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Settlement Of Mortgages

Submitted by on Fri, 02/27/2009 - 09:00
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I have 2 mortgages that if the lenders would settle for 50%? 75%? would consider paying off. The loans are not in arrears and never have been. Both amount to around $100,000 each so have an encentive to pay off. Is this possible?


Heloc Master,

Do you mean that you have to go the route of Bankrupcy or do you mean just threaten them with bankruptcy and then settle. I have tried it that way, but they dont seem to care....they told me to give them the case no once I file.

Would you mind elaborating a little bit more on how you do it?


Submitted by on Thu, 08/13/2009 - 14:37

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Quote:

Guys, all you need to do is talk to the Loss Mittigation Dept. Have all your facts straight and simply tell them you are looking to settle out of bankruptcy court and offer them 5%. This means (as in my case) a 50k HELOC can be settled in full by simply sending them a casheir's check for 2500.00. Doing it for friends and family now... Mine is done.


I'm glad you had luck with your settlement, but this advice is not something that would work for most people. Plus, anti-deficiency laws differ by state. Settling HELOC loans is all about having leverage and who has it, the homeowner or the lender.


Submitted by ball_mich on Fri, 08/14/2009 - 10:39

ball_mich

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I spoke w/ the negotiator yesterday, she said they'd take 80% of the loan, I offer 10%, she said no, but then went down to 50% right away, then wanted to know my counter offer, I said 15%, she said put it in writing and fax it to her along with my recent 401k statements and a list of my personal assets, where the funds for the settlement would be coming from, and they would consider it and recontact me. I have already provided them with paystubs, etc. so I don't feel like I need to provide any additional documentation. She asked me about my hardship, and it's a move due to job relocation. I'm just wondering if I play ball w/ the negotiator or not at this point. If short sale they get nothing, so I feel like the 10% initial offer was good enough but gave 15% to up the ante a bit. Either way, it sounds like once I'm done dealing with the negotiator they flip me to another department, and I giving them too much right now or am I in the final stretch here...?


Submitted by on Fri, 08/14/2009 - 15:14

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Chris,

Is your loan non-recourseable? If so, then I would think you could do better on the negotiation. If it is a recoursable loan, I would jump on the offer and settle it at 15%.

I don't think they can touch your 401k or retirement accounts if they try to seek deficiency. If you are sending those documents just to show where the funds are coming from, it should be OK.

Let me know if you do get a final settlement. How much is your HELOC worth?


Submitted by on Mon, 08/17/2009 - 10:20

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Quote:

Either way, it sounds like once I'm done dealing with the negotiator they flip me to another department, and I giving them too much right now or am I in the final stretch here...?


Well, I think a 15% settlement is a pretty good success on most debts. But the reality is this is all a matter of who has the leverage in this situation, and as the Guest poster pointed out, if the debt is non-recourse or recourse dictates that (as do your state anti-deficiency laws).

My debt was recourse (even though I would have fought against it), so I felt pretty good with my 17% settlement.

Good luck.


Submitted by ball_mich on Thu, 08/20/2009 - 16:08

ball_mich

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Guys,

So here is an update on my HELOC ( I have been posting under guest and had a couple of posts in reply to Ball-Mich posts) I would appreciate if you guys can give me your inputs -

I had offered $3K to settle $84K on a non-recourse purchase money HELOC. My negotiator called me today and said she needs more documents like my 2008 W-2, 401K, Checking/Savings account statement etc. I told her I will fax it to her. Then she said that she noticed I was offering $3K and there is no way they would settle for that much. She said the least they can settle for is 50% = $44k. I was like there is no way I can settle for that much...I would rather let the house foreclose. I said that means I dont need to send any more documents as that is not an acceptable settlement. And she said thats fine.....she will note on the account that the settlement was declined. She was pretty cold.

Now do you guys think I should send in an counter offer of setttlement. The max I can go to is 10%. Should I just fax her the documents with a new settlement of 10% or should I wait.

Any responses will be highly appreciated.

Thanks,


Submitted by on Mon, 08/24/2009 - 13:57

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Guest - I would not fax them any documents. I didn't have to when I settled, although they did request them. At the time my settlement was negotiated, when the debt was held in the recoveries department (after charge-off), all they required was a verbal run-down of my income and expenses. No verification of documents... And after I gave that to them verbally, the approval of the settlement took less than a couple of minutes to come back.

If your debt hasn't charged off yet, I'd sit tight. I think the recoveries department has more latitude to negotiate without document verification, than the department you are currently dealing with.


Submitted by ball_mich on Mon, 08/24/2009 - 14:49

ball_mich

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Thanks Ball_Mich. I was a little confused because she told me that she will note the account that the settlement was declined. Was confused if I should just keep the negotiations rolling or let her close the account and send it to other dept.

