Posted on: 20th Oct, 2007 03:48 pm
i have a weird situation. over 5 years ago we sold our house in new jersey and moved to florida. somehow our second mortgage through gmac did not get paid off. didn't notice it at the time because we didn't go to closing. it was a mail away. we had been living in fl for about 8 months by that time and had totally divorced ourselves from the situation. anyway, we got the first bill and thought it was nothing. next bill came and we pulled out the closing papers and realized then that it had never been paid off. by then we didn't have the full amount to pay them so we continued to pay the monthly bills figuring sooner or later we would be able to pay them back. so for 5 years i have been paying a mortgage on a property i don't own. no biggie, i owed it so i kept paying it. well now we are really having a hard time paying our mortgages and that one is the worst because the interest rate is over 10% now. i'm not sure what to do. i know i owe it and i don't want to get out of paying it. that's not my question. i can not refinance any of our mortgages because we don't have any equity left since the atrocious downturn in housing. we have a mortgage on our home and also a mortgage on a home my oldest daughter lives in. she has recently come down with lupus and needs all the help we can give her so we can not sell that property, at least not yet. my husband and i had jobs having to do with the housing market so our income has been reduced by 90%, so we couldn't refinance even if we had equity.
if i notify gmac that we can not continue to pay that mortgage at the rate that it is at, do you think they will refinance to a lower rate or will some crazy bell go off and they will want all the money at once at ruin our credit. the one thing we have left is our great credit. is their anything criminal in what we did? can we get in trouble in any way? i'm so afraid to bring it to their attention but it is going to bury us soon and i don't want to go into default on our bills. any help is greatly appreciated!!!! sorry about the long post.
if i notify gmac that we can not continue to pay that mortgage at the rate that it is at, do you think they will refinance to a lower rate or will some crazy bell go off and they will want all the money at once at ruin our credit. the one thing we have left is our great credit. is their anything criminal in what we did? can we get in trouble in any way? i'm so afraid to bring it to their attention but it is going to bury us soon and i don't want to go into default on our bills. any help is greatly appreciated!!!! sorry about the long post.
" Is their anything criminal in what we did?"
That is what I kept thinking as I read through your post. Was it something you did unitentionally? Was it someone elses intention?
"Somehow our second mortgage through GMAC did not get paid off"
What happened to the extra money that obiously came out of closing? Surely someone noticed the extra what $20,000 or more that you got a check for at closing. Or did someone else pocket that difference? If the first got paid off but the second did not that money had to go somewhere.
That is what I kept thinking as I read through your post. Was it something you did unitentionally? Was it someone elses intention?
"Somehow our second mortgage through GMAC did not get paid off"
What happened to the extra money that obiously came out of closing? Surely someone noticed the extra what $20,000 or more that you got a check for at closing. Or did someone else pocket that difference? If the first got paid off but the second did not that money had to go somewhere.
Hi,
I think it will be best to contact GMAC immediately and clear up your situation. You can talk to them about some alternative repayment options.
I think it will be best to contact GMAC immediately and clear up your situation. You can talk to them about some alternative repayment options.
Hi Stlucielady,
Welcome to our forums.
First of all, if you have sold the property, why didn't you inform GMac about it. And moreover, you could have used the sale proceeds to pay off the mortgage. GMac may not be knowing about the sale or else they should have called the loan due immediately. They might now consider it a fraud. You may have done it unknowingly but why would they believe you. after all, it's business and there are some rules which lenders follow and expect borrowers to follow.
I may sound a bit harsh but it's reality. Either you pay off the mortgage in full or else GMac might bring about a case too. And, you cannot refinance also because the same property needs to be used. But you have already sold it. Immediately contact Gmac and do consult a mortgage attorney to be informed of the legal ramifications of this issue.
Good luck
Welcome to our forums.
First of all, if you have sold the property, why didn't you inform GMac about it. And moreover, you could have used the sale proceeds to pay off the mortgage. GMac may not be knowing about the sale or else they should have called the loan due immediately. They might now consider it a fraud. You may have done it unknowingly but why would they believe you. after all, it's business and there are some rules which lenders follow and expect borrowers to follow.
