against my client.  This one didn’t do that.  Some weeks I really like Mondays. 

Elaine

 

 

Why How Your Insurance Company Pays Claims Should Matter

1 Reply

Ok, this isn’t my usual debt related kind of post; but here goes.

Wednesday night I was rear-ended at a stop light on the NW Expressway.  In all honesty it was more understandable than that.  The sun was in just the wrong place to see the light change.  Nonetheless, I stopped; the woman behind me didn’t.  The back of my car was pretty badly crunched, and the front of hers was a real mess.  Anyway, I discovered soon enough that her insurance policy was in a family member’s name, the car she was driving was her husband’s; and all of this makes sense when you realize that she doesn’t have a driver’s license.  She did have a State ID card.  Yes, she does have a couple of DUI convictions.  Why do you ask?

Anyway, the next morning she calls me to tell me that she has called it in to her insurance; and she needs two additional pieces of information:  my home address (I had given her my office) and my insurance policy number.  That didn’t strike me as the kind of thing you make up, so I assume that she called it in.  I reported in to my insurance company, just like my policy requires.  Then, I waited for her company to call me; and I waited.  Finally, I called her agent’s office.  They had no clue what I was talking about, so I gave them all relevant information.  They were going to have the claims office in Enid call me; and they did.  A man called to say he was returning my call and who was I and what did I want — basically.  Once again, no clue that there has been any communication on this claim.  So, today I get a call from their National Claims center who didn’t know who was driving, didn’t know if I was hurt, didn’t know the make or model of my car or even if it was drivable.  At this point I am starting to lose my cool with what I am now calling the Larry, Moe and Curly Insurance Agency.

So, my instructions now are to take my car to their approved body shop for pictures and an estimate.  They have a location near my house and one near my office, but they are only open Mon-Fri.  So, I get to take off work for them to appraise my car.   Then, I can have them fix it or I can take it someplace else and have it fixed.  Oh, that assumes that they are going to allow the claim.  They haven’t made a decision yet, because they haven’t spoken to their insured yet.

Now, maybe it is just the bleeding heart defense lawyer in me; but I would think that if I were that company’s customer I would expect that they would be a little more proactive in protecting me from a lawsuit involving an unlicensed driver with 2 DUI convictions.  I have been annoyed at the runaround they are putting me through, but I have been appalled at how little effort they are making to protect their own insured.

So, the next time you go to buy car insurance.  Give some thought to how the company treats the people their insureds hit.  You could be preventing your own lawsuit.

Elaine

Sheriff’s Sale Pricing

2 Replies

I have been watching the bidding habits at Sheriff’s Sales lately.  The first thing I noticed was that I thought some of the appraisals were a bit optimistic.  Then, I realized that Sheriff’s Sales sale prices are higher than market.  Yep, read that one again.  Sheriff’s sale prices are higher than market.

So, who are these lucky bidders who are paying more than appraised value and well above market rate for these houses?   Why, the mortgage companies, of course!

The most extreme example is a case I was watching where the property was appraised at a whopping $16,000 — probably a pretty fair price, actually.  That means bidding opened at around $11,000.  The mortgage company wound up with it — for $87,000+.  No, that is not a typo.  That is extraordinary, but I am seeing fairly regularly the major mortgage companies bidding up to the total amount of their judgments, even if that is more than the property is worth.

Without getting into why on Earth these companies are doing this, to me, as a consumer lawyer this means two things:

1.  No potential for additional liability against the former home owner; and

2.  The possibility that if the mortgage company has improperly padded their judgment amount (and yes, I think it has happened), then, the home owner might be able to force the mortgage company to actually kick back a little cash — would kind of like to try this actually.

Elaine

FHA Loans and Loss Mitigation

Leave a reply

It occurred to me after I put up the post about VA loans, that not all servicers are complying with FHA requirements either.  So, if you have an FHA loan, that loan is in foreclosure, about to be, in default or just in trouble; you probably want to read the FHA rules for loss mitigation (i.e., how mortgage servicers are supposed to deal with loans in trouble).

The FHA regs are also on my website.  Check out the Foreclosure page, left hand panel, towards the bottom.