Knowing that you were successful the way you approached it, I am just inclined to sit tight and wait till it is charged off and goes to the recovery dept. Although the difference is, I do want to keep my house if at all possible....my first loan is under review for modification and hopefully they will come back with a better deal....if so I might pay the first and just ignore the second until it comes to a point where I can negotiate a resoanable settlement.


Submitted by on Tue, 08/25/2009 - 09:27

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Quote:

Thanks Ball_Mich. I was a little confused because she told me that she will note the account that the settlement was declined. Was confused if I should just keep the negotiations rolling or let her close the account and send it to other dept.


Well, I intended to keep negoatiating with them, but the settlement negotiator assigned to me never responded to my v-mails or faxes. And she never answered her phone either. So I "involuntarily" went to charge-off. But for me, it turned out well, since the recoveries department worked with me to reach a settlement figure. I hope that it works for you too.


Submitted by ball_mich on Tue, 08/25/2009 - 10:00

ball_mich

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Hi Ball_Mich,

Thanks for your reply. I had one more question....how do you know if the account has been charged off....I called HELOC settlement dept and they said it is charged off and then backed off and said it may be very close to being charged off. Also on my PMA checking account, it no longer shows up as one of the accounts. I am actually hoping that they charge it off so that it becomes easier to negotiate.


Submitted by on Wed, 08/26/2009 - 15:49

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Quote:

Thanks for your reply. I had one more question....how do you know if the account has been charged off....I called HELOC settlement dept and they said it is charged off and then backed off and said it may be very close to being charged off. Also on my PMA checking account, it no longer shows up as one of the accounts. I am actually hoping that they charge it off so that it becomes easier to negotiate.


Interesting, I closed my PMA account and moved my bank account elsewhere. With my delinquent mortgage, HELOC, and CC at Wells, I was afraid they attach my bank account. So I can't speak to the PMA not showing the account, but I can say that I lost access to viewing the account online. I logged in, but the HELOC and mortgage accounts were no longer listed there (my credit card stayed though).

Anyway, I know when it charged off because when I called my settlement negotiator in the loss mitigation department, and she didn't answer like normal, I "zeroed out" to talk to another representative. That person said that I had already charged off, the day before, and I now needed to deal with the Recoveries department. Then they gave me the phone number for that department (800-361-9965).

Other than that, they didn't send any kind of notification of the charge-off. But they did tell me a couple of times that I'd charge off at the 180 day mark.


Submitted by ball_mich on Wed, 08/26/2009 - 17:14

ball_mich

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Thats exactly what happened with me...the rep intially said it has been charged off and then backed off and said it is very close to being charged off...can you pay $321 to not let it charge off...and I said no.

I have moved my deposits and money to other account but I let the PMA checking account open...I was able to see the HELOC account online until 2 weeks back but now its no longer there....I suspect they might have decided to charge it off.

I highly appreciate your replies. You have been very helpful.

Thanks
A


Submitted by on Wed, 08/26/2009 - 17:30

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Ball_Mich,

Can you double check the number you gave me....I tried calling that number but it doesnt seem to be the correct one. I called the Heloc settlement department again and they confirmed that my HELOC has been charged off. I wanted to get in touch with the recovery department to start the negotiation if I can....did you first call the recovery department or did they call you to settle?


Submitted by on Wed, 08/26/2009 - 18:03

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My apologies, I had a typo in the Recoveries Department phone number. The correct number: 800-361-9985

I tried to edit the orginal post to correct it, but it won't let me.

Although I can't remember for certain, I generally initiate all calls and rarely answer the phone for creditors. So I probably called them. Plus, I tend to make my calls early in the morning before I go to work, and since I'm in the PT zone it tends to work since Wells tends to work based upon the CT zone.

I spoke with Joe P. at x 15958 and found him to be a pretty straight shooter and easy to talk to.


Submitted by ball_mich on Wed, 08/26/2009 - 18:28

ball_mich

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Thanks Ball_Mich,

I just called that number and its strange because the guy there said it has not been charged off yet and he wasn't sure why the other department said it has been charged off.

Also he said that there is no way they will take 10% and was threatening that Wells will pursue the money after foreclosure.....I told him that its purchase money and also you only have one action rule so they can sue me for deficiency.....if nothing I would go for bankruptcy to which he replied that we will get 20% out of bankruptcy...so we prefer that you go that route....He was kinda rude and trying to scare me.


Submitted by on Thu, 08/27/2009 - 09:53

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I'm sorry, my experience with that group was not like that. I will say though, that they didn't immediately jump at my offer. They started at 30-35% or thereabouts as the "lowest" number they could go to. I said $xxxx is all that I have to work with. Then at the end of the call I said I'd call some family members to see what I could borrow. I did this once or twice... then I got them to meet me at my $xxxx which was 17% of the balance. I never changed my amount either, I just stuck with it.

As far as mentioning BK, the most I said was that I'm doing what I can to avoid it. Just to let them know it's on the radar, but not in a way that could be construed as threatening or gaining leverage. In talking to my unsecured creditors I've tried to use the BK card, but it hasn't worked well for me. Generally they just say "fine" and tell them to give them my attorney's name and case nubmer when I do. So I really have stopped using that.