I may sound a bit harsh but it's reality. Either you pay off the mortgage in full or else GMac might bring about a case too. And, you cannot refinance also because the same property needs to be used. But you have already sold it. Immediately contact Gmac and do consult a mortgage attorney to be informed of the legal ramifications of this issue.
Good luck
Like I said in my post. It was a mailaway. Everything was done with lawyers and realtors and title companies. I assumed everything was being taken care of. WE also had to escrow a large amount to the buyer for an open permit so it all seemed ok, bottom dollar-wise. I am not saying it wasn't a mistake, it was. Totally unintentional. Thought everything was fine. I never even saw the documents. My husband had a POA for me for that closing and I had a POA for him for the Florida Closing. Sadly, I'm the more detailed one. Anyway, I didn't even know you could close on a property without everything getting paid off and all estoppel letters addressed. 2 months later, we didn't have that balance anymore to pay off the loan. That's when we found out about the balance not being paid off. Not a bad person here. Been trying to pay off this loan for 5 years but of course since it is a credit type line, I think we have only paid off about $300 in principal total.
Please do not dwell on the past. What's done is done. I need help on the future. If anyone knows real answers I would be grateful. Maybe someone has run into this situation before or has some experience with someone they know. All information welcome. Thank you again.
Please do not dwell on the past. What's done is done. I need help on the future. If anyone knows real answers I would be grateful. Maybe someone has run into this situation before or has some experience with someone they know. All information welcome. Thank you again.
Hello Stlucielady,
There's one option that might help you. If you can take a cash-out refinance against your present home and pay off the second mortgage with GMac.
You have to see whether the excess amount of this cash-out is sufficient to pay off the entire outstanding balance or not.
There's one option that might help you. If you can take a cash-out refinance against your present home and pay off the second mortgage with GMac.
You have to see whether the excess amount of this cash-out is sufficient to pay off the entire outstanding balance or not.
I do understand it's not intentional and that's why I said that GMac might consider it as fraud. What I wanted to say was you could have been a bit more careful that's all. My intention was not to criticise you actually.
I'm just a bit concerned as to what action GMac may think upon taking once they come to know about the sale. I think it's better if you can make arrangements so that you pay off the second mortgage asap and get out of it. Do you have any savings or investment returns which you can use currently? It is not wise to use up your savings but at this point of time, there aren't many ways to get out of this loan, isn't it?
By the way, do you have any life insurance policy? probably you can surrender the policy to the insurer and get paid till a certain value. This is known as life settlement service and to avil this, You need to contact a life settlement broker. You can use the cash value to repay your loan.
Currently these are the options I can think of. If I find out any other options, I shall definitely post it here.
Good luck
I'm just a bit concerned as to what action GMac may think upon taking once they come to know about the sale. I think it's better if you can make arrangements so that you pay off the second mortgage asap and get out of it. Do you have any savings or investment returns which you can use currently? It is not wise to use up your savings but at this point of time, there aren't many ways to get out of this loan, isn't it?
By the way, do you have any life insurance policy? probably you can surrender the policy to the insurer and get paid till a certain value. This is known as life settlement service and to avil this, You need to contact a life settlement broker. You can use the cash value to repay your loan.
Currently these are the options I can think of. If I find out any other options, I shall definitely post it here.
Good luck
"Anyway, I didn't even know you could close on a property without everything getting paid off"
That is the thing I don't think you can. Somebody committed fraud or a big mistake has happened. The title company should have been aware of the 2nd mortgage and they would have been responsible to pay it off. If you have documents showing that it was your intention to pay it off then it may be their (the title company closer) that is at fault.
"Please do not dwell on the past. What's done is done. I need help on the future. If anyone knows real answers I would be grateful."
Myself and Caron were not trying to be critical of you. We were trying to help the best we can. I personally can come off as critical and sarcastic. It is nothing personal.
I definately recommend getting an attorney. If or when the old bank finds out that there is no longer a house attached to their loan then they could call the whole amount due immediately. I believe you, but if the $%#@ hits the fan you could still be held responsible if you don't cross your T's and dot your I's.
