QUESTION
What can be done if SBA transfers deed of trust in foreclosure?
Asked on Apr 24th, 2013 on Foreclosures - California
More details to this question:
My husband and I secured a disaster relief loan from the SBA in 2002. The deed of trust was secured on our property in Denver. Our business subsequently failed and closed in 2006. We had not made a payment on the loan since 2002. After attempting to re-finance our mortgage, we ended up filing BK in 2011, which was discharged in March of 2012. The house was the only asset and it was considered to have not assets as the liens exceeded the value of the property. The house went into foreclosure and in trying to sell it in a sheriff's sale it was pulled by the lender. I have found out that the SBA has assigned the loan to a third party, who then assigned to someone else for $10.00. The SBA loan has a statute of limitations of 10 years, which has passed. Is there anything that can be done?
1 ANSWER
I don't understand what you mean by whether anything can be done. What do you want to do? Unless the note and deed of trust state otherwise, loans can be freely assigned. But I don't understand why you care whether the loan was assigned or to whom it was assigned. I don't know anything about SBA loans, but you have to determine whether yours is a recourse or nonrecourse loan. Recourse means the lender can sue you for the difference ("deficiency") between what the house sells for at auction and the amount of the principal balance of the loan. Nonrecourse means the lender's remedy is confined to taking possession of the property through foreclosure and you can't be sued for the balance. It is also unclear to me whether any deficiency that did exist was discharged in the bankruptcy. Where did you get the 10-year statute of limitations? Does the promissory note say that? Whatever the limitations period is, it would have started to run on the date you defaulted, not on the date you signed the note.
Answered on Apr 28th, 2013 at 8:20 PM