I would just stay consisent with your 10%, and once you actually charge-off, that might grease the wheels a little bit.


Submitted by ball_mich on Thu, 08/27/2009 - 15:00

ball_mich

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Yeah, I guess I just need to stick with it. I have used BK card on my unsecured creditors and I gave them some attorney's information that I met with. That actually stopped the phone calls. Atleast for now!!!! I am trying to settle with them as well, but normally it takes about 150 days before they are willing to go the settlement route at a good discount.

For HELOC, if they do not negotiate, I do not intend to keep the property. Am waiting on the first to give me an answer on the loan mod and then I might decided how to deal with them.

Man, this is very stressful! Its good that there are people like you out there who are willing to help.

Thanks,


Submitted by on Fri, 08/28/2009 - 08:40

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I'm glad I found this thread as I'm going through the same thing. I've talked to Wells Fargo regarding my HELOC which I owe $32K on. First mortgage is 127K, but the value of my condo here in Las Vegas has dropped to approx. 50-60K.

The last I spoke to them, the girl on the other end didn't seem to be all that knowing, telling me Nevada is a debt-forgiveness state. Had I been recording the conversation myself, I would have said thanks! and taken them to court had they tried to pursue me, as it was clear she didn't know what she was talking about.

I have told them I would like to settle, and got the same info (send your pay stubs, forms, etc. to a fax number). My condition is that I've been unemployed since April 1st, and started receiving unemployment benefits the first week in July because I had a severance package. Regardless, I don't intend to provide them with any financial information because I still need to a) move, b) settle with others, c) find a job.

The interesting thing I've noted is that they do settle, though it seems to be on a case by case basis. To me, this brings up all sorts of issues; understanding that no two cases are alike, the manner in which you're treated shouldn't differ--it should be consistent and if Tom in Nebraska settles for 10%, then Jane in New Jersey should be able, to. So, I'm wondering if push comes to shove, if it's worth threatening to take them to court over this as there surely has to be some unfair practices occurring. The girl whom I spoke to said they don't normally settle, but hey, the facts say otherwise.


Submitted by on Wed, 09/02/2009 - 16:54

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Quote:

Originally Posted by Anonymous
The interesting thing I've noted is that they do settle, though it seems to be on a case by case basis. To me, this brings up all sorts of issues; understanding that no two cases are alike, the manner in which you're treated shouldn't differ--it should be consistent and if Tom in Nebraska settles for 10%, then Jane in New Jersey should be able, to. So, I'm wondering if push comes to shove, if it's worth threatening to take them to court over this as there surely has to be some unfair practices occurring. The girl whom I spoke to said they don't normally settle, but hey, the facts say otherwise.


I don't think you'll get anywhere with that. They don't HAVE to settle with you at all. Further, YOU are under contract to repay a sum of money to them. If anyone gets sued in this equation, it's likely to be you, unless they somehow violate your rights in their collection efforts. In my experience with Wells, they always worked above the line, so to say.

If you are going to threaten a lawsuit, you are probably better off citing RESPA and/or TILA violations. That would probably get you the best traction, if you are wanting to threaten them with a lawsuit.

In the mean time, just be aware that they aren't going to jump at the chance to settle with you. To get the best settlement possible, you really need to wait until your account charges off, in my experience, otherwise the other departments may not have the authority to settle the debt (or at least not for the balance you've seen in this thread).


Submitted by ball_mich on Wed, 09/09/2009 - 13:52

ball_mich

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Great thread guys! Keep it up... Just wanted to ask a question. I'm not up-side-down (yet) and am currently getting mod done for 1st load via another bank. Been told by WF that there is no way they will settle unless property listed as foreclosure or shortsale for >3mo. True? What do you think? I provided my income and etc. and 11% offer.


Submitted by on Thu, 10/08/2009 - 12:48

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Quote:

Originally Posted by Anonymous
Great thread guys! Keep it up... Just wanted to ask a question. I'm not up-side-down (yet) and am currently getting mod done for 1st load via another bank. Been told by WF that there is no way they will settle unless property listed as foreclosure or shortsale for >3mo. True? What do you think? I provided my income and etc. and 11% offer.


If you are not upside down, I'm not sure what their incentive is to settle with you. Generally speaking, this means that they'd probably receive more from forcing a foreclosure sale than settling the balance with you.

I did not have my property listed as a foreclosure or short sale, but my HELOC loan was delinquent by 180+ days. That is when they became serious about settling with me.


Submitted by ball_mich on Thu, 10/08/2009 - 13:15

ball_mich

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Quote:

Originally Posted by Anonymous
Thanks ball_mich, would you know where I can look up any info on if 2nd mortgage (WF) can try to collect even if I sell property????

Thanks for any feedback!