That is the thing I don't think you can. Somebody committed fraud or a big mistake has happened. The title company should have been aware of the 2nd mortgage and they would have been responsible to pay it off. If you have documents showing that it was your intention to pay it off then it may be their (the title company closer) that is at fault.
"Please do not dwell on the past. What's done is done. I need help on the future. If anyone knows real answers I would be grateful."
Myself and Caron were not trying to be critical of you. We were trying to help the best we can. I personally can come off as critical and sarcastic. It is nothing personal.
I definately recommend getting an attorney. If or when the old bank finds out that there is no longer a house attached to their loan then they could call the whole amount due immediately. I believe you, but if the $%#@ hits the fan you could still be held responsible if you don't cross your T's and dot your I's.
Thank you for trying to help. Wish I did have the equity to cash out on my home but I have lost almost $100k in equity in the last 2 years. Now I am barely upright in my primary loan. No room for an equity loan left. Wish I could find another way. With the 90% decrease in our yearly income, our housing costs are now over 75% of our income. Our unemployment rate is the highest in the state so getting a job that pays more than I'm making now is not an option. Just trying to hold things together until one of our properties will sell and relieve some of the pressure. I guess I am just between a rock and a hard place. I thought maybe the bank would do one of those 1% interest rate loans like they do for short sales. That was the best case scenario. I guess I shouldn't even open that Pandora's box. :cry: Thanks again.
Hello Stlucielady,
You should consult an attorney immediately and also talk to GMac as early as possible.
You should consult an attorney immediately and also talk to GMac as early as possible.
Hi, StLucieLady,
Hello! I hope this response is still viewable by you after a couple years. I've been going crazy researching the internet for answers as I am in the EXACT SITUATION you are/were in about a second mortgage that fell through the cracks unintentionally. Call it ignorance on mine & my husband's end, we admit it...we were first-time homeowners and sellers at the time the sale took place & we'd used most of the gains on paying off personal loans and multiple debts. We became content with just continuing to pay GMAC monthly. Now that we are a little more knowledgeable about mortgages & loans, we are worried about what we have ALLOWED to happen. At the same time, if we continue to pay the loan at the rate that we are, we will pay 80k+ above the principal balance (for a high interest loan from a house we no longer own---truth in lending...). I also don't wanna open Pandora's box with the lender :( We will try to pay-off within 2 years...try try try. QUESTION: Did you ever find answers to your questions?? Have you talked to an attorney?? My husband wants to file chap 13...not sure if we even qualify.... and worried about law suit. Please let me know if you've gained any useful info we can benefit from. Is GMAC ok with a settlement offer?? Much thanks....
-Worried Guest
Hello! I hope this response is still viewable by you after a couple years. I've been going crazy researching the internet for answers as I am in the EXACT SITUATION you are/were in about a second mortgage that fell through the cracks unintentionally. Call it ignorance on mine & my husband's end, we admit it...we were first-time homeowners and sellers at the time the sale took place & we'd used most of the gains on paying off personal loans and multiple debts. We became content with just continuing to pay GMAC monthly. Now that we are a little more knowledgeable about mortgages & loans, we are worried about what we have ALLOWED to happen. At the same time, if we continue to pay the loan at the rate that we are, we will pay 80k+ above the principal balance (for a high interest loan from a house we no longer own---truth in lending...). I also don't wanna open Pandora's box with the lender :( We will try to pay-off within 2 years...try try try. QUESTION: Did you ever find answers to your questions?? Have you talked to an attorney?? My husband wants to file chap 13...not sure if we even qualify.... and worried about law suit. Please let me know if you've gained any useful info we can benefit from. Is GMAC ok with a settlement offer?? Much thanks....
-Worried Guest
hi guest,
chapter 13 bankruptcy will help you in reorganizing your debts. you should contact a bankruptcy attorney and have a word with him/her regarding bankruptcy filing.
chapter 13 bankruptcy will help you in reorganizing your debts. you should contact a bankruptcy attorney and have a word with him/her regarding bankruptcy filing.
Did you sell the house for less than what you owed to GMAC?