As usual, I don’t do mortgage workouts.  If you need help, contact someone who has been trained by the FHA as a mortgage counselor or a lawyer who is well-versed in FHA regs.

Elaine

VA Loans and Foreclosures

Leave a reply

I do not represent people in loss mitigation negotiations involving mortgage loans.  I do, however, represent people in Bankruptcy who frequently are having problems with a mortgage.  So, I see a lot of mortgage issues.  One thing that I am seeing a distressing amount of is people who have a VA mortgage, get into trouble, wind up talking to their mortgage servicer and are never offered VA loss mitigation procedures.

I am not claiming to be an expert on VA loss mitigation.  However, if I had a VA loan and I was having trouble making the payments; I would be reading two things.  One is a 30-page publication put out by the VA called their Servicer Loss Mitigation Program.  The latest version I have found is dated July, 1997.  If anyone finds a newer one, please let me know.  In the meantime, you can download a copy from my website’s Foreclosure page. You will find a link to it in the left-hand panel towards the bottom.

The other thing that I would be reading is essentially a memo put out by the VA describing the “VA Making Home Affordable Program” dated January 8, 2010.   I found this at the VA’s own web site.

If you have a VA loan, are having trouble making the payments and are getting workout or mitigation procedure communications from your mortgage servicer that don’t include the words “Veterans Affairs” or “VA”, you need to contact the VA or somebody who knows a lot about VA loss mitigation.  Make sure that you are getting everything you are entitled to as a Veteran with a VA loan.

Elaine

I Love Creditor Calls

Leave a reply

I just got a call from a creditor asking if my client was going to reaffirm a debt secured by some personal property. I asked if they were offering any concessions, like a reduction in interest rate, in exchange for the reaffirmation agreement. The creditor’s rep. said that no, they only agree to a reduction in interest rate in Chapter 13’s, not in Chapter 7’s.

She didn’t get why I was laughing. The only reason they “agree” to a reduction in interest rates in a Chapter 13 is because the law requires it. They can either go along (or “agree”) or get sued for contempt of court and violation of a confirmation order. She really thought that this was some magnanimous deal her company did of its own free will for people who filed a chapter 13.

Creditors — you gotta love ’em.

Elaine

Bankruptcy, It Ain’t Always the Answer

Leave a reply

I spent a long time on the phone this afternoon with another lawyer.  His client has a lot of complicated problems.  At least one of those problems is a very aggressive creditor who wants a lot of money from the client — and is doing a pretty good job of going after what it wants.

Anyway, my point was that a bankruptcy filing would solve nothing; and, frankly, it would really create more problems for this guy than he already has.   Now, part of the problem is that there were businesses involved.  Frequently, small business owners consider a bankruptcy filing without really understanding how the business will (or in many cases won’t) be affected.   When a bankruptcy isn’t the solution is a complicated question, and the only simple solution is not to be afraid to call a good Bankruptcy lawyer and ask.  Be up front asking if there is a fee for that consultation.  There wasn’t in my office today.

Elaine

Office Practices

Leave a reply

Several times in the last few weeks I have only gotten important phone calls because I happened to be home during the customary workday.  Two of these calls were from health care providers.  The third was from a heat and air contractor.  Neither of the three would admit to having any contact number for either my Husband or I other than our home phone number.

That is a seriously bad business practice.  Now, granted, I only get a basic contact number from someone when I am setting an initial appointment; but two of the three of these phone calls came from people with whom either my Husband or I had an existing business relationship.

Well, not anymore.  Two of the three have just lost our business, and I am giving serious thought to how best to insure I maintain good contact information with all of my clients.

Elaine

Check Scams

Leave a reply

If you have an email account, you have probably already been targeted for some kind of Internet based check scam. I would have thought that every lawyer in the Country had heard about these by now, but I understand that yet another lawyer got soaked to the tune of $180,000 in Texas recently.

What I think is worse is that I have now heard of these scams targeting non-lawyers. At least we have bar associations and journals to warn us, and any of us with bank law experience really should know better.

Regardless, here is a great article on this subject.  Check Scams that Target Lawyers, by Robert T. Luttrell, III.

Elaine