OfflineA friend of mine had a rental house in Atlanta that she bought for $120,000 but with the RE bust, is now worth $20,000. She couldn't keep it rented because it was in a bad neighborhood. She sent the keys back to the bank. That was 1-2 years ago. No foreclosure. It recently got sold at a tax auction.
Last week she just got a phone call from a collection agency. They supposidly bought the mortgage - now $102,000. They want payment. The also said if she would work with them, she would only have to pay $20,000 otherwise they will garnish her wages.
Is this for real? Is this legal? Are banks really doing this?
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THATS CRAZY. I would want to know what the statute of limitations are and i wouldn't talk to them because that just gives the debt a new date. making it current again. I hope she can get some help.
when you give the keys back to lender.
Usually a Done deal
Mike
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a collection agency cannot garnish anyone's wages without first having an attorney file a lawsuit, serve the person with the lawsuit, then obtain a judgement against her from the judge; then file a wage garnishment lawsuit...
Collection agencies will use this type of strategy to scare people who owe money into paying. I would consult with your county legal aid, to make sure that the collection agency is not breaking the law with the tactics that they are using...
You could start by contacting Atlanta Legal Aid (link below)
http://www.atlantalegalaid.org/
Valerie
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Georgia is a non-judicial foreclosure state but it is also a recourse state. In order for the collection agency to garnish her wages, they would have to obtain a judgment against her. Sending the keys back to the bank does not automatically make it a deed in lieu of forelosure. The current environment has tended to favor the consumer from abusive/predatory lenders. That being said, the most prudent course of action would be to seek competent legal advice to see if the proper procedures were followed to give the collection agency the right to pursue a recourse judgment against her. Many times collection agencies buy debt instruments that have little likelihood of ever getting collected in bulk for pennies on the dollar. They rely on fear and intimidation coupled with the ignorance of the consumer to collect money on debts they have no legal right to collect. I believe in Georgia the lender has 30 days from the date of foreclosure to initiate a deficiency judgment. How that plays out with a tax sale, I do not know. As I said, competent legal advice would be the prudent course of action.
You might tell your friend to look into it more and call the bank to ask if they sold her debt to any collectors. There's a lot of funny business going on now in days.
Reynold Orozco
I will forward all your comments to my friend.