So we tax payers are going to bail out the bad loans

[Ion]

There isn't supposed to be any taxpayer money involved. Its a better deal for the banks to show some leniency and extend the teaser rate out a couple of years, and maybe make up the difference at the end of loan....instead of foreclosing on thousands more homes and driving the US economy and possibly the world's into the shitter.
According to White House deputy press secretary, Tony Fratto, Mandelon is correct. Here's what Fratto said:
"it (the plan) would help "potentially a little more than a million" people who can afford payments with their introductory rates, but not if they jump to higher rates.
Fratto said it was voluntary, and did not represent federal intrusion into the private market. Those comments were aimed at countering criticism from conservatives that the administration was violating its free-market principles by pursuing a government solution to the mortgage crisis.
President Bush, who was to announce the agreement after a meeting with industry leaders at the White House on Thursday, has stressed that the deal is not a bailout because no government money is involved."

[totenhosen]

I don’t understand the question.
I wonder of OCHEAT 28 might know the answer?
Are you talking about foreclosing on the first, and any remaining money being applied to the second? If so, I don’t think it works that way. The second would no longer have a security interest, and the borrower would be entitled to surplus funds if the amount of the sale on the first exceeded the outstanding balance plus costs and fees.
Since the second’s security interest was wiped, they would have no option except to sue to obtain a deficiency judgment. I don’t see how that would be a waiver of their legal remedies to recover the remaining loan balance on their second.
Or you taking about foreclosing on the second, and whether or not the one-action rule applies to foreclosig on the second?
Let me give a more detailed example. Let's say there is $300k in deeds outstanding on the home, $240k on a 1st and $60k on a 2nd. House gets foreclosed on and ends up selling for $250k. (Let's exclude any costs involved in selling/foreclosure) So the 1st T/D gets taken care of. Now there is only $10k left that could be applied towards the 2nd. Can the 2nd T/D holder take the $10k and sue for the deficiency or msut they not take any money and sue for the entire $60k. (This assumes it was an 80/20 loan and not a refi/cash out.)
I might misunderstand the rule of single action. But I thought that the note holder could only do one or the other and not both.

[C-2]

Let me give a more detailed example. Let's say there is $300k in deeds outstanding on the home, $240k on a 1st and $60k on a 2nd. House gets foreclosed on and ends up selling for $250k. (Let's exclude any costs involved in selling/foreclosure) So the 1st T/D gets taken care of. Now there is only $10k left that could be applied towards the 2nd. Can the 2nd T/D holder take the $10k and sue for the deficiency or msut they not take any money and sue for the entire $60k. (This assumes it was an 80/20 loan and not a refi/cash out.)
I might misunderstand the rule of single action. But I thought that the note holder could only do one or the other and not both.
If they are 80/20 PURCHASE MONEY trust deeds, then the lender on either note cannot sue to collect a deficiency, it’s one of the exemptions to the one-action rule.
On non-purchase money TD’s, the one-action rule applies to each mortgage, but in this case, does not apply to the second since it is no longer in existence.
In your instance the borrower would have $10K in surplus funds.
The second’s security interest would be wiped by operation of law. There is no contractual/security requirement by the borrower to turn that money over to the second holder. If they did (how nice of them), I don’t see how it would waive their right to sue to collect the remaining balance due, sans the $10K payment towards the balance due. Like tax liens, TD’s are competing creditors in a collection environment.
One-action gets all funky and complicated if they foreclose on a second or refinance first.

[centerhill condor]

the president likes the free market when it works the way the TV wants.
By changing the terms of the loan agreement we take yet another step towards anything goes...as long as you can stand in front of a TV and cry about it.
continuing the trend towards fatter, dumber, and lazier Americans. Enjoy the ride.
CC

[riverfun]

Ok after reading through here I went over to money.com and read alot more about the bail out. I dont think it is really going to help very many people at all, and your going to have to prove that you cant afford the rate adjustment or able to refi again. I can only imagine the paperwork required.

[OC28HEAT]

I don’t understand the question.
I wonder of OCHEAT 28 might know the answer?
Are you talking about foreclosing on the first, and any remaining money being applied to the second? If so, I don’t think it works that way. The second would no longer have a security interest, and the borrower would be entitled to surplus funds if the amount of the sale on the first exceeded the outstanding balance plus costs and fees.
Since the second’s security interest was wiped, they would have no option except to sue to obtain a deficiency judgment. I don’t see how that would be a waiver of their legal remedies to recover the remaining loan balance on their second.
Or you taking about foreclosing on the second, and whether or not the one-action rule applies to foreclosig on the second?
Well the sale process is pretty simple the first mortgage bids the total debt in this case $100k. The property sells for $120k. The trustee (me) collects the funds and satisfies the first mortgage and then review title for subsequent liens I now have to disperse $20k in excess proceeds. When I review title I send claim letters to all parties and then disperse in order of priority until all are clear. if the second is $8k and the Thrid is $5k then in theory the borrower is entitled to the remaider.
if the title is a mess we may submit the funds to the court and as the court and request that they determine who gets what. This is called an interpleader.
some states have a mandatory interpleader law.

[OC28HEAT]

Let me give a more detailed example. Let's say there is $300k in deeds outstanding on the home, $240k on a 1st and $60k on a 2nd. House gets foreclosed on and ends up selling for $250k. (Let's exclude any costs involved in selling/foreclosure) So the 1st T/D gets taken care of. Now there is only $10k left that could be applied towards the 2nd. Can the 2nd T/D holder take the $10k and sue for the deficiency or msut they not take any money and sue for the entire $60k. (This assumes it was an 80/20 loan and not a refi/cash out.)
I might misunderstand the rule of single action. But I thought that the note holder could only do one or the other and not both.
The one action rule is really not what it seems because you can and most lenders especially larger banks with borrowers with money will pursue a tow pronged approach file a judicial foreclosure and nonjudicial at the same time and just drop one. the difference is not to take one of them to sale.
A judicial forclosure is nothing more that a lawsuit monetary judgement with a court ordered sheriff sale of the property to satisfy the debt. after the sherifs sale the remaining unsatisfied judgement attatches to other assetts. we have clients that hold the 1st and the 2nd on the same property and we file the NOD on the same day and do all the steps including publication of the notice of Trustees sale. The day before the trustees sale on the first we cancel that sale and go to sale on the 2nd in case the borrower wants to reinstate.

[HOSS]

Thank GOD I have a BIGGG diccckk.

[Big Warlock]

Told you guys it was W's fault!!!