The Bank May Not Take the Property Even If You Want to Give it Back.

What do you do if you don't have enough money for a mortgage loan modification?
What if you can't sell you property because the equity is gone?
What if you can't get a Short Sale?
What if you can't get the money to keep your property?
What if you don't want to file for bankruptcy?

You have the option to give the property to the bank. This is normally called a deed in lieu of foreclosure. Essentially, a deed in lieu of foreclosure is when a bank agrees to take a property back to pay off the mortgage. This means there is no foreclosure. It simply becomes a written agreement between you and the bank.

This can make perfect sense for certain people. It helps you avoid public exposure of a foreclosure lawsuit. It releases you from all liability for the mortgage. In certain cases it does not affect your credit score any more than a foreclosure sale. However, the truth is, your credit score will always be negative once you start missing monthly payments, even with a foreclosure or not.

There are many people who just want the property monkey off their back. No more phone calls. No more letters. No strange people taking pictures of the house. No process server with legal papers. No public exposure of a foreclosure lawsuit. No more real estate and water taxes, insurance and repairs. No more tenants. NO MORE STRESS.

So it is reasonable to assume that if you want NO MORE STRESS, the bank should agree to take back the property and never contact you again. I mean, isn't that why the bank files for foreclosure. The reason why a bank starts foreclosure is to force the sale of the property so the bank can get the money it loaned you. We have heard time and time again that banks lose money during foreclosure. So a simple phone call to the bank should go something like this "Hello, big mortgage bank, I do not have the financial or the emotional ability to keep my property, so instead of going through a foreclosure, I will agree to give back the property. I will sign my deed over. In exchange just release me of all obligations with the mortgage." The answer from the bank should go like this "No problem, Mrs. Jones, simply sign this agreement and we'll eliminate your mortgage by taking the property back."

IF IT ONLY WAS THAT SIMPLE!!

The truth is some banks want you to fill out an application and provide a financial statement. Why? Who knows. Some banks want you to prove that the property was listed for sale before they agree to take the property. Why? Who Knows. Some banks say NO, We are not allowed to accept a Deed in Lieu of Foreclosure. Why? Who Knows.

Also, banks may have an incentive to let the foreclosure process continue. They may prefer that the owner takes care of the property. The bank does not want to hold the property as inventory aka real estate owned (REO). It can be expensive for a bank to maintain a property once they get it back.

Some banks are afraid to take properties because...There are various states that have home equity theft acts. These are laws that protect homeowners from signing their deed to an individual or company that promises to give the property back. In almost every instance the homeowner is a victim of a scam. Homeowners fall for these deceptive practice which causes them to lose their home and lose all of the equity in their property. These laws let a homeowner get their deed back within 2 years after signing, if they can prove that it violated the law. Some banks are afraid to take a deed in lieu because of these laws. However, why would a bank have any concerns, since the bank is taking the property deed in exchange for paying off the mortgage.

Banks may prefer to have the property go to auction just in case someone else buys the property. In this way, the bank gets paid back without the need to hold the property. So if a bank wants an auction, GIVE IT TO THEM. When the bank representative says "Look, we want to have a foreclosure auction to get other bidders". Tell them "Fine, I will agree to let you auction the property next week".

The truth is I have helped people contact banks and the banks foreclosing attorneys, all in an attempt to give a property back. The answer has been a consistent NO!

All this means is that a bank does not have your best interest at heart. It seems no matter how hard people try to move past their mortgage mess, banks make it difficult.

What do you do? Better make sure you get the most out of your property while you liver there.

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Don't Forget: There Is A 3 Year Moratorium On Tax Liability For Debt Forgiveness

The Mortgage Forgiveness Debt Relief Act of 2007On December 27, 2007, President Bush signed the Mortgage Forgiveness Debt Relief Act[1] of 2007 (HR 3648) into law.

This law established a 3 year moratorium that prevents any debt forgiven by a lender from being counted as income by the Internal Revenue Service (IRS). Basically, if a homeowner negotiates a short sale or any other type of debt forgiveness with a lender, the homeowner will not be liable for any taxes on the forgiven debt.

For example, if a homeowner in foreclosure gets a bank to agree to take $400,000 for an original loan amount of $500,000, then the homeowner will not have to pay any taxes on the forgiven $100,000 ($500,000 minus the $400,000).

The Mortgage Debt Relief act also extends the private mortgage insurance deductions through 2010. The deduction for private mortgage insurance allows families with an adjusted gross income of $109,000 or less to deduct all or some of their premium payments.

As it stands, the Mortgage Forgiveness Debt Relief Act only applies to a primary residence. So second homes and investment properties are out. Still, even with a second home or an investment property you may not have to pay any tax on the forgiven debt, so long as you can prove to the IRS that you were insolvent at the time. Which may or may not be tough to do.

With the Mortgage Forgiveness Debt Relief Act of 2007, as long as it’s your primary residence, you don’t have to prove anything to the IRS.

If a short sale is the best option, then this is the time to negotiate one.

