Rancho Cucamonga, CA Real Estate Broker: March 2012

Credit Card Collection Agencies are Preventing Short Sale Closings

 

Many collection agencies have resorted to recording liens against the borrower’s property instead of the bank levy or wage garnishment option.  What I don’t understand is how these collectors think that a lien for an abstract of judgment is of any real value when these properties are hundreds of thousands of dollars underwater.  There is not a dime extra for anyone who is party to a short sale.  The first lender is agreeing to accept only half of the original loan balance to release their lien (typical example), the second lender receives no more than $6,000 to release their lien and in California even the property tax collector will agree to step aside by way of a partial lien release to enable the transaction to close.   So who gave these credit card collection agencies all the power to refuse negotiations and force these homes into foreclosure?

An abstract of judgment lien recorded against a property can be released through the use of a partial lien release which allows them to have the ability to collect from the debtor at any other time in the future by attaching itself to any other asset the borrower owns instead.  If the home goes to foreclosure because of their lack of cooperation they still have the legal right to collect on their judgment through a wage garnishment, bank levy or attaching to a subsequent real property the borrower owns.   Why hold up a short sale transaction that has ZERO ability for repayment of the debt when they have other options for recovery?   

Has this happened to any of you too?

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

 

(909) 815-4499 Direct Cell

CA DRE Broker Lic #01193694

 

 

Comment balloon 38 commentsDiane Wheatley • March 09 2012 12:22AM
Credit Card Collection Agencies are Preventing Short Sale Closings
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