CitiFinancial HELOC settlement letter received --plz. advice

I have received a HELOC settlement letter from Citifinancial. It states the following,

Citifinancial Mortgage has authorized NCO Financial Systems Inc. To collect on their behalf the balance of 175,000 by remitting $17,500 in certified funds by 3/18/10 to avoid additional collection action, your account will be considered satisifed and if applicable all liens and or judgements will be satisified and released.


Can you plz. advice if the above will get rid of my HELOC once i have paid the amount or can you suggest what I should ask them to write in a letter to avoid any future collections, litigation and clear name on the title.

It will. This is a settlement notification. However, you should check the tax implications of this. You may get a 1099A at the end of the year with the unpaid balance reported as income to you for which you will owe income tax.

Thanks CVANP for the reply. When i read the letter it does not give me any guarantee that once i pay them then the amount will be considered settled. how do u suggest i make the payment and also if there are any wordings I can write on either cashiers check or money order or any other secured way of payment.

carefully read this letter before you pay anything, make sure there isnt any catch to it. wish you could post it somehow so i could review it.

are you sure it says Helco or does it say Hilco ? Hilco is a debt purchaser thats why i ask.

anyways if its an actually settlement letter for 17.5k on 175k, that is a really good deal, hope you have the money to settle.

another thing is you can call them letting them know youve gotten the mailed letter but you are requesting an official letter faxed to you so you can pay it, like i said these mailed letters are just to draw you in, get them to type up an official letter to fax to you.

To me this just says you are out of collections and they can remove the liens and/or judgements for your past due amount. A HELOC is a loan against your house I can't imagine that they would release it for 10% and then let you keep the house.

I would definately ask for an explanation of the word "satisfied" as opposed to "settled" and that make sure they are releasing the trust deed from the property not just the lien/judgement because you didn't pay on time.

I'm a real estate agent and I have never ever seen a bank just give someone a break on their HELOC and let them keep the house. Also, the 1099 on this will be murderous. Make sure you talk to a tax professional on how much tax you will owe next year

Wow you need to get out more. Seriously. There are offer letters of this type going out every day especially in places like Las Vegas where people are severely underwater and declaring BK. Just another reason why the real estate profession gets such a bad name because people in it consider themselves to be know-it-alls and really don't know much of anything. if you want to see the huge volume of settlements going out on HELOCs,read loansafe.org or bkforum. Aurrora offered everyone a 30% settlement a few mos ago. This deal of 10% is outstanding and unusual but it is not unheard of and I think citi is pretty good to deal with.

Well the last time someone told me that had settled their HELOC the title company said it was still on title. When the 2nd was notified they stated if the house was sold any proceeds had to go to them. It was not settled and since the house was being sold, the 2nd wanted their money. The lien was still there just not being collected on until sale.

THAT IS WHY I SAID YOU MUST MAKE SURE THEY WILL RELEASE THE LIEN. Guess you should read a little better. Once a HELOC goes into foreclosure status, "satisfying" means that you have paid the past due amount and the NOD is released from the house.

I also want to mention that as a a real estate agent I only deal with houses that are being BOUGHT and SOLD. Someone in financial trouble that can't pay their mortgage doesn't call me - they call a financial specialist. All I know is that we get a contract on a house and then find out it can't close because someone read something into a letter that wasn't quite right. By the way, in my transaction I asked the listing agent to ask the sellers if they ever received a 1099 for the difference. They had not.