I don't think there is such a source. Also, it will differ by state. You should look up the anti-deficiency laws in your state. That will determine whether or not they can come after you for the balance left on your loan after a foreclosure or failure to pay.

In terms of "selling" the property, I don't think you can sell it and not pay off the lien holders. I'm pretty sure the lenders receive the funds before you see any. But I think maybe you meant just failure to pay or if you allow the house to foreclose and the 2nd doesn't get paid out in full.


Submitted by ball_mich on Fri, 10/09/2009 - 13:07

ball_mich

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This has been a very informative thread! Here is my situation...home valued currently at around 170k, no first mortgage but a HELOC for 150k and a personal secured LOC for 180k. I'm not sure who would have priority on the lien. Initially the personal LOC was a fefinance of the 150k HELOC, they paid it down to 0.00 but never closed the account. Well, a few months later I received an annual fee statement from the prior HELOC. I called and said I thought the account had been closed, and they said it was paid down to 0 but never closed. I asked if the LOC was still available to me and she said it was. Well, I was in the middle of starting my own business and needed access to funds and used it. Long story short, I lost my job and have a permanent condition as a result of a work place accident. I have been current on both loans (I have no other debt) as they are interest only, but I know when rates go back up I'm screwed. I have 10k still in savings.

Do you think one or the other would be willing to settle? I can manage one loan, but not 2. If I file bankruptcy and foreclose one will be unsecured as it is (according to the law Obama signed in Feb. '09).


Submitted by on Sat, 12/19/2009 - 13:01

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Quote:

Originally Posted by Anonymous
This has been a very informative thread! Here is my situation...home valued currently at around 170k, no first mortgage but a HELOC for 150k and a personal secured LOC for 180k. I'm not sure who would have priority on the lien. Initially the personal LOC was a fefinance of the 150k HELOC, they paid it down to 0.00 but never closed the account. Well, a few months later I received an annual fee statement from the prior HELOC. I called and said I thought the account had been closed, and they said it was paid down to 0 but never closed. I asked if the LOC was still available to me and she said it was. Well, I was in the middle of starting my own business and needed access to funds and used it. Long story short, I lost my job and have a permanent condition as a result of a work place accident. I have been current on both loans (I have no other debt) as they are interest only, but I know when rates go back up I'm screwed. I have 10k still in savings.

Do you think one or the other would be willing to settle? I can manage one loan, but not 2. If I file bankruptcy and foreclose one will be unsecured as it is (according to the law Obama signed in Feb. '09).


You have a complicated situation, and it may be best to consult a BK lawyer for advice.

I think the first question is whether you have the cash available to settle either of these loans? When you are talking about loans of this size, even a 20% settlement is still $30k. You said you have $10k, but I don't think that's enough to settle either of the loans, as it's less than 7% of the smaller of the loans. If you can't get a little more, then settlement probably isn't an option. But if you do have access to more, this is what I'd recommend for your first steps:

1. Know your state's anti-deficiency laws. They differ by state. I don't want to give you any advice on this matter, as I really only am familiar with California's laws. You can probably google around and find quite a bit, which is what I did to become familiar with California law.

2. Find out which loan has the priority on your residence, and which has second. In you loan documents, it's probably spelled out. Any time there are two lenders taking the same collateral for their loans, there is some inter-creditor agreement or language which lays out the priority of claims.

3. Understand if these are recourse or non-recourse loans. My non-purchase money loans are recourse, which means even if they foreclose your home, any money still due after they sell your home, they CAN sue you for that balance. If they were to get a judgement, they could garnish wages, etc. If they are non-recourse, they really can't do much other than foreclose on the home. This will tell you how much leverage you have with the lender to get the lowest possible settlement.


Submitted by ball_mich on Thu, 12/24/2009 - 09:49

ball_mich

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Quote:


FYI - In terms of modification of the HELOC, if that is your goal, have you talked to their collections people yet? Man, every time I do, they try to force me into a modification process. They keep asking about my income, expenses, for copies of my tax return and pay stubs. After I decline to provide that information, they say something like "we're taking note that you are declining modification assistance". Then I tell them that isn't true, I'm just declining to provide personal information. What kind of HELOC modification are you looking for? When I asked them what kind of changes a modification would make, it seemed like it was mostly a very small interest rate decrease and pushing the maturity of the line out a year or two. Nothing that seemd to help me much.


If you want help with your loan, you NEED to provide your mortgage company with this information. How else can they determine if you qualify for any sort of modification? They have every right to request for this and for your hardship. Because they have a right to know why you are not paying them as you did sign the mortgage note, correct? And they are only asking to see if they can help you save your house, so help yourself and provide it.

Oh and by the way your Heloc probably will not foreclose on you. Unless they are in 1st lien postion, which I doubt they are. That's probably why they are requesting your "personal information" to try to settle or modify your loan.