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Ooohhh!!! Bank of America Pis!@* Me Off

I want to jump right into this. The following are true stories involving Bank of America ("BOA:) and it's DESPERATE debt collection practices:

1. In August 2008, BOA took over $20,000 from a joint account held by a husband and wife to pay off a business loan taken out by the husband, even though the business loan was never in the wife's name and never in the husbands name. The money was never returned.
2. In February 2009, BOA took over $26,000 from a personal account to pay off a debt that BOA AGREED TO SETTLE FOR A LOWER AMOUNT just several months earlier. The owner of the account gives thanks that I made sure the agreement was in writing. Once we called BOA, raised a ruckus and most important waived the signed agreement in their face, the money was returned a few days later.
3. Once BOA has your account no# and routing no#, it will attempt to take UNSCHEDULED payments from your bank account. Best of all, if they are unable to get the money at the beginning of the month they simply try several more times during the month until they get it. The funny thing is they seem to know when money is deposited into the account.
4. BOA will call you at hour home, work, and cell phone several times a day. Even if you tell them not to. The best part. You may never have given them your cell or home number..HMMM.
5. Even if you have a zero balance and your account is supposedly closed. BOA will keep it open in order to accrue fees.
6. BOA will send out statements that may show you have an available balance even though in reality you do not.
7. If you make an online request to BOA to pay a bill, the normal procedure is to have BOA prepare a paper check and mail it out. Once the check is deposited then under normal circumstances the money is withdrawn from the sender's account. NOT SO with BOA. BOA has a policy that it may decide to take the money out of the sender's account even if the other side has not received or cash the check. In other words, if you ask BOA to send out a payment, they will debit your account for the amount of the payment, even if the other person or business has not deposited the check. The Best Part: when BOA was asked how do they determine if, after a payment request, the money will be withdrawn immediately as opposed to waiting until the other side receives the check, BOA said "WE CAN'T TELL YOU". We said "Huh". Then we asked, what if we don't want you to withdraw the money until the other person gets the check and deposits it? BOA said "YOU DON'T HAVE THE OPTION, BOA DECIDES". We then said "What the ...".

Thus beginning my BOA watch on this blog. These stories are just swirling around about BOA. Clearly, these tactics by BOA will not win it new clients. When a business engages in acts that will clearly cause it to lose clients, when a bank is no longer interested in customer retention, especially, a bank that has received billions from taxpayers, there can be only one conclusion:

BOA is at the edge. It is totally desperate and it's fighting for survival. Every penny counts, so at the recent corporate pep rally, the BOA workers must have been told. "You must use every means necessary to get money from our clients. We will give a 10 day trip to Hawaii, Big Island, all expense paid, including your salary, for the department that can collect the most money from our clients."

BOA is in trouble and there seems to be nothing that can save it. It is in preservation mode. Customer be damned. BOA's new motto maybe "We can get new customers down the road, We need money right now. Grab it. Get it. We don't care how."

So my advice:

* Do not keep all of your money and accounts with BOA. Open up separate checking, savings, and business accounts with a few stable banks.
* Close all accounts that you have given your routing and account number. Reopen with new accounts, start fresh, and be extremely selective with giving out that information.
* Get Everything in Writing. No excuse.
* Keep a Contact log, detailing every conversation, every rep, with dates and times. This is for your future reference.

If you have a BOA horror story please share it with us.

Stay strong.

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Welcome One Welcome All

Thank you for tuning in to NEVER SIGN YOUR DEED. This site is the populist fight back by ordinary people and small businesses against all kinds of scams, programs, giveaways, and bailouts that use your money and assets. This isn't about Madoff types only. I recall that Nouriel Roubini commented on Madoff by saying "Madoff is a reflection of" all of us, our society. Let's face it, everyone was on the gravy train to easy money "by any means necessary". Some people "knowingly" fudged their financials to get loans or get in the door. What's a little lie like "I made $90,000" when you really made "$60,000." Or how about AIG taking $160 billion dollars in taxpayer money, and then giving it too other financially strapped business (that also took some type of bailout). Hmmm. AIG says we have to pay out debt to these guys, to the "counter parties". What about paying back the tax payer. You owe them too. Greed was everywhere. There are countless stories, countless ironies, countless villains, some hero's - at the end of it all, we all had are hand out for a piece. I mean...I did too. That said, let's get to the nitty gritty. For most people THE DEED symbolized your ownership of the the ULTIMATE AMERICAN DREAM. It is your, somewhat, unquestionable right to control land and the house on it (except for governmental eminent domain). NEVER SIGN YOUR DEED is about your unquestionable right to control and protect Your ULTIMATE AMERICAN DREAM. Whatever your AMERICAN DREAM is, no one can take it from you. NEVER SIGN YOUR DEED means even in this difficult economic time, you, the ordinary citizen, can find negotiating leverage to eliminate debt, protect your wealth and get more money. You can protect yourself and go for your "bailout". If certain banks and big corporations can use your resources at your expense, then you certainly have the right to use their resources at their expense. So let's begin our journey.

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