What is the difference if he was to raze the house and re-build. IN this case he is publicly stating that he wants to stick it to the bank.

 

This actually might make it easier for the bank to sell the land to someone that wants to build instead of trying to sell the house/land.

^ It was a very nice house....it would've sold easily.

Good for him....I salute him.

 

Are you kidding me?

 

He puts up his home as additional collateral on a business loan, defaults on it, so the bank forecloses to get paid, and it's the bank's fault?

 

I'm betting that his business loan was way more upside down than his equity, or he would have tried to work it out with the bank. I guess it's the bank's fault his business failed.

This is weak. It is even weaker that some of you are taking the "good for him" approach.

*This is an insult to all of the people who are trying to find a way out of their mess.

*This is an insult to people who didn't put their selves in a financial situation that they shouldn't have to begin with.

 

Of course banks/financial institutions have played the game to their advantage for a LONG time.

 

That is not NOW--NOR WILL IT ever be an excuse to live way above your means. The last time I checked ... reasonable people actually put thought into whether they can afford to live their lifestyle IF something were to go drastically wrong.

 

What you see here (and nearly all the time now) are people who never even considered that thought.

 

I hope he goes to jail.

This is weak. It is even weaker that some of you are taking the "good for him" approach.

*This is an insult to all of the people who are trying to find a way out of their mess.

*This is an insult to people who didn't put their selves in a financial situation that they shouldn't have to begin with.

 

Of course banks/financial institutions have played the game to their advantage for a LONG time.

 

That is not NOW--NOR WILL IT ever be an excuse to live way above your means. The last time I checked ... reasonable people actually put thought into whether they can afford to live their lifestyle IF something were to go drastically wrong.

 

What you see here (and nearly all the time now) are people who never even considered that thought.

 

I hope he goes to jail.

 

I don't think he should have done this but you are aware he is current on his mortgage and had never missed a payment correct? He had a buyer to completely pay off the mortgage and the bank refused. Its a little thing called cross collateralization that some banks bury in their notes. His business failed so they were taking his personal assets to cover the losses. I'd bet he had no idea it was there nor do probably 85-90% of other borrowers.

He is a coward and a criminal. I hope he goes to jail for this.

If his business failed it is not the banks fault. Pay your debt!

As a friend of several buddies who own small businesses. They know what can happen to their homes if their businesses fail.

Part of the risk-reward of a small business.

I don't think he should have done this but you are aware he is current on his mortgage and had never missed a payment correct? He had a buyer to completely pay off the mortgage and the bank refused. Its a little thing called cross collateralization that some banks bury in their notes. His business failed so they were taking his personal assets to cover the losses. I'd bet he had no idea it was there nor do probably 85-90% of other borrowers.

 

In order for the Bank to get a mortgage on his home securing his business loan, he would have had to have actually signed a mortgage on his home. It's not buried in some note. That is FALSE. It's a totally separate document that he (and his wife if he's married) would have had to sign. If he didn't have enough intelligence or common sense to realize what he was signing (the mortgage on his home) I can understand why his business was doing so poorly to result in the IRS putting tax liens on his business: he was stupid. Quit blaming banks for borrowers' stupidity.

This guy is a loser and will be in court for a long time and then probably to jail.

In order for the Bank to get a mortgage on his home securing his business loan, he would have had to have actually signed a mortgage on his home. It's not buried in some note. That is FALSE. It's a totally separate document that he (and his wife if he's married) would have had to sign. If he didn't have enough intelligence or common sense to realize what he was signing (the mortgage on his home) I can understand why his business was doing so poorly to result in the IRS putting tax liens on his business: he was stupid. Quit blaming banks for borrowers' stupidity.

 

Sorry LN I forgot you knew everything already....:ohbrother:

 

Here is a sample of Cross-collateralization language in a note and you guys can decide for yourselves. I've already stated that I thought he was wrong for what he did, just trying to let everyone know there are two sides to every story.

 

All future advances from Lender to Mortgagor or other future obligations of

Mortgagor to Lender under any promissory note, contract, guaranty, or other

evidence of debt executed by Mortgagor in favor of Lender executed after this

Security Instrument whether or not this Security Instrument is specifically

referenced. . . . All future advances and other future obligations are secured by

this Security Instrument even though all or part may not yet be advanced. All

future advances and other future obligations are secured as if made on the date

of this Security Instrument. Nothing in this Security Instrument shall constitute

a commitment to make additional or future loans or advances in any amount.

Any such commitment must be agreed to in a separate writing.

He is a coward and a criminal. I hope he goes to jail for this.

If his business failed it is not the banks fault. Pay your debt!

As a friend of several buddies who own small businesses. They know what can happen to their homes if their businesses fail.

Part of the risk-reward of a small business.

 

Agreed.

 

Here is the way business loans are made/underwritten by banks:

 

Business owner requests a loan for his business. If business is a new borrower for the bank or if the business doesn't have the credit worthiness to stand on it's own, the bank will normally require the business owner, as a condition to making the loan, to personally guarantee the loan (assuming the business is not a sole proprietorship, in which case the owner is already personally liable for the bank loan) and will sometimes require the business owner to secure the guarantee with a mortgage on his home or pledge personal assets such as stock, investment accounts and other personal items of value. Banks require the owners to personally guarantee the loans to non-publicly traded businesses much more often than not in my experience of representing commercial banks over the last almost 30 years. If the business has been a customer of the bank for a long, long time or has a net worth or has collateral value way in excess of the loan amount, I've seen business owners successfully negotiate out the guarantee requirement, but that is not the norm.

