Settlement Of Mortgages

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?

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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.

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...?

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?

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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.

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,

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.

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.

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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.

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.

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.