Submitted by loss mitigation on Wed, 02/10/2010 - 20:02

loss mitigation

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[QUOTE=loss mitigation;652331]If you want help with your loan, you NEED to provide your mortgage company with this information. How else can they determine if you qualify for any sort of modification? They have every right to request for this and for your hardship. Because they have a right to know why you are not paying them as you did sign the mortgage note, correct? And they are only asking to see if they can help you save your house, so help yourself and provide it.

Oh and by the way your Heloc probably will not foreclose on you. Unless they are in 1st lien postion, which I doubt they are. That's probably why they are requesting your "personal information" to try to settle or modify your loan.[/QUOTE]

Actually, I proved that I didn't need to prove them with any personal information or documentation. Despite telling me that it was a requirement, they settled my HELOC loan for around 17%, if I recall correctly. And I provided them nothing more than what I had been saying all along during my 7 month of phone calls, and that was just my story. In the end, that was sufficient.

I wish the 2nd had chosen to foreclose, then I wouldn't have had to settle with them at all, as under the California one action rule, they wouldn't be able to seek a deficiency judgement. But as it were, I knew they weren't going to foreclose, so I settled them to avoid the deficiency action.

Ultimately, the first did foreclose the home, about 3 months after I settled the HELOC.


Submitted by ball_mich on Thu, 02/11/2010 - 09:54

ball_mich

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Quote:

Originally Posted by danothemano
I am about 180 days on a $100k HELOC that will be wiped out in foreclosure of the first. Both are WF. The have me in a delayed foreclosure date with the first and the second keeps extending the chargeoff. I would like to settle the 2nd. I'm in Missouri which has recourse on the HELOC.


It's a tough situation, I'm sorry. Have you mentioned settlement to the loss mitigation person/negotiator that WF HELOC assigned to you? In my experience, the negotiator was awfully difficult to work with and kept requesting copies of my personal financial statements, monthly budget, bank accounts, etc. I refused to provide any of that and cited that fact that they state any/all information is to be used to collect a debt at the beginning of each call, therefore, they couldn't expect me to provide anything to them. In the end, I didn't settle my HELOC until after charge-off, and it was much easier to negotiate with those folks.

But I think bringing up the topic is the first step, if it hasn't been discussed yet. That way they know that settlement is a possibility.


Submitted by ball_mich on Thu, 02/11/2010 - 10:00

ball_mich

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Hi,

I am planning to settle my second HELOC($106) with WF, which was taken when we purchased the home in 2006 in California. I think it is a purchase non-recourse loan(I dont know how to confirm this). I am current on my payment so far till last month and my next one is coming this 1st.

My first is with Citi - $570

The higher end of appraisal would be around $610-$620, so there is essentially $40-50k worth of equity.

Would WF work with me on a settlement.

Thanks..


Submitted by on Tue, 02/16/2010 - 12:25

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Quote:

Originally Posted by Anonymous
Hi,

I am planning to settle my second HELOC($106) with WF, which was taken when we purchased the home in 2006 in California. I think it is a purchase non-recourse loan(I dont know how to confirm this). I am current on my payment so far till last month and my next one is coming this 1st.

My first is with Citi - $570

The higher end of appraisal would be around $610-$620, so there is essentially $40-50k worth of equity.

Would WF work with me on a settlement.

Thanks..


No one can say with certainty, but that's not the ideal situation, if you are looking for a settlement on your HELOC. Generally, you'd want that balance to be underwater as well, for the most optimal settlement.

I think you can probably drag it out long enough to force some sort of settlement with them, but just beware of the potential consequences. They could elect to just foreclose on your house. So if you go down that path, be prepared as that is a possibility.

In my experience, it wasn't as easy as just not paying for a while and then settling at the end. It's a gamble and the banks don't necessarily react rationally, it hurts your credit, and there's a lot of difficult phone calls and letters the whole time.


Submitted by ball_mich on Mon, 04/12/2010 - 15:44

ball_mich

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Hello,

Here's my situation:
I have 1st and 2nd with Wells Fargo. My first was just re-modified under HAMP with a balance of $334k. The 2nd has a balance of $82k and the house is currently worth about $292k.

Wells Fargo Home Equity Solutions assigned a loan adjuster to my 2nd and put me on a reduced payment plan of $232mo. I have been making the payment since Sept. of 2009, but just got a letter last month stating that i have been approved for a mod thru W.F. but I have to make 3 payments of $394mo. to get approved. I immediately called the loan adjuster and told her the new payment is too much for me to afford but she told me they would eliminate me from the mod program and everything that is late and past due would need to be paid if i didn't make these payments. Fearing this I borrowed sum money from a family member to make the first payment but cannot do this every month.

Since the house is upsidedown I want to try to settle with them but don't know how to approach it. I can't see why they wouldn't want to settle since they are the junior lien and they would get nothing in case of a short sale or foreclosure. After reading your thread though I see that its a bit more complicated than it seems. Any advise would be helpful.


