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What is likely going on with my strategic foreclosure/default situation?

Los Angeles, CA |

I purchased a condo in Los Angeles in 2007. I strategically defaulted in 2010. Since 2010 I have not made a single mortgage payment. At first I got the usual notices from Bank of America, saying I was late, asked if I wanted to modify my loan, that they would send my place to auction, etc. I ignored everything. My condo was listed on auction a few times, but every time the auction date approached it would get postponed until one day it was no longer listed. Then I received a notice from BofA saying that my mortgage note was sold to a third party and that they no longer have responsibility of my mortgage. Since then, I haven't heard anything from anybody. It's been over 3 years since I've made a payment. What is likely going on? I am fine with moving out when evicted,..but until then,...

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It sounds like your loan was service transferred. Loans are bought and sold between lenders and loan servicers. Several servicers (Ocwen and Nationstar) have bought out the servicing rights from many other servicers and loan portfolios that are no longer in business. Your loan may have been charged off as well. If you have not received any documentation from a new servicer trying to collect your mortgage, I would either hire an attorney or go to the Los Angeles County Recorder's office and pull the chain of recorded title documents for your property. It is possible a foreclosure did happen and there could be a Trustee's Deed Upon Sale recorded. If the interest in your loan was sold to another lender, an Assignment of Deed of Trust should be recorded as well and that would tell you the new lender and maybe servicer. There also may be a substitution of trustee recorded which would also show you the servicer and trustee. Or you can just keep laying low and hope nothing happens.


I have seen that take place with several clients and the answer is that it depends. You may also be in a good position to attempt a loan modification. However, at this point, I would not do anything until you discuss your matter with an attorney. It will be a confidential discussion, as all conversations with an attorney are protected. You should make sure it is an attorney that you can trust, that has experience with loan modifications, and matters related to the issues you have raised in your question. While my office has assisted several clients complete their loan modifications, I typically refer these matters to an office I trust. However, with some guidance, most matters of this nature can be taken care of on your own.


If you want to keep your property, you may be eligible for a loan modification. If you don't want to keep your property, you can short sell it. My law firm does loan modifications and we negotiate short sales for realtors. I offer free telephone consultations. We may be able to answer your questions after learning your whole situation.

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