Figure arrears on defaulted note? - Posted by Troy M

import · April 21, 2018, 5:19pm

Posted by Troy M on January 25, 2002 at 20:36:33:

Thank you, Eduardo. No offense, but what exactly are you setting me straight on? I am well aware of the foreclosure procedure for trust deeds in my state (TX).

>Your question concerned figures and I was saying it may depend upon the instrument you used. This has nothing to do with bankruptcy which is another animal altogether–

It has everything to do with bankruptcy. If you read my original question, I’ve stated that I am returning a ‘Proof of Claim’ to a Bankruptcy court. Yes, my question does concern figures and if you would like to comment on that, I’m all ears/eyes.

Troy M

BTW, Are you saying that a Ch. 13 filing will not ‘stay’ a judicial foreclosure proceeding?

import · April 22, 2018, 6:40am

Figure arrears on defaulted note? - Posted by Troy M

Posted by Troy M on January 25, 2002 at 08:23:47:

In April 2001 I sold a home and took back a second lien in the amount of $12,005.00 @ 11.95%. Payable over 5 years at $266.74 per month due on the 10th beginning May 10, 2001.

Payor made 1 payment, bounced a check for the second payment, and no more. After I initiated a foreclosure, Payor filed Ch. 13 bk. Now I have a notice from the bk court and a ‘Proof of Claim’ form I must return to them. The form asks for the total amount of arrearage up to the filing date (12/03/01). My attorney says I can include fees allowed by our agreement (note) which includes late fees, NSF fees, interest. My calculations are as follows:

$25.00__ NSF Fee
$1,600.44_____ pymts from June thru Nov @ $266.74 each
$80.02__ Late fees @ 5% each x 6
$171.46___ Legal Fees
$1,876.92_____ Total

Have I computed the total correctly? Should I include additional interest on the unpaid prinipal past due, or is that coverd in the late fee? Anyone experienced in this please comment.

For those of you who want to know what happens next in this situation. The amount of arrearage is to be set up on a payment plan spread over the next 42 months, and the regular payments owed on the note are supposed to resume. We’ll see.

Thanks for any help.

Troy M

import · April 22, 2018, 6:40am

Re: Figure arrears on defaulted note? - Posted by Eduardo (OR)

Posted by Eduardo (OR) on January 25, 2002 at 15:52:31:

Troy–

Is the 2nd lien you took back a mortgage or a trust deed? Depending on the type of legal instrument you used, you may be able to accelerate the entire balance. That is, the defaulting buyer may have to come up with the entire balance owing to you, not just the amount he is currently in arrears on. Check it out.
You have consulted an attorney. Why hasn’t the attorney a. told you whether you can accelerate the loan (no. 1 above), and b. why hasn’t the attorney figured out for you the amount the defaulter owes instead of throwing it in your lap. Sounds like you didn’t consult a REAL ESTATE attorney. Remember the rule, divorce, wills, child custody, etc. attorneys don’t know squat about real estate or how to foreclose on a defaulted loan. If you don’t know how to do it yourself, always consult someone who does. --Eduardo

import · April 22, 2018, 6:40am

Re: Figure arrears on defaulted note? - Posted by Troy M

Posted by Troy M on January 25, 2002 at 16:55:03:

Thank you Eduardo, for the response. I appreciate the effort.
>1. Is the 2nd lien you took back a mortgage or a trust deed?

It is a trust deed

>you may be able to accelerate the entire balance.

Please reread my post. I initiated a foreclosure (accelerating the entire balance). Payor filed Ch. 13 bk which places an automatic stay on foreclosures and collections.

>2. You have consulted an attorney. Why hasn’t the attorney a. told you whether you can accelerate the loan (no. 1 above)

My attorney had initiated the foreclosure and he has told me whether I can accelerate the loan. I cannot. Again, Payor filed Ch. 13 bk forcing an automatic stay on foreclosures and collections.

>why hasn’t the attorney figured out for you the amount the defaulter owes instead of throwing it in your lap.

Quite frankly, I haven’t asked him to. I have a CPA I can consult if necessary, which it is not.

>Sounds like you didn’t consult a REAL ESTATE attorney. Remember the rule, divorce, wills, child custody, etc. attorneys don’t know squat about real estate or how to foreclose on a defaulted loan.

Again, reread my post please, my attorney has already initiated the foreclosure. He conducts trustee sales at the courthouse quite regularly. My attorney specializes in real estate.

Thank you for the attempt at answering the question???

Troy M

import · April 22, 2018, 6:40am

Re: Figure arrears on defaulted note? - Posted by Eduardo (OR)

Posted by Eduardo (OR) on January 25, 2002 at 18:13:47:

Hi Troy–

Glad to know you have a real estate attorney. Just to set you straight: the usual situation when you have a default on a note and trust deed (depending on how they’re written up) is that when you initiate foreclosure, the payor can cure the default by paying all missed payments plus interest. Then the loan is reinstated as if nothing had happened. If the document was a mortgage (different than a trust deed and not used as often), then the payor has to pay off the entire balance owing to you plus accrued interest. Mortgages are judicially foreclosed (by a judge) as opposed to t.d.'s which are foreclosed most often by an attorney in his office or on the courthouse steps (don’t require going before a judge). Your question concerned figures and I was saying it may depend upon the instrument you used. This has nothing to do with bankruptcy which is another animal altogether–bankruptcies come and go unexpectedly and I’m glad you got a knowledgeable attorney to help you. By the way, showing my “bias” again, although most real estate attorneys have learned how to compute mortgage amounts by necessity (although I could tell you some horror stories), I’ve never met a CPA that had a clue on this subject. Sincerely, Eduardo (OR)