Settlement Of Mortgages

Ten Ho-
You will receive a 1099 of the forgiven debt. Then you can talk to your tax guys on your options. I was told if you can show you used the Heloc money towards home improvements that the 1099 can be wrote off. I will find out for sure in a few months.

ssanthan- It took about 4-6 weeks to receive the lien removal. Congrats on the settlement, this forum was greatly helpful for a lot of us. Now if we can all get good modifications on the first mortgages we can all get back on track.

Also Congrats Dantheman on your settlement.

Also I saw someone else used my screen name saying they have not settled yet. Obviously that was not me. I settled at 19% as I told everyone awhille back.

kabbin- I never sent in any financials at all. So i would avoid that fully. It sounds like none of us how settled until after charge off. Once it comes to charge off they want to work with you quite a bit more due to if the home forecloses the first will not pay them anything.

I still am in the review process for a modification on the first with First Horizon and if there is any success there I will post any success.. Hopefully that is..

Trying to Settle in Cali

Thanks for the info. I will wait for 2 months to get my lien removal. yes the forum was of great help and i couldnt have done it without all the input. I all ready got my first modified. So from a home front i am set.

Now i am moving on to settlement of my credit cards. So far i have 3 cards totaling 30k worth of debt. i am close to 45 days late on couple of cards. Starting the journey on CC settlement.

I too finally got a settlement approved with WF Home Equity (not HELOC) for 25%. Also note that my situation may be a bit different than others in the sense that I've been current and have never ever defaulted on any payments (mortgage/credit cards etc) in my life and have an excellent credit (just don't want to mislead anyone on this forum). I took this settlement approach since I just couldn't sustain making payments going forward in the upcoming months as I recently got married and expenses easily outdoing my income. Anyhow, there are repercussions with settlement as it has a hit on the credit, and having to pay taxes on the forgiven debt which is something I'm willingly taking on. The whole settlement process in my case seemed much straight forward than most of the negotiations. Below are my time lines.... 1. Filed for a loan modification for my Home Equity Loan, in the beginning of September, 2010. 2. Told to provide financial statements which I did (everything except my IRA/401K statements). 3. Loan Modification application rejected at the end of September, 2010 based on the grounds that I have been current and they see that I should be able to keep making payments moving forward as well. 4. Checked with the rep (who informed me of the Load Mod rejection) as to what are my options if I wanted to settle. I was told I could still do that and would need to speak to the Loan Intervention Department @ WF (Tel. #: 866-970-7821). 5. Spoke to a rep and I was sent an email with all the information this department would need to start negotiations. Pretty much what the load mod dept requested which I did (everything except IRA/401K statements), along with a initial settlement offer (about 19.5% of the loan). 6. Received a call from a loan officer a week later and he mentioned that all the documents were received and just that he is going to take a few days before getting back to me if the offer is acceptable. He did mention, that 19.5% was not enough generally and WF expects atleast 30-40%. 7. A week later he called me back and said the offer was indeed not acceptable and that I need to raise my offer. He also tried to talk to me into saying that I should maybe not pursue this as I have been current on my payments and I can manage it and all that blah blah. 8. The next day, I upped the offer to 20.5% and faxed the letter. 9. A week later, the officer called and mentioned just going up 1% is not going to work and we would just be going back and forth. I told him that's already a stretch to pay but he said likely it'll be rejected but will get back to me. 10. As expected, he got back a week later and said the 2nd offer was not accepted. I kept the chat to a minimal before he could talk to me about not to pursue this and all that. 10. I decided to up the offer a bit higher, thought it hopefully would work since I was upping my offer by another 5%, so basically faxed another letter with a new offer for 25%. 12. This time the officer called and said he got the letter and he would get back in a week or so. 13. Sure enough, he did call me and said that WF finally has agreed to settle on my 25% offer. He said they would send a letter stating all these facts which should come to me by next week or so but I should still be able to get about 30-45 days to make the payment. Once the payment is posted, he said my account will be closed (they supposedly don't send a letter stating that which was strange, but I could call this officer and confirm with him verbally that its closed). After its closed, the lien handling department could take up to 90 days before the lien is released which is basically sent to the county assessor's office and I should receive a copy from the county. Meanwhile the loan intervention department would mail me the 1099 within the next 30 days. 14. I did receive a letter from WF stating the my account is closed and the loan is paid/settled just yesterday. Note: 1. I was very surprised with the speed at which I was able to reach a settlement as it literally took exactly a month from the day I sent them my initial request and a verbal offer of settlement was approved on phone by the officer. 2. Please be diligent with your case as every case varies and the outcomes will be very different! Thanks to this thread and the folks on this thread, it very much helped plan my negotiations.

You should try to modify your mortgage before you apply for a settlement. Most lenders will prefer a loan modification compared to a settlement. In my opinion, you should contact the loss mitigation department of your lender and apply for a loan modification. If you can prove your financial hardship, then you will get a loan modification. You will get an affordable repayment plan to pay off the dues but your loan term will get increased. In case, the lender does not agree to a loan modification, then you can apply for a settlement.

If Anyone can please answer this it would be greatly appreciated. I just called the Wells Fargo settlement department and they ask for your Bank statements and 401k is that a must? Do i need to provide that?
anyone who know's from experience it would be greatly appreicated.
thankspj

Please hang in there, someone will be along with advice as soon as they are available.

I guess Wells Fargo wants to check out whether or not you're actually facing a financial hardship. The bank will offer you the option of settlement only if it is convinced that you're in severe financial crisis and won't be able to make payments as per your payment plan. In that case, you'll have to give them your bank statements and 401k details.

Hi Anna I thank you for your opinion but i am not looking for guesses, i would rather hear facts. So information from someone who actually went through the process would be preferred. But again thanks for your thoughts.