Submitted by on Mon, 04/19/2010 - 18:03

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Hi ball_mich, this is an awesome thread with lots of useful info. Maybe you can give me your two cents (i need them).
I have 1st:150+k, 2nd: 60k (heloc), both with WF, in a recourse state (sunshine state). I'm about 90 days late on HELOC. Primary lender is about to abandon short sale process (waiting for lien release from HELOC). In my case I want to leave the home and move out regardless. My lawyer says if I settle for anything above $10K is not worth it. WF refused my offer to settle for $5K. They want 20% cash now (to release lien) + unsecured loan for entire balance. I said no way, I want to settle. They said 50%. I left it at that for now. The whole time I was telling them my financial odyssey of the last 5 years they were sort of chuckling (althought they did listen). Their attitude is that they don't care and they're convinced that you're trying to milk the system.
So, should I let it go into foreclosure, keep it going (I might have to restart short sale with primary), or continue trying to settle? If I can get 17% I think that would be optimum but from the sounds of it they are very adamant in their 50%. Thanks


Submitted by on Mon, 04/19/2010 - 20:28

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[COLOR=black]Hi ball_mich, [/COLOR]
[COLOR=black] [/COLOR]
[COLOR=black]I have been reading your posts and am very impressed in the way you handled your situation with WF. I am a resident of CA and have a home that would appraise for $425,000 at most. I owe on my first with Citi $408,000 after they modified my loan. I have a HELOC with WF for about $97,000 and they are trying to do a modification for me. I have initially given them my documents like paychecks, tax returns, they even asked me how much I have in my 401K and I just said $20,000 but did not give them any documents of my 401K. They did reject my modification package at first saying that my income was too low and now they are saying that their bank has signed up for the government plan and most probably they can modify my loan. They put me on a low monthly plan and got authorization for paying them for the next three months from my checking account. [/COLOR]
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[COLOR=black]I simply did not know that it would be possible for me to settle with them. But I am thinking even if they foreclose my house they have to pay the first loan to Citi first and then they get any leftover money. [/COLOR]
[COLOR=black] [/COLOR]
[COLOR=black]Now I am trying to settle with them. My situation is different than yours because they already have my financial documents, which is not showing much money. [/COLOR]
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[COLOR=black]So I am thinking to contact the settlement department before they send me offer for the modification and also call the person who is working on my modification and say that it is not possible for me to pay these monthly payments (which is the truth).[/COLOR]
[COLOR=black] [/COLOR]
[COLOR=black]What do you think is the best way to deal with them? Do you think I would have any luck with them? [/COLOR]
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[COLOR=black]I can pay an attorney to do this for me but I kind of don't trust the attorneys. At the same time they do all the talking with the bank and know what to say. Obviously, I have done everything that I should not have done like giving them my information. Look forward to hearing from you.[/COLOR]


Submitted by Rose_ on Mon, 04/19/2010 - 21:55

Rose_

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I too work in the industry. I work for a company that helps homeowners with a variety of negotiations. The thing is that we do the forensics before we ever talk to the banks. It changes things dramatically. You see, it really is a fact that most of the loans over the past decade are loaded with federal violations that the lenders do have to handle.

If you show the lender what he is guilty of, you can open a lot of doors. What I find really funny is that the lenders will actually try to tell people forensics will do them no good, but recently I was reviewing a loan mod from one of the big banks, and lo and behold, they've got language in the final section that discusses how the homeowner agrees that the original loan docs are valid and basically the borrower has to agree that he won't take any future action against the lender - and remember he can't get his mod unless he signs it! Point being - Forensics really do work if lenders are feeling the need to insert language to protect themselves from the forensics in their modification offers! As a note, that person found our company and requested we review before they signed what the bank has offered.

So whenever you are trying to get the upper hand, make the forensics your first step. I hate it when I see homeowners miss payments and risk their homes going into foreclosure to try and gain leverage over the banks. There is no leverage in that. The bank just takes the home. They don't care, go read some of the various news reports, they make money off those foreclosures big time, so it only hurts the homeowner.

He, the homeowner, needs a solution that does not have him at fault. Getting TRUE forensics done on the original loan is his ammunition. Also - if you are considering doing forensics - stay away from the pass/fail software programs out there - those are scams. Get a REAL forensic examiner, or company. And another word of caution, and I know this from experience. There are a lot of attorneys who claim to know forensics. They don't. How do I know? Our company has a lot of attorneys as clients, and we have done numerous forensic audits for people who already paid an attorney - who found nothing - yet when our examiners did them, we would find on the average up to 39 violations in the loan. So be careful who you choose.

But once they are all done, you will have so many more options than you had before, and banks do listen - just remember - getting them to the banks and getting the banks to pay attention is also a fine art. Don't give up the good fight for your home folks. Just know how to fight and win.


