Groups preying on distressed homeowners have found another angle for exploiting those who have lost their home. As if there was not enough already for distressed homeowners to concern themselves over, now those who have been through foreclosure or a short sale with a HELOC need to be on the lookout for persons and companies hoping to squeeze another buck out of their already rung out pockets.
Most notable among these groups is Heritage Pacific Financial (“HPF”). The Texas based collection company is attempts to collect on second-mortgage debt on previously foreclosed properties regardless of whether the debt was a cash-out HELOC or purchase money second.
California, similar to Arizona, is an anti-deficiency state. Also like us, California’s statute protects purchase money in the event of a Trustee’s Sale or foreclosure. However, those statutory protections can be trumped in cases of mortgage fraud – that tends to be HPF’s biggest claim.
HPF, and groups similar to them, is purchasing the second lien notes on the foreclosed properties for what is likely pennies on the dollar in hopes they will then collect some portion of the amount due on the face of the note. The primary tactic is to claim the homeowner intentionally misrepresented their income, or rather committed fraud on their loan application.
Presently HPF has filed more than 200 suits seeking deficiency payment for debts in California. Fortunately homeowners are not lying down but rather are fighting back. A call-action suit has been filed by many of the former homeowners against HPF.
Why does this matter to Arizona homeowners? Don’t be surprised if HPF or copy-cat groups like them begin showing up in Arizona. The primary goal is to recover roughly 20% of the note’s balance. Basically they hope to scare the homeowner into settling the claim. It is a despicable, ruthless, and cowardly way for people to make a buck – especially when those they go after are the ones in need of some relief in their lives.
The Wells Realty & Law Groups look forward to helping you and providing assistance with your legal needs. Call us at 480-428-3290 to schedule a LEGAL CONSULTATION to know your rights, and your liability with your HELOC.