Free home?

  • #1
Ivan Seeking
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Main Question or Discussion Point

I know someone [I will call Jack] who is in deep trouble with his house; at least, it seems so. Firstly, I knew that he was having problems making payments on his $400K home, but I had no idea that he hasn't made a payment in over two years! So it seems there is no hope, but here is the rub. He stopped making payments and soon received the expected warnings wrt non-payment. Then he was informed that the loan had been sold to a bank in China. That was the last he has heard from anyone in almost two years. They haven't received any notices, payment coupons, or phone calls. He doesn't even know where to send a payment if he could afford it.

After learning more about the situation, it is obvious that there is no hope. If the bank catches up with him, there is no way he can keep or afford the house. But it is almost starting to seem that the loan was lost. My advice was to keep his mouth shut and hope for the best.

Thoughts?
 
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Answers and Replies

  • #2
Borg
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Lost mortgages have been a problem that many people are using to their advantage. It's not too bad when they don't even remember though. Of course he won't ever be able to sell the house. But, depending on how long he can live for free, he could save enough to pay cash for one someday.
 
  • #3
Ivan Seeking
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Lost mortgages have been a problem that many people are using to their advantage. It's not too bad when they don't even remember though. Of course he won't ever be able to sell the house. But, depending on how long he can live for free, he could save enough to pay cash for one someday.
Interesting! I wonder if he might he even be entitled to squatter's rights given enough time.

This is in California.
 
  • #4
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Lost mortgages have been a problem that many people are using to their advantage. It's not too bad when they don't even remember though. Of course he won't ever be able to sell the house. But, depending on how long he can live for free, he could save enough to pay cash for one someday.
The story at that link is amazing. I hadn't heard of that.
 
  • #5
Evo
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The story at that link is amazing. I hadn't heard of that.
Oooh, think anyone has the original papers on the brush shelter?
 
  • #6
cmb
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I think it is ethically wrong that the law allows someone to sell a debt anyway. It should simply not be allowed.

If you or I sold something we didn't own, we'd be charged with fraud.

If a bank does it, it is called 'collateralising debt'.

I think that should go for Government Bonds too.

I reckon if the re-selling of debts had been outlawed (I mean, what is it that a person owns to sell if they have credited someone with cash?!?!) then all the troubles of today would not have transpired.

I've also challenged a bank with whom I had a loan but that was 'acquired' by another.
Somewhat regrettably, they did have the note!

The Chinese are on a different mission. They are simply in 'acquire' mode, and if they ever choose to wage war on the west, all they will have to do is go around and [legally] burn everything they own to the ground, and the west will fall! Not that I am suggesting they would do that, but are our nations really secure by allowing an unlimited about of capital to be owned by another country? Only the west/open-market systems seem to allow it, most other places insist on at least 50% owned by locals. Seems a good idea, to me.
 
  • #7
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I think it is ethically wrong that the law allows someone to sell a debt anyway. It should simply not be allowed.

If you or I sold something we didn't own, we'd be charged with fraud.

If a bank does it, it is called 'collateralising debt'.
heh, well, you've got to consider, they didn't have the money they gave you to buy the house, either.
 
  • #8
cmb
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heh, well, you've got to consider, they didn't have the money they gave you to buy the house, either.
Acting as a guarantor on the basis of collateral is OK, no-one is claiming to 'own' anything in that scenario.

The Banks do not lend their own money [that is, when they are lending 1000% more than their assets], they lend the State's money. They hand over a cheque that says 'The State Bank shall pay the bearer X', and the recipient can then, effectively, go collect cash from the State bank [albeit, at a 3rd party bank actually handing over the cash]. The Bank itself cannot print the cash, and it doesn't have it, so it comes from the State. The Bank is merely an intermediary guarantor.
 
  • #9
Ivan Seeking
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The Chinese are on a different mission. They are simply in 'acquire' mode, and if they ever choose to wage war on the west, all they will have to do is go around and [legally] burn everything they own to the ground, and the west will fall!
Actually, the insurance companies would take a hit and the US would experience a building boom.

Large fires with heavy losses inject cash into the economy.
 
  • #10
Ivan Seeking
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I would like to see if anyone knows anything more about this type of situation before the thread gets locked, so let's try to stay on topic.
 
