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A friend of mine is going through foreclosure on his house. Bank X has his mortgage. He also banks at Bank X where he has a checking account. Should he remove money from his checking account leaving just a small amount to cover his other expense checks?
I guess my question is: Can Bank X wipe out his checking account balance to try and get at least some money from him in this foreclosure action?
[QUOTE=Tyme2fish;488778]A friend of mine is going through foreclosure on his house. Bank X has his mortgage. He also banks at Bank X where he has a checking account. Should he remove money from his checking account leaving just a small amount to cover his other expense checks?
I guess my question is: Can Bank X wipe out his checking account balance to try and get at least some money from him in this foreclosure action?[/QUOTE]
Not legally.........I think if he went into bankruptcy though, that is a different story.........
Later,
GEo
I would not trust the bank as far as I could throw it. Who knows what loopholes they can come up with. I would change banks yesterday and not chance it
My sister-in-law worked in the foreclosure dept at a bank in Ohio. She said under the newer rules people are able to stay in their house for months, even over a year without paying anything on their mortgage after the bank forecloses. A lawyer can stall the process for a long time, and during the entire process the borrower has to pay nothing.
I don't think the bank can confiscate anything except the house, only the courts can take liquid assets.
If your friend has enough money in the bank to worry about it, why didn't he just pay his house payment?
Amen to previous reply.
He has less than $1,000.00 in the bank checking account. I don't know all the circumstances but the bank wants 5k in the next 3 months...impossible for him.
Let's not kick a man when he's down. I just asked a question if the bank could take his money.
He doesn't live in a Mcmansion. A little one bedroom farmhouse built in 1898. He needs a new roof which also is impossible for him to pay. His wife left him in 2007 and he's been struggling since that time, working two jobs, to meet his financial obligations.
I hope your friend has been in touch with an attorney somehow. I know he can't afford to pay a lawyer at this point, but from doing a Google search I can see that there are at least a few services available, like Indiana Legal Services - [URL]http://www.indianajustice.org/Data/DocumentLibrary/Documents/1099151393.21/view_article_publicweb?topic_id=1621200[/URL]
But I think you have the answer to your basic question: No, they can't just seize the money in his account because they're foreclosing on his mortgage.
[QUOTE=Tyme2fish;488826]He has less than $1,000.00 in the bank checking account. I don't know all the circumstances but the bank wants 5k in the next 3 months...impossible for him.
Let's not kick a man when he's down. I just asked a question if the bank could take his money.
He doesn't live in a Mcmansion. A little one bedroom farmhouse built in 1898. He needs a new roof which also is impossible for him to pay. His wife left him in 2007 and he's been struggling since that time, working two jobs, to meet his financial obligations.[/QUOTE]
I too just asked a question. I apologize if it came off like I was kicking him, that was not my intent.
Your friend can help help himself a lot if he wants to keep his house, 3 months is a long time.
If he has internet access, have him surf to [url]http://www.makinghomeaffordable.gov/Pages/default.aspx[/url] and check it out. If not, HUD has a number he can call to have his options explained, 888-995-4673. If his income is low enough that he can't come up with $1650 each of the next 3 months, he may qualify for some type of assistance. It can't hurt to try.
If he has debt other than his mortgage, suggest to him that he find out about Dave Ramsey. Dave is one of the most inspirational people on the planet, and his strategy has helped hundreds of thousands of people (including myself) get their financial affairs in order. If he takes advantage of Dave's program your friend may even be able to save his house.
I do think the bank may be able freeze his checking account for the foreclosure itself. He needs to read every word of his contract with the lienholder. I paid cash for the house I'm living in now but still have an old contract from when I bought a house in 1989 and sold it in 1997. There is a clause in it that says if we defaulted on the loan we must pay ALL the legal expenses for the lienholder to recover the default and/or for the foreclosure.
If I was facing what your friend is, I think I would clean out my checking account and pay all my bills in cash in person, if owed locally, and by money order if out of town. Maybe he could do that until the foreclosure is settled and then open a new checking account at another bank. One bank can find out if he has an account at another bank if they have access to his Social Security number. Nothing is secret anymore and that's why I said wait until the foreclosure is settled.
Since the house is old and small and in a bad state of disrepair, the bank may not put any effort toward evicting your friend. They know it's going to take a lot of money to bring it up to standard and probably still won't be able to sell it for enough money to break even. With as many houses as there are in foreclosure, the bank is going to be looking for the more expensive ones to sell. jmo
In a situation where this is just a 1st mortgage only - the mortgage is secured against the property.
If there is a 2nd mortgage - I have seen multiple times where a 2nd lien holder goes to court, gets a judgement, and garnishes a checking account.
Banks don't have that kind of power. If you live in a judicial state they have to get a court judgment to collect funds. If you live in a trustee deed state and you have an unprotected second then those often go to collections.
Freezing your access to your property or funds in an account is equivalent to interfering with your ownership there of....and that takes a judge to do that, the bank can't unilaterally do that.