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Richard, Attorney
Category: Legal
Satisfied Customers: 55325
Experience:  Attorney with 29 years of experience.
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In 2007 my husband and I purchased a home and obtained our

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In 2007 my husband and I purchased a home and obtained our loan from Wells Fargo. In order to get the loan and avoid mortgage insurance Wells Fargo decided to do a primary loan with a secondary equity line of credit of $58K with the deed as the security interest which combined made up the total price of the home. In 2009 the property was foreclosed on. Wells Fargo purchased the property for $100. Two weeks ago we were served a court summons from RCS Recovery Services in which we are they are claiming we owe them $58K plus interest. Apparently even though Wells foreclosed on us and they held both loans they sold off the secondary to RCS. Attached to the summons is an "Allonge for the purpose of note endorsement" that only states "account specific" for the original loan amount, borrowers name and property name". In the field for "Wells Fargo Loan Number" it says "See Attached Exhibit A" which is the equity line document. My question is what is an allonge?
Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.

Good morning. "Allonge" is a term you don't see much. But, it is really only a descriptive term and doesn't in itself have any direct impact on the specific lawsuit. It basically is a term referring to an exhibit or attachment because there too much to write and it won't fit on the 1st piece of paper. When that happens, this term is simply a directive that there will a separate sheet of paper which will contain the information that would not fit on the first page.

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Customer: replied 4 years ago.

Based on the above situation do you feel RCS has grounds for this lawsuit?

Thanks for following up. Can you tell me whether or not you received a 1099-C from the bank on this loan when the property was foreclosed?
Customer: replied 4 years ago.

I do not believe we received a 1099-C for either loan.

Thank you. Unfortunately, if not, the holder of the loan would still be within the applicable statute of limitations to brings suit. The Florida statute of limitations is 5 years on was recently amended to just 1 year to bring a deficiency judgment but because of when this new law takes effect, the holder of the loan would not be prevented from bringing this suit. Florida, unfortunately, is a deficiency state...which means the holder of this loan can pursue the borrower for the deficiency...the amount owed over the amount of the foreclosure sale. Whether or not they will continue to pursue this against you depends upon their assessment of the collectibility of a deficiency judgment. So, if you can convince them there is nothing for them to get, and that if they were to pursue a judgment, you would simply file for bankruptcy protection and get the judgment discharged—and even if you have no intention of doing so, it is still good leverage with the them to not pursue the lawsuit because they do not know whether or not you would… then it is unlikely they will continue to spend the time and money necessary to get a judgment they believe is uncollectible in the end.

Your further defense is that the holder of the loan doesn't have the property documentation. You can demand they produce all appropriate documentation, including the original loan documents, all assignment documents, and all evidence proving those signing any assignment documents actually worked at the applicable entities at the time of assignment. In addition, anyone signing affidavits should be made to appear to produce evidence of any and all personal knowledge sworn to in any such affidavits. The demand for this documentation itself often is sufficient to cause them to drop this suit.

This is the part of my job I don't like...when the law is not in favor of my customer. I wish I could tell you that the holder of the loan had no right to file this suit, but, I can only provide you information based on the law so that you can act on the best available information to you. ………..I wish I had better news, but can only hope you recognize and understand my predicament and don't shoot the messenger. I'm sorry!
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