If it comes down to it, AVOID FORECLOSURE, short sell your property and accept the deficiency. Then simply don’t pay on the deficiency. In most cases, inertia and the banks' ridiculous disorganization will be on your side.
Here is a secret that the banks don't want you to know: It is very hard for the lender to collect from you. Sure, they can and may drag you into court. But, let's face it, this action takes time and lots of money. The fact is, the American Legal System is designed to protect the borrower, in most cases, especially when the borrower simply shows up for the court hearing.
A full time debt collection firm who buys defaulted Home Equity Loans, admitted in the New York Times that it is veru difficult to collect deficiencies. Clark Terry, the chief executive of Utah Loan Servicing, said the most he will pay for an defaulted home equity loan is $500. Why is that? Because they are so hard to collect on. “Anything over $15,000 to $20,000 is not collectible,” he said. The article where I found this is “Debts Rise, and Go Unpaid, as Bust Erodes Home Equity", published August 11, 2010 in the New York Times.
The lenders (and debt buyers, which are usually law firms) know it will cost them at least $2,000 to go to court to perfect their judgment. After that, most people will simply declare bankruptcy and not pay them a dime. This fact makes the banks very reluctant to pursue you legally. Here is the other thing on your side. It’s simple inertia. The lenders and debt buyers deal on a volume basis. They know that if they use simple collection techniques, a certain percentage of people will pay. They don’t have time to go through every single loan and implement every single collection technique. So they do what they can. Their most effective, low cost collection technique is harassing phone calls. They setup special phone software (aka robot dialers) that allows their collectors to talk to 15-20 people an hour. This harsh boiler room technique may get or scare some people in to paying, but is far from a sure thing. Be strong and hold your ground. Read up on the Fair Debt Collection Practices Act, and if the collectors violate it, take them to court.
These same principles could work for all sorts of debts. It should be able to work work for defaulted credit cards, defaulted second mortgages, and other people attempting to collect from you. In the next post, I will lay out the process you can use to avoid paying this debt back.
Thinking about a short sale? I can help you short sale your property and never pay the bank another penny. Send me an e-mail at utahhomesaver@gmail.com. I will contact you for a free consultation. When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call Dave at 801-651-0707.
Thinking about a loan modification? Our Utah Home Saver Loan Modification Kit has the instructions you will need to get a loan modification approved with your bank. This is a FREE for you, all you have to do is call or email us today.
Thank you for taking a few minutes of your busy day to read this, Dave Forsberg.
Dave is a Realtor with Prudential Utah Real Estate - Bountiful.
Phone: 801.651.0707 Email: utahhomesaver@gmail.com
Dave Forsberg and The Utah Home Saver Team specialize in helping Davis County, Utah Homeowners short sale and never pay the bank another dime. Bountiful Loan Modification Help, Bountiful Short Sales. Bountiful Short Sale Realtor. Bountiful Realtors. Bountiful Realty. Bountiful Realtor. North Salt Lake Short Sales. Woods Cross Short Sale Realtor. Centerville Short Sales. Farmington Short Sale Realtor. Fruit Heights Short Sales. Kaysville Short Sales Realtor. Layton Short Sales. Layton Short Sales Realtors. Syracuse Short Sales. Clearfield Short Sales Realtor. Davis County Utah Realtor. Stop Foreclosure. Stop Utah Foreclosure. Avoid Foreclosure. Avoid Utah Foreclosure. Foreclosure Alternatives. Utah Foreclosure Alternatives.
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