All debts/liens pertaining to the house must be paid either prior to closing or just after time of closing. All debts/liens should have been paid out of the amount of the new purchasers loan amount, meaning, that both mortgages would be paid off in full (the lawyer would have had to contact GMAC and get a loan payoff for both loans for the time of closing and request a Title Search to see all liens relating to the property) , the lawyer would take their fee, if any, out of the new purchasers loan amount and any monies left over would be sent to you.
Example: How it should have been done
If you sold the house for $100,000.00
Amount owed for both loans 80,000.00
Lawyers fee/other debts 1,000.00
Amount you rec'd after sale $19,000.00
All debts/liens pertaining to the house must be paid either prior to closing or just after time of closing. All debts/liens should have been paid out of the amount of the new purchasers loan amount, meaning, that both mortgages would be paid off in full (the lawyer would have had to contact GMAC and get a loan payoff for both loans for the time of closing and request a Title Search to see all liens relating to the property) , the lawyer would take their fee, if any, out of the new purchasers loan amount and any monies left over would be sent to you.
Example: How it should have been done
If you sold the house for $100,000.00
Amount owed for both loans 80,000.00
Lawyers fee/other debts 1,000.00
Amount you rec'd after sale $19,000.00
A house cannot be legally sold/closed if there is money still owing on it. The lawyer has a certain amount of time after closing to pay off all liens/debts pertaining to the house. I'm not sure of the time limit. The lawyer should never have sent you your money without ensuring all liens/debts were paid. Sounds like the lawyer didn't do his job properly.
I think it would be in your best interest to get a Real Estate lawyer in the county where the house is. You can also go on-line and go to the office of the Registrar of Deeds in that county and see if the lien is still there.
Not sure how this will all work out with you voluntarily making payments on a loan that should have been paid off at the time of closing....
Just wondering if this affects/or will affect the new owners in the future.....
I think it would be in your best interest to get a Real Estate lawyer in the county where the house is. You can also go on-line and go to the office of the Registrar of Deeds in that county and see if the lien is still there.
Not sure how this will all work out with you voluntarily making payments on a loan that should have been paid off at the time of closing....
Just wondering if this affects/or will affect the new owners in the future.....
Hi terryk,
If the liens are not paid off at the time of closing, the creditor/lender will come after the new owner of the property in order to recover the dues.
Thanks
If the liens are not paid off at the time of closing, the creditor/lender will come after the new owner of the property in order to recover the dues.
Thanks
Thank you for your feedback. We sold the house WITH profit, just before the housing market dipped. The bottom line is that we could have paid GMAC, but didn't (as stated in my previous post). I, too, can't help but think that someone else (title co. etc) failed to do their job or GMAC failed to successfully put the lien. It would have been better if they distributed the funds correctly to begin with. Anyway, in the end, my husband & I are still at fault for allowing it to linger this long.
However, like "StLucieLady" said, we must not dwell on the past. What's happened has happened...lesson learned! I need advice for the future please.
Funny thing about the house, I checked on Zillow.com and looks like it was short-saled by the 2nd owners a couple months ago. So now, there's a 3rd owner (it was a new-build when we bought it). We certainly don't want to cause problems for the new owners & are doing our best to save up & try to pay the loan off quickly.... loan balance is 36K.
If the lien isn't properly recorded, it still doesn't change the fact that we signed a promissory note for the loan, right? It's just become an "unsecured" loan. I will just prepare for the worst case scenario, I guess... that they will demand the full balance and/or file judgement. :(
However, like "StLucieLady" said, we must not dwell on the past. What's happened has happened...lesson learned! I need advice for the future please.
Funny thing about the house, I checked on Zillow.com and looks like it was short-saled by the 2nd owners a couple months ago. So now, there's a 3rd owner (it was a new-build when we bought it). We certainly don't want to cause problems for the new owners & are doing our best to save up & try to pay the loan off quickly.... loan balance is 36K.
If the lien isn't properly recorded, it still doesn't change the fact that we signed a promissory note for the loan, right? It's just become an "unsecured" loan. I will just prepare for the worst case scenario, I guess... that they will demand the full balance and/or file judgement. :(