  • #11
Evo
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I would like to see if anyone knows anything more about this type of situation before the thread gets locked, so let's try to stay on topic.
Here's a case. Of course she has proof that she attempted to pay repeatedly. If he has no documentation that he contacted the original company and tried to track down who owns his mortgage, he may not have a case. There could be a typo and the correspondence from the new mortgage owner could have been mailed to the wrong address. As long as he's ready to be evicted with a foreclosure at any moment, that's the risk he has to take. He could always consult an attorney for advice. A judge probably won't look too kindly upon someone that lived there without paying AND making no attempt.

http://www.thegrio.com/news/lost-mortgage-papers-erase-homeowners-payments.php
 
  • #12
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Sorry to hear about your friends house. My sister went through a similar situation, but they eventually got around to it. At this point, I would think that his credit is ruined. Probably best to stay in the place as long as he can and save money. Bad reports stay on your credit in the USA for what, 7 years? Does that time period re-start if the debt is sold? I'm not really sure how all that works. It seems more likely that when they get around to it they would take it to court.

How does he know a bank in China has the debt now? If he knows that, then he surely knows what bank has it? I would suggest contacting them, but then again, maybe it is lost, which would be a beneficial situation.
 
  • #13
Evo
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Sorry to hear about your friends house. My sister went through a similar situation, but they eventually got around to it. At this point, I would think that his credit is ruined. Probably best to stay in the place as long as he can and save money. Bad reports stay on your credit in the USA for what, 7 years? Does that time period re-start if the debt is sold? I'm not really sure how all that works. It seems more likely that when they get around to it they would take it to court.

How does he know a bank in China has the debt now? If he knows that, then he surely knows what bank has it? I would suggest contacting them, but then again, maybe it is lost, which would be a beneficial situation.
He's more likely to be spotted during a county tax audit. I bet he hasn't been paying property taxes, and when they check the tax roles...

That's something else he could check, is someone paying taxes on the property?
 
  • #14
Borg
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He's more likely to be spotted during a county tax audit. I bet he hasn't been paying property taxes, and when they check the tax roles...
I have a relative that managed to get a mortgage that didn't have taxes included in the escrow. If he can at least pay the taxes, he might be able to eventually do a quiet claim like the article described. If they can't produce the documentation, maybe he won't even have his credit affected. Good luck to your friend Ivan!
 
  • #15
Ivan Seeking
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As I understand it, he was trying to renegotiate the loan when the change of ownership occurred. He then tried to pursue the same deal with the new bank and never received any sort of response. He has allegedly tried to find out where to send payments and never recieved any response to those requests either.

I don't have a terrible amount of sympathy for him as he was in way over his head with an exotic loan package [a stupid thing to do in the first place!], but I always hate to see a family lose their home. And I esp feel badly for the kids.
 
  • #16
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I know someone [I will call Jack] who is in deep trouble with his house; at least, it seems so. Firstly, I knew that he was having problems making payments on his $400K home, but I had no idea that he hasn't made a payment in over two years! So it seems there is no hope, but here is the rub. He stopped making payments and soon received the expected warnings wrt non-payment. Then he was informed that the loan had been sold to a bank in China. That was the last he has heard from anyone in almost two years. They haven't received any notices, payment coupons, or phone calls. He doesn't even know where to send a payment if he could afford it.

After learning more about the situation, it is obvious that there is no hope. If the bank catches up with him, there is no way he can keep or afford the house. But it is almost starting to seem that the loan was lost. My advice was to keep his mouth shut and hope for the best.

Thoughts?
Amazing. 'Jack' should look to the sky and simply say, "thanks", imo. And be prepared to move. Your advice makes sense, however, considering the inscrutability of the Chinese, there is the possibility of ninja attack.
 
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  • #17
turbo
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Amazing. 'Jack' should look to the sky and simply say, "thanks", imo. And be prepared to move. Your advice makes sense, however, considering the inscrutability of the Chinese, there is the possibility of ninja attack.
Aren't ninjas Japanese assassins? Just askin'...
 
  • #18
turbo
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The people who bought our last house should never have gotten a loan. Single-income family that home-schooled their kids and looked (to me) like they couldn't have lasted more than a few months. A local bank would not have written that note.

They went through a mortgage company at the height of the housing boom. Unfortunately for them, their note wasn't sliced-and-diced to the point that there was any doubt who held the debt. I was sorely tempted to buy back that house. We sold it for a bit less than $130K (housing is VERY cheap in Maine) and when they defaulted, the place was back on the market at an asking price of $75K. I have spent a short (unpleasant) time as a landlord, though, and was reluctant to revisit that experience, even if there was money to be made.
 
  • #19
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Aren't ninjas Japanese assassins? Just askin'...
Hmmmm. Ok, I think you're right. But isn't it possible for Chinese banks to employ ninjas?
 

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