Lien on property listed in bankruptcy?

[Pizza]

We just received a reaffirmation agreement from our attorney concerning windows on our house that were paid for with a credit card two years ago. In it, he recommends that we not reaffirm the debt and continue making payments (we quit making payments months ago).

The creditor (Wells Fargo) wants monthly payments and lists the windows as secured property with a "current market value" which they want payments on. So if we don't pay, do they get to come rip the windows out of our house? They're custom sized and would not be worth anything to them that I can think of. Could they lien the house (even though we aren't reaffirming it either)? The mortgage is also through Wells Fargo.

This sucks.

[Pizza]

Oh, and my house is homesteaded.

[IBroke]

Sounds like a scare-tactic to me...

[Pizza]

Sounds like it to me too. Shortly after posting in a panic, I found a thread on here about a similar situation concerning patio doors. It doesn't sound like they can just show up with crowbars and pry 30 holes in our house...

I'm wondering why they are listing this debt as secured and no other charges on the card as such. They also are listing the full amount of the windows at the time of installation, even though we made thousands in payments. And why a reaffirmation agreement rather than an AP? They don't contest to the dischargeability. Secured to the house? I wonder if they can tie the two together somehow since they own both debts... grrr.. stress....

[bcss]

So you charged it to a Visa or MC and now they say its a secured debt? I would tell them to go pound sand. I don't see where it is any different than anything else you charged on your credit card. Thought Texas didn't allow 2nd mortgages?

[Pizza]

The funny thing is that they haven't sent a reaffirmation agreement for the house yet.

So I guess discharging a $90,000 house doesn't bother them but not paying for windows pressed their buttons?

d. If the reaffirmed debt is secured by a security interest or lien, which has not been waived or determined to be void by a final order of the court, the following items or types of items of the debtor's goods or property remain subject to such security interest or lien in connection with the debt or debts being reaffirmed in the reaffirmation agreement describe in Part B.

Then under "Item or Type of Item", they put "Items purchased from xxxxxxxxxxxxxx Inc. $6800.00"

[despritfreya]

You did not purchase these windows on a credit card. You purchased them from some company who, instead of holding the paper, had Wells Fargo Financial finance the purchase/installation. This created a "purchase money security interest". Wells Fargo Financial is secured by the windows and could repossess them. However, just like, Best Buy, The Room Store or any other company that "finances" the purchase of larger household items, it would have to seek a Writ of Replevin in State Court before it could come knocking on your door. It is highly unlikely that such would happen.

Because WFF is secured, just like a vehicle lender, you technically have 3 choices. . . Reaffirm, Redeem or Surrender. If you choose to ignore WFF (which many successfully do), you run the risk that the lender will seek the Writ of Replevin. If you do not want this hanging over your head why not try to Redeem the windows for a few hundred dollars? Talk to your attny.

Please note that Wells Fargo Financial is not the same as Wells Fargo Mortgage hence one loan has nothing to do with the other.

Des.

[Pizza]

We used a VISA card issued by Wells Fargo to make the purchase, and the card was used for other purchases. The Window co. was paid before installation and the charge came out on our statement.

I haven't heard of the Writ of Replevin. I'll call the attorney on Monday and ask what their angle is.

[Pizza]

Re: "Wells Fargo Financial is secured by the windows and could repossess them."

I'm still having trouble figuring out how the bank could repossess 30 windows that are physically attached to a house. LOL. They can't just leave a homeowner living in swiss cheese with a door, can they? Wouldn't they have to put the old windows back? The ones that they destroyed removing?

Wouldn't the litigation, labor, storage, etc. be greater than the value of second-hand custom sized windows?

[despritfreya]

I'm still having trouble figuring out how the bank could repossess 30 windows that are physically attached to a house. . . They can't just leave a homeowner living in swiss cheese with a door, can they? Wouldn't they have to put the old windows back? The ones that they destroyed removing? Wouldn't the litigation, labor, storage, etc. be greater than the value of second-hand custom sized windows?

Unless the windows are deemed "fixturized" (and don't ask me if they are - I remember arguing years ago with Sears over tack down vs. glue down carpet) the creditor has the right to "take back its property". Not sure about its obligation to leave the premises in a livable condition. However, this issue is probably one of the reasons ignoring WFF may work.

Des.

[Pizza]

Thank you des.

I just thought of something else: Since WF is both the mortgage co. and the windows CC, and we are not reaffirming - by ripping them out, they would be destroying their own collateral. We could just move. Unless somehow they are able to afix a lien on the mortgage and force foreclosure, I'm not sure what their angle here is. Oh well. I guess we're going to find out.

[despritfreya]

Unless both entities are "Wells Fargo Bank, NA" you are dealing with two separate entities. Yes, they are owned by the same parent company but they are not the same. Nor is one entity smart enough to realize it could harm the other entity. Even if they are exactly the same, what is the likelihood that the right hand knows what the left hand is doing (or even cares for that matter)?

Des.

[Pizza]

You're right - one is WF National Bank and the other is WF Home Mortgage. That's pretty sad they wouldn't know the difference, but I guess that's true. The same parent company would be putting another 30 windows on the house it just destroyed to try to sell it again.

[bcohen]

I very seriously doubt that a bank could legally repossess windows from an occupied house, even if you had signed a contract explicitly granting them a "security interest" in them, which it appears is NOT the case. I know that here in Arizona, working in the HVAC business, we cannot legally repossess a furnace and/or air conditioner from an occupied house, even if the customer fails to pay, or their check bounces--instead, we must sue them for the money.

The only distinction appears to be for a house which has not yet been delivered to a homeowner, as companies will sometimes reposess equipment from a new house under construction, if the general contractor fails to pay. I did this personally, back in 2008--the company I was working for at the time sent me and another man to repossess a furnace, air conditoning coil, and condenser from a house under construction, because the general contractor failed to pay and then declared bankruptcy, and my boss was worried he'd lose the cost of his equipment.

[malf1204]

Windows are going to be considered a "Fixture" as they are attached to the house and cannot be repossessed. There would also be potential damage to the residence and obvious security and weather concerns if windows were removed. I work for a company that install water well pumps and we cannot repossess a well pump once installed because it is a fixture and attached to the house. Every state is different but in my state the value of the fixture must be greater than 15% of the value of the house before a lien is put in place. That said a lien is treated as a judicial proceeding and would be discharged in BK.