Old 2nd Mortgages - that have come back to HAUNT homeowners

Luca Bayon

LoanSafe Guide
Hi Team,

My name is Lucas McGrew Bayón & I work under Erik Sandstrom - the longtime contributor of this forum. We are doing our best to help homeowners across the nation that are dealing with these crooked 2nd Mortgages that have come back to haunt people. So let's dive right into it.

A Summarized History: Back in 2004-2007 millions of Americans became proud homeowners. Some of them acquired 2nd Mortgages in order to purchase their homes, while others got their 2nd Mortgages in the form of a HELOC (home equity line of credit) at a later time. Fast forward to 2008 - the housing market crashed. Many homeowners struggled to make their mortgage payments and their 1st Mortgage company created a loan modification to make things more affordable.

The 2nd Mortgage company said they were planning on doing a loan modification under a program created by the US Treasury called the 2MP or the Second Mortgage Modification Program. Many of these 2nd Mortgage companies did not get around to creating this modification plan. In fact, after 120 days of not receiving payments these 2nd Mortgages were deemed as being "Charged Off" which is a fancy way of saying that they were deemed as uncollectible by these entities.

We can only speculate to what happened next. Maybe these 2nd Mortgage companies were paid off by the TARP funds or the debt was written off in their taxes. Maybe these 2nd Mortgages were purchased for pennies on the dollar by investors. Either way - something malicious occurred.

The homeowners that survived the recession now face a new threat. These old 2nd Mortgages that they haven't dealt with, in many cases over a decade, are now coming back to haunt them. They see that the homeowners have equity and they want "their" money.

2nd Mortgages Options: It is important to note that you will be working with the 2nd Mortgages servicer. A literal debt collecting agency who is working on the behalf of the investor. So what options do these 2nd Mortgage companies give you? These companies tend to give you 3 options. We can get into the intricacies of each at a later time but let’s go over the basics for now:
  • Settlement
  • Loan Modification
  • Foreclosure
Settlement: An amount of money the 2nd Mortgage states that you owe them. This is usually 2-3x the original loan size. Why is this the case? They tack on interest and all kinds of fees. If you are trying to settle with them be aware that if you have less than 80% Loan-To-Value the most they will be willing to budge is 1% of the 2nd Mortgage. In the rare instance that you have more than 80% Loan-To-Value, you will have a better chance disputing the new balance of the 2nd Mortgage and lowering it to 80%.
  • The problem: Most people do not have the money to pay these new loan balances off all at once
Loan Modification: This is a modification that the 2nd Mortgage servicer will offer you. It’s usually a lump sum paid up front and then a percentage paid for 6 months after that. In most cases, they will “re-evaluate” the scenario after that the 6 months elapses.
  • The problem: This tends to be a short term solution and usually barely puts a dent in the loan balance. Also, there have been cases where these loan mods affect people’s credit because the company reports the old “missed” payments to the credit bureaus.
Foreclosure: Everyone should know what this is. It’s worst case scenario and you might be thinking that it cannot happen to you. Unfortunately, it has happened to hundreds/thousands of Americans who are dealing with these Old Charged Off Second Mortgages. This is what we are trying to prevent.
  • In non-judicial states, the second lien holder can foreclose without going to court!
Our Solution: Erik Sandstrom & I are trying our best to proactively reach out to people who are dealing with these Charged Off 2nd’s. Erik has been in the lending industry for 16 years and has been dealing with these for over 6 years. I have been working under him for 7 months and he has taught me how to fight these alongside him. We work for a nationwide lender and national bank. This has given us the ability to help with people across the US.
  • Refinance - Most lenders won’t even touch these 2nd Mortgages because they are seen as “defaulted”. We have found a way to navigate through the guidelines of conventional loan programs and we can actually get these through the pipeline and to the finishline. There are no upfront costs. If for whatever reason we can’t do the loan, we will let you know before you spend any money. We are on your team.
As far as your specific scenario goes, this forum is equipped with some of the most knowledgable homeowners in regards to these Old 2nd Mortgages. I will add some helpful links in the thread below- Most of which the homeowners I mentioned above have provided in previous threads. Please DO NOT hesitate to give us a call or use this forum as a resource.
 

