Real Estate Law
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Good evening- thanks for requesting me.
Are you here?
lol where'd you go?
I had a client show up to pick up some papers.
To add to my questions...does it make a difference if the 2nd is the parent company of the 1st?
Oh there you are
Now you're gone again
Yes...I keep responding but you don't seem to be receiving.
And all I see is you coming in and going out lol
ok stay there
Let me try a different internet connection.
and he's gone again lol
Okay...this should be better. Sorry.
Can you see me now!!
I can see you now!
and you're gone again lol
I'm here the whole time...for what ever reason my connection is in and out so please just go ahead and type and I will respond as quickly as I can. :-)
Okay. Montana is a non-recourse state with respect to purchase money mortgages.
If you can prove that the HELOC was used totally for purchase money, you should be protected.
Second, Montana is a one-action state.
That means the lender can EITHER foreclose or collect on the note.
If the lenders are the same, I would argue that the one action statute covers both loans.
I think you will be fine.
Even if the 1st does business under a different name? (First Horizon vs First Tennessee-parent company)
Its a good question- there's no black and white on that.. but if they do come after you, it's a good argument.
Was the HELOC used for the purchase?
Yes, all of it.
Then you should be fine anyway. Purchase money mortgages are non-recourse mortgages.
It was a 90-10-10 loan
So if my credit report shows it as having been charged off with all three credit agencies why would the 2nd still be inquiring on my credit?
it's a good question. Have they contacted you at all?
No. We haven't hear a word from them since the foreclosure proceedings.
If you want to be bold, I suppose you could contact them and ask them why they are pinging your credit when you have no obligations to them. If they say they are waiitng to collect on the second, you will raise your defenses- that the HELOC was a purchase money mortgage and it was foreclosed.
And that the state is a one-action state and they chose foreclosure with respect to their first mortgage.
Is there any other way to show proof that they are not due that money because of the foreclosure? We never received a 1099 C from them either, so wouldn't that add to the argument that it was discharged with the foreclosure?
Now keep in mind, these are legal defenses that you can raise.
Technically, HELOCs are not afforded anti-deficiency protection, because usually, they are not purchase money mortgages. But your situation is clearly different. When it comes down to it, you may need to hire an attorney to assert these defenses on your behalf.
Defenses yes but still no way to provide to proof to a third party (which is why I am asking) I have a third party wanting proof.
Ah. I understand. Yes, that's difficult, especially if no one sent you a 1099C
Well, short of asking them for written confirmation (which is kind of absurd), not sure how you prove that. Maybe you could inquire as to why you never received a 1099C..
Is there a statue of limitations on this?
Montana statute of limitations on contracts is 8 years.
8 years from origin?
8 years from the time when the right to sue accrued.
Can't you just give your third party a copy of the statute:
71-1-232. Deficiency judgment not allowed on foreclosure of purchase price mortgage. Upon the foreclosure of any mortgage, executed to any vendor of real property or to the vendor's heirs, executors, administrators, or assigns for the balance of the purchase price of the real property, the mortgagee is not entitled to a deficiency judgment on account of the mortgage or note or obligation secured by the mortgage.
If it was a purchase price mortgage, they can't get a deficiency judgment.
I have sent them the statute but they still are not satisfied.
Then short of asking the HELOC lender for confirmation, I'm really not sure what else you can give them.
I believe you are right. Bummer of a deal. Thank you for your help. I was familiar with much of the information you provided. I was hoping for a legal zinger that would provide the proof they are after but I don't think that is possible.
I'm sorry I couldn't do more for you. Good luck.
Thank you for your time. Have a good day.
You as well.
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