Is this short sale fraud? (mortgage, mortgage, banks, agreement)

[box o rox]

Thanks for reading.

My x-h and I had to short sell our house in 2010. It had 3 loans on it (1st,2nd, equity.) We owed more than 50k difference between final sale, and combined total owed (all notes with same bank.)

The bank did not forgive the difference, and we signed an agreement to pay back the difference for $200/month (100 each) for 2 years and then the bank would reassess our ability to pay. At that time, it was my x's (said) intention to try to renegotiate a forgiveness of the balance.

The bank never sent either of us a bill or payment booklet for the 200/month we were supposed to be paying. As far as I know, neither of us have made any payments in the 2 years. I do know that they still consider it debt, because I called them at tax time 2011 to find out about a 1099 form, and they said there wasn't one sent because we still owe that money. I also know that the contract says that if we miss any payments, the bank can call the full balance due immediately.

My x has somehow found a way to get a rent to own agreement signed on that same property. He is moving himself and our kids in right now.

I am concerned that this may not be legal, and that I may be considered an accomplice to fraud if he does this with my knowledge (even though it is strictly without my consent.) My counselor (therapist) suggested that this may be my problem as well if I don't act properly.

I don't have funds to hire a lawyer. I am about to declare bankruptcy. Legal aid has been a dead end. Does anyone have any experience or relevant advice they could offer up? Much obliged.

[Debsi]

Who did you sell the property to in the short sale?

Is it the same person that your ex-husband is renting-to-own from?

Did one or both of you know the person who bought the property in the short sale?

[CSD610]

No one here can offer any legal help or advice. Contact the bank again and ask them if it is appropriate. The bank may be the ones doing the contract for deed with your ex husband.

[box o rox]

He says the young couple we sold it to had it up for sale, and he just happened to stop in and ask if they would be willing to rent it. They said, no, but then they got a couple of really low offers, so they put up a for rent sign, and he went back and asked about rent to own. I did not know the couple we sold to at all; he says he didn't but I have no way of knowing for sure.

So, he is looking at moving into and renting with option to buy a house that we both jointly owe over 50k on.

[box o rox]

I have thought of calling the bank, but I don't want to stir up trouble if he is doing everything legally. My kids would think I am just bitter and jealous. I am angry about the situation, but I would not send their dad to prison if I could help it. And I certainly don't want to end up there myself.

[Debsi]

If the short sale followed investor/bank guidelines - which would include not knowing the people who bought it - they are free to sell or rent it to whomever they choose.

I don't have any input for you in regards to the $50K, except to say that if a short sale was completed, that became unsecured debt. You both still owe it, as you know, but it's not "attached" to that house.

You would need a lawyer to get real answers here, sorry.

[box o rox]

Ok, thanks for your input. :-)

[aneftp]

Depending on state laws. That $50k shorted amount/unsecured debt may lead to the pursuit of a deficiency judgment on a case by case basis by the banks Hopefully, that doesn't happen. But if that does depending on state laws they can automatically garnish you wages.

This happened to my wife best friend who got hit and they took $500 each month. Until she said F that and just declared BK to have them stop the collections.

[Suncc49]

This is not fraud.... he didn't know the parties prior to the short sale and had no intent to defraud the mortgage co....

Now if it was an "arms length transaction" and bought by a close friend or family member, then yes... Fraud.