Luca Bayon

LoanSafe Guide
I have received several Direct Messages in regards to this thread. Please note that my contact information is in my signature box but I'll place it here as well: (530) 574-5171 - this is my cellphone so please don't hesitate to text me as well.
 

Luca Bayon

LoanSafe Guide
The two most common loan servicer's we see when helping homeowners refinance these charged off 2nd mortgages are:

1) Real Time Resolutions, Inc. (RTR)

2) Specialized Loan Servicing, LLC (SLS)

There are many other servicer's doing this so if the scenario I posted above resonates with you - contact me right away.
 

Luca Bayon

LoanSafe Guide
We have noticed that Real Time Resolutions and other services are starting to escalate things. The reason is probably because of the volatile housing market. Since rates are up and potential homeowners wait for the dust to settle, housing is starting to depreciate in value. This means that these 2nd Lien servicers will ultimately become more desperate to attain "their" money. We have seen more NODs and Pre-Foreclosure activity in the last week or so than we have in months.

Ideally you would contact us long before they escalate on your property. We can still work things out when you have a NOD, NOS or are in pre-foreclosure but it does complicate the scenario. Please get a hold of me the second you realize that this second lien is problematic.
 

OneHugeMess

LoanSafe Member
I just wanted to say, I know two people who recently had Chase release their Second Mortgages. One was a purchase money HELOC, which was never drawn down and only used to finance the house. Another had taken out a Fixed Rate, Home Equity Loan from Chase Bank (directly) to remodel their home, and stopped paying in 2010.

One was written in 2006, another in 2007. The one who had the Purchase Money HELOC, received countless settlement offers, including for 6% of the loan balance. Since the loan was completely underwater until recently, they ignored it. The other person, has had equity in their home since 2014/2015, and assumed they would eventually foreclose, but had not been called or mailed anything in years.

I've also seen other posts, on this board with other people receiving unsolicited Satisfaction of Mortgages from Chase.

Lastly, I just wanted to chime in. It seems like a lot of people who received forgiveness in 2009-2012, had already had their home foreclosed on, and the 2nd Mortgage had been sold out, as a junior lien, and was uncollectible. The banks, for the most part, as you said... seem to have been waiting in the background, in hopes for these loans to become fruitful.
 

Luca Bayon

LoanSafe Guide
I just wanted to reiterate the fact that getting on a loan modification with RTR is typically NOT a long-term solution in dealing with them. Before you pay them a lump sum and get on a temporary plan make sure you are scratching away at your principal. I've only seen people pay off their interest and this is essentially just filling the pocket of the investor without benefiting you.
 

OneHugeMess

LoanSafe Member
I just wanted to reiterate the fact that getting on a loan modification with RTR is typically NOT a long-term solution in dealing with them. Before you pay them a lump sum and get on a temporary plan make sure you are scratching away at your principal. I've only seen people pay off their interest and this is essentially just filling the pocket of the investor without benefiting you.
What has RTR been offering, as solutions? Typically, a lot of their servicing is Bank of America & Countrywide Associated.
 

Luca Bayon

LoanSafe Guide
The most common thing we have seen is a 6 month loan mod before re-evaluating the borrowers scenario. Similarly, I talked to someone yesterday that paid RTR 20k up front and then was contracted to pay $1000 a month for 12 months. All the mod's I have seen thus far have not been long term solutions and the investors get to fill up their pockets a bit.
 

OneHugeMess

LoanSafe Member
Something tells me that the 6 Month Loan Mod, is to re-age the account and make it easier to bypass any SOL defenses. I also find it interesting, that they are not actually trying to offer a longer term solution.
 

antomax03

LoanSafe Member
I have a second mortgage with SLS..Stopped paying on that loan since 2010. They've always threatened to foreclose with the usual Intent to foreclose letters. Since the market has increased dramatically here (nj), there is equity they can run after so they sent another NOD and another letter saying the loan is deferred to foreclosure. I have tried to offer a settlement two years ago and they denied.
Actual 2nd loan was $79,000. Balance as of now is $178,000.
Any advise?
 

OneHugeMess

LoanSafe Member
I have a second mortgage with SLS..Stopped paying on that loan since 2010. They've always threatened to foreclose with the usual Intent to foreclose letters. Since the market has increased dramatically here (nj), there is equity they can run after so they sent another NOD and another letter saying the loan is deferred to foreclosure. I have tried to offer a settlement two years ago and