Submitted by on Thu, 04/22/2010 - 19:00

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Quote:

Originally Posted by Anonymous
Hi ball_mich, this is an awesome thread with lots of useful info. Maybe you can give me your two cents (i need them).
I have 1st:150+k, 2nd: 60k (heloc), both with WF, in a recourse state (sunshine state). I'm about 90 days late on HELOC. Primary lender is about to abandon short sale process (waiting for lien release from HELOC). In my case I want to leave the home and move out regardless. My lawyer says if I settle for anything above $10K is not worth it. WF refused my offer to settle for $5K. They want 20% cash now (to release lien) + unsecured loan for entire balance. I said no way, I want to settle. They said 50%. I left it at that for now. The whole time I was telling them my financial odyssey of the last 5 years they were sort of chuckling (althought they did listen). Their attitude is that they don't care and they're convinced that you're trying to milk the system.
So, should I let it go into foreclosure, keep it going (I might have to restart short sale with primary), or continue trying to settle? If I can get 17% I think that would be optimum but from the sounds of it they are very adamant in their 50%. Thanks


What state are you in? Florida? I have to say, that I'm really only familiar with California's laws and they do differ by state.

In my experience, at only 90 days past due, you aren't talking to anyone with authority that can really settle the balance for the rate you are looking for (17% based upon your figures). I didn't get to that point until after I charged off at 180 days, and even then it took some time dealing with the Recoveries group to work out my settlement. When you are talking to the people in the Loss Mitigation group (basically 90 days to 180 days), their priority is to find a way to get you current not recoup the most that they can in a settlement.

One thing that my buddy did, and again he was in California so check your state laws as they may differ, but we have the "one action rule". So he continued to pay his first mortgage current (or current enough that they wouldn't take foreclosure action) and didn't pay his second mortgage a dime. This forced the second mortgage to foreclose the property. By foreclosing the property, they couldn't then sue him for a deficiency judgement as they've already taken their one action (foreclosure). They can't both foreclose and sue. He did this on multiple properties, one property he said it took a year and a half before the 2nd would foreclose it. I'm not necessarily suggesting this, but it's one way to put some pressure on a second mortgage holder, but again check your state laws because it may not hold true for where you live.


Submitted by ball_mich on Fri, 05/07/2010 - 15:41

ball_mich

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Hi

Just to let you know that you had taken the right decision to settle your debts.Settlement can only help you to pay off your debts or provide you with different repayment plans so that it becomes easy to pay off the debts in an organised way and also according to your financial limitations. I will honestly feel good if you keep me posted regarding the progress!!!!!!!!!


Submitted by Rebecca Miller on Mon, 05/10/2010 - 17:23

Rebecca Miller

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ball_mich,

Were the 2 loans your buddy had were with the same bank. From what i have read so far the Second usually charges of the loan and only under rare circumstances do they foreclose. I have read where 1st and 2nd were with the same bank and the second one foreclosed.

Thanks,
ssanthan


Submitted by on Tue, 05/11/2010 - 13:11

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Ball_Mich, First off thank you very much for all your posts. They have been extremely helpful. I am to the point of charge off. I was working with a manager on a settlement for a $50k WF Heloc. Last week he said 10% would settle it. I called him back for the past week to say send me the paperwork and lets settle. After no luck of getting a hold of him I went to the operator and got a wonderful lady who tracked him down. The weasel would never get on the phone just spoke through her to say 10% was declined after he was the one that said it would work. The lady helping me took my info and said she would get to the bottom of this and see what they would take. She actually called back and said the manager said they will not settle for a dime under 20% and they are not open to negoiate on that at all. She then proceeded to tell me she would put that settlement offer in writing and send it out to me immediately.

My Heloc was not a purchase money loan and I wonder if I should just settle for the 20% to be done with it? Did they send a 1099 for the difference?

You are right, they would not budge on settling till after charge off. The first mention of settling was months agao and they never went lower then 65%. Thanks again for all your help.


Submitted by on Tue, 05/11/2010 - 18:26

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Quote:

Originally Posted by Anonymous
ball_mich,

Were the 2 loans your buddy had were with the same bank. From what i have read so far the Second usually charges of the loan and only under rare circumstances do they foreclose. I have read where 1st and 2nd were with the same bank and the second one foreclosed.

Thanks,
ssanthan


I understand that for these homes, the 2nd was a different lender than the 1st lien holder.


Submitted by ball_mich on Thu, 06/03/2010 - 10:46

ball_mich

( Posts: 360 | Credits: )


ssanthan-I am also behind on the first which is not with Wells Fargo, we are trying to save our home and hoping for a modification on the first. We are very pleased to have settled at 19.28% with Wells Fargo. That Frees up $50k in equity for the future.
It took til after charge off until they would even talk about a settlement lower than 65%. The number I would call to talk with Wells Fargo is (800)361-9985. I hope this helps. Good luck and keep us posted of your success.

Ball-Mich- Did you receive a 1099 after you settled? Thanks again for all your great posts.


Submitted by on Fri, 06/04/2010 - 15:14

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Trying to Settle in Cali

Congrats first and Thanks a lot for the information. I am 1 month behind on my 1st and working with citi to do the modification.

