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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?




I met with my CPA and he said he has other clients that have settled Heloc's for 10-20% lump sum payments.

I plan to approach Wells Heloc and see where they stand on settlement and if they balk then I will most likely quit making the payment to show distress.

I will keep you posted as I get more info.

Sub: #21 posted on Tue, 04/14/2009 - 14:25

mtsims mtsims

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UPDATE: I received a v-mail from my settlement negotiator from WF Home Equity. She stated that the lowest they can go is 20%. I can't settle for that much and it wasn't exactly an offer but more of a statement, however it gives me hope that I can get it settled.

I am likely to have to fight them over a deficiency judgement, if the home actually forecloses. It was not a purchase money loan, and they will likely be considered a "sold out junior" in a foreclosure by the first mortgage holder. So hopefully they will eventually be more reasonable.

Sub: #22 posted on Thu, 04/23/2009 - 09:39

ball_mich ball_mich

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80% of the balance or 20% of the balance? I'm in the same boat...

Sub: #23 posted on Fri, 05/01/2009 - 08:31

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Again, it wasn't exactly an offer, but more of a comment of that the lowest they go would be 20% of the balance. For example a $20k debt, the settlement would be $4k.

I am going for lower than 20% on the basis that they won't get anythign from a foreclosure sale (the first won't get out in full), and they can't seek a deficiency judgement under the California Code of Civil Procedure. But their ability to seek deficiency judgement is an area that is gray, so I'm sure they think they will get it. So we will see.

Sub: #24 posted on Fri, 05/01/2009 - 08:45

ball_mich ball_mich

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Update: Well, not so much of an update. I'm still working on settling my HELOC. I'm at 160 days right now, and have about 30 days before the home gets listed for sale under deed of trust by the first mortgage holder. If a settlements going to happen, it's probably going to happen in the next 20-30 days.

Sub: #25 posted on Thu, 05/14/2009 - 15:15

ball_mich ball_mich

(Posts: 360 | Credits: )

This is an interesting thread!

I'm in Calif. with a GMAC $508,000 1st and a Wells Fargo HELOC at $120,000 on a house that might sell for $475,000 today.

I'm up to date on both loans. I want to remain here. I have some cash set aside.

So... I stop paying the Wells Fargo HELOC but continue paying the 1st and HOA?

My goal? settle for $15K to $30K with Wells Fargo.

Sub: #26 posted on Sun, 05/17/2009 - 12:04

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As I said in my response to your private message, there's a lot of pitfalls in just trying to settle your HELOC when you can afford to pay it.

Know your state's deficiency laws. In California, look at CCP 580b and 580d. In some cases, mortgage lenders can sue you for a deficiency judgement, if the proceeds from a foreclosure do not cover the loan balance.

Be prepared to explain to Wells Fargo why you can't afford to pay them, when you are paying your first mortgage and your other creditors (if you have any). They will pull your credit report and see that no one else is delinquent.

Also know, that once you go delinquent on a mortgage loan, it may take you out of the possibility of doing a government program, like HARP... which many homeowners are now using to lower their payments.

There's just a lot to think about here, so tread lightly if this isn't a last resort for you.

Sub: #27 posted on Mon, 05/18/2009 - 08:51

ball_mich ball_mich

(Posts: 360 | Credits: )

I am also trying to settle my 80K for about 10%. I am 60 days behind and I have made it clear to them I wont pay unless they want to settle. If they dont, I will ultimately let the house go....mine was a purchase money loan.

Someone in this forum has posted updated messages on dealing with WF HELOC. He said something should work out in about 30 days. I would be very curious to know if he was successful in getting rid of the HELOC for less than 20%. If you read this message, please do update on what happend.

thanks,

Sub: #28 posted on Sun, 06/14/2009 - 12:24

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Quote:
Someone in this forum has posted updated messages on dealing with WF HELOC. He said something should work out in about 30 days. I would be very curious to know if he was successful in getting rid of the HELOC for less than 20%. If you read this message, please do update on what happend.


And update I shall...

Basically, it hasn't gone according to plan and has been really tough to work out. If you are in California and your HELOC was a purchase money loan, it is non-recourse, so you will probably have an easier go than I do. Mine was not purchase money and is a recourse loan, and they continue to make clear that they have other options after foreclosure happens (i.e. sue for deficiency judgement).

As far as my situation, it's getting strung out a bit. Apparently there was some moratorium passed which bought me about 90 extra days before foreclosure... so now it should happen sometime in October, according to Wells Fargo's lawyer (who I talk to directly -- better source of information that Wells to be honest). Originally it was supposed to go to foreclosure sale in early July.

So, even though my HELOC charged off about 7-10 days ago, the HELOC lender can't do much until it forecloses in October. Only then can they seek the deficiency judgement, or that is my understanding. So the process goes on.

At this stage I'm dealing with the "Recoveries" department. They are offering a 30% settlement, but also saying they need income verification, copies of bank accounts, etc. And I'm telling them I'm not providing it and can only afford something around 20%. We'll see how it goes.

After dealing with them for quite some time, I think a settlement for less than 20% probably just isn't going to happen for me. But if you have more leverage, like in your case with the purchase money loan, you might get lower. I actually do think I'm protected from deficiency judgement here given a 1992 California Court of Appeal ruling for George V. Simon vs Bank of America, but it's not as clear cut as saying it was a purchase money loan.

Anyway, I'll post updates when they occur.

Sub: #29 posted on Wed, 07/01/2009 - 16:54

ball_mich ball_mich

(Posts: 360 | Credits: )

Loan modification is helpful for you like me before my home was into foreclosure when lawyer advised me to have loan modification I took it and its very helpful. Thank you Marc Tow for the help.

Sub: #30 posted on Thu, 07/02/2009 - 07:02

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