 

The bank wants the owners' personal guarantee for various reasons. 1. to make sure the business owner just doesn't walk away from the business and the business loan if things get tight with business and throw the business "keys on the table" for the bank to deal with; 2. to make sure that the business owner just doesn't suck all the money out of the business (if the business is held in a corporation or LLC) and transfer it to himself where the money would be out of reach of the bank unless he personally guaranteed the loan; and 3. there is not enough collateral value in the business itself to justify the amount of the loan. It is good banking practice to require the owner to guarantee the loan.

 

Some guarantees are secured by personal assets (such as the home) and some are not. A lot of that decision by the bank is based on the liquidation collateral value on the business assets pledged to the bank. For example, if the business has little hard assets (no business owned real estate, little or no equipment or inventory) the bank when looking at how it will get repaid if the business goes down, will require the business owner's guarantee to be secured with hard personal assets having enough liquidation equity to satisfy the repayment of the debt.

 

Even if he had not missed any payments on his home loan or even his business loan, most business loan documents contain terms and conditions designed to protect the bank's ability to be repaid (it is in the business, not of just making loans, but getting them repaid don't forget). A typical term is the prohibition of other third party liens attaching to the bank's collateral. I can say with a high level of confidence (without reviewing the loan documents) that the attachment of the IRS lien caused the business to be in default to the bank under the business loan, thus enabling the bank to commence legal action on the guarantee and the mortgage.

I don't feel sorry for either one, the band I am sure has made its money off the man and will no matter what. As for the man by the looks of things he was not living too far down on the hog! So it makes for a good laugh at both of them.

Sorry LN I forgot you knew everything already....:ohbrother:

 

Here is a sample of Cross-collateralization language in a note and you guys can decide for yourselves. I've already stated that I thought he was wrong for what he did, just trying to let everyone know there are two sides to every story.

 

All future advances from Lender to Mortgagor or other future obligations of

Mortgagor to Lender under any promissory note, contract, guaranty, or other

evidence of debt executed by Mortgagor in favor of Lender executed after this

Security Instrument whether or not this Security Instrument is specifically

referenced. . . . All future advances and other future obligations are secured by

this Security Instrument even though all or part may not yet be advanced. All

future advances and other future obligations are secured as if made on the date

of this Security Instrument. Nothing in this Security Instrument shall constitute

a commitment to make additional or future loans or advances in any amount.

Any such commitment must be agreed to in a separate writing.

 

Thanks for the smart comment. Says more about you than me, unfortunately for you. I can't help it if I am repeatedly correcting your erroneous posts.

 

I do know a lot about business lending. I make a living representing banks making business loans, thank you very much.

 

The clause you posted seems pretty straight forward to me. If he was too stupid to understand it and didn't have a lawyer review it for him before he signed it, then shame on him. It would be like me attempting to build my own home without having any experience building homes. If it fell apart after I completed it, who is to blame? Me.

 

Assuming he had previously granted the bank the mortgage on a prior loan (which is the only circumstance that the clause you posted would be germane to the discussion) and then subsequently personally guaranteed the business loan or owned the business as a sole proprietorship (in which case he was already personally liable to repay the business loan and wouldn't have had to sign a guarantee) when the business loan was made, that clause wouldn't have been in the Note as you originally stated and I corrected you on. It would have been in the mortgage (i.e. the "Security Instrument" as such term is used in the clause you posted).

 

And it wouldn't be hidden any where. I can assure you that the clause is in the same font size as the rest of the wording in the mortgage for all to see.

Edited February 22, 201016 yr by leatherneck

I don't feel sorry for either one, the band I am sure has made its money off the man and will no matter what. As for the man by the looks of things he was not living too far down on the hog! So it makes for a good laugh at both of them.

 

If the bank doesn't get the loan repaid, as a result of the man destroying the bank's collateral, how are you so sure it made its money off the man?

I would love to know what the man thinks he accomplished with this stunt. He still owes the bank money, he has no house now, and he'll still lose the property to the bank. He'll also probably never get another loan.

Thanks for the smart comment. Says more about you than me, unfortunately for you. I can't help it if I am repeatedly correcting your erroneous posts.

 

I do know a lot about business lending. I make a living representing banks making business loans, thank you very much.

 

The clause you posted seems pretty straight forward to me. If he was too stupid to understand it and didn't have a lawyer review it for him before he signed it, then shame on him. It would be like me attempting to build my own home without having any experience building homes. If it fell apart after I completed it, who is to blame? Me.

 

Assuming he had previously granted the bank the mortgage on a prior loan (which is the only circumstance that the clause you posted would be germane to the discussion) and then subsequently personally guaranteed the business loan or owned the business as a sole proprietorship (in which case he was already personally liable to repay the business loan and wouldn't have had to sign a guarantee) when the business loan was made, that clause wouldn't have been in the Note as you originally stated and I corrected you on. It would have been in the mortgage (i.e. the "Security Instrument" as such term is used in the clause you posted).

 

And it wouldn't be hidden any where. I can assure you that the clause is in the same font size as the rest of the wording in the mortgage for all to see.

 

I'm not sure what is says about me but you accused me of posting FALSE (bolded and everything) information. Which I did not but suggesting all my post are erroneous post is not a smart comment at all. As my understanding of the case in question a clause similar to this was included when he took out his mortgage loan. Is it his fault for not reading it, yep? Is it a completely separate mortgage or document, nope, that is what you call erroneous information. How many BGP members have a lawyer review their mortgage loan documents prior to closing?? So was he wrong? Yes, again just making the point that this guy probably had no idea when he took out his home loan that someday in the future he would lose it because of a cross-collateralization agreement. I'd just prefer it not be insinuated that I'm a know nothing liar who has it out for financial institutions, I have quite a bit of knowledge in the area myself thank you.