As i said earlier it has been 4 months since i have paid and i have not talked to them yet. WF online does not allow me to login and look at my account, dont know what that meands. I guess i have to wait 2 more months to go until charge off to start working with WF on a settlement i guess.

I will keep posted on my progress


Submitted by on Mon, 06/07/2010 - 15:35

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i have sent my settlement offer to wells 2 months back for my heloc, today i was told that it will be assigned to negotiator. i am not behind on my 2nd, but behind on my 1st.
was told to call after one week to get an update.i have 65k heloc,
my total loan amount 1st 567k and 2nd 65k. i took both these loans to purchase the home. not sure if 2nd is considered purchase loan. not sure wht laws applies to state of Virginia


Submitted by on Thu, 06/10/2010 - 12:17

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ssanthan- First off sorry it took so long for me to respond, I try to get on here at least every other day but I have been out of town. I seriously had no success settling until after charge off, so like you said you will have to prob wait another couple of months. They will try and settle with you for 65% and go from there. Just to give you a heads up, I was almost 12 months behind on the first and I told WF we were going to Foreclose it. Reason i did that even though I am trying for a Modification is if they think you are going to lose the home they know as being the second lien holder and its way up side down they will not get a dime from it. Not sure if that tactic was what made the settlement work or not. But just another tool for your bag to have against them.

They will eventually ask you to make an offer for settlement. I originally sent in my offer of $2k and they never even returned or countered on that offer because it was way to low. Thats when I got a jerk of a manager that said send in an offer of 10% and it would settle. Week went by and I could not get ahold of him and heard nothing. I finally got a very sweet lady that said the 10% was declined and she would love to work with me to find out what WF would settle for. Thats when believe it or not someone in the Banking industry actually called back and she said she got a managers approval to settle for 19.28%

I said you will not get a dime until i have it in writing. I made them fax it to me since it takes 10 days to get anything in the mail from them. After I received it and read the letter, I told them I would be able to pay in one week after I got the document. Reason being they want a day you will pay for them to call you and get check by phone.

In a nut shell the letter read- This letter confirms WF has agreed to settle above debt for 19.28% writing off the remaining $43,000. Upon payment WF will consider the obligation settled and report in to the Credit agencies as such. i was then told after 30 days I would receive a letter confirming the lien had been removed and the debt settled. I have not received that yet since it has only been about 2 weeks. I hope this helps you and let me know if you need anything else.

FullDebt- I am shocked they are willing to even talk settlement with you if you are not behind on the second. Is the home upside down or do they think you are going to foreclose the 1st? Keep us posted of your success.

Has anyone out there had any success with a modification from First Horizon. That is who my first is with and we are on month 12 of waiting for an answer on the Modification. Thanks.


Submitted by on Tue, 06/15/2010 - 01:11

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Trying to Settle in Cali

I think you had the leverage of the first being behind by 12 months. My situation is i am currently 1 month behind on my 1st, but i am trying modification. So i don't think even after charge off i wont have the leverage you had showing them that the house might foreclose. The only leverage is i wouldnt have paid the 2nd for 6 months.

Also do u know how the 180 days is calculated.

I stopped paying on Feb 28th. When i looked at credit report today, i saw that they have reported 90 day late as of june. I would think it is 120 days. They also seem to have looked at my credit report today(Not sure what they are looking for).


Submitted by on Thu, 06/17/2010 - 07:24

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ssanthan- I posted a reply a few days ago and for whatever reason it never posted. Sorry about the delay of getting back to you. Yeah it took until after charge off until they even really wanted to talk about a reasonable settlement.

WF says the lien will be removed and the letter states in a nut shell- This letter confirms WF has agreed to a settlement of 19.28% and will forgive the remaining $43,000 balance. Upon receipt of payment WF will notify credit agencies that the debt is settled. It also states I will receive a 1099 for forgiven debt.

Not sure if this will help you but when I was trying to settle I told WF we were planning on walking away from our first and foreclosing even though we are still hoping for a Modification. Reason I did that is I figured they would realize if I Foreclose they get $0 being the sale would not even cover the first. Not sure if that helped at all, but its just more tools to put in your belt.

Fulldebt- I have never heard of them settling if you are not behind. But best of luck and keep us all posted. They may go ahead and want to settle realizing also if you lose the first they will not get a dime.

Has anyone had any luck getting a Modification from First Horizon?? That is who my first is with and I am 12 months in the process of the modification. Thanks..


Submitted by on Thu, 06/17/2010 - 07:39

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Ssanthan- I think even the 6 months behind will give you leverage. Just tell them you are planning on Foreclosing. Never hurts to try. Yeah the credit reports make no sense what so ever. They are usually a month behind to my knowledge.

Also they may be looking to see if you are behind anywhere else, especially with the First. If your home foreclosed they know the first gets priority and the second usually gets $0


Submitted by on Thu, 06/17/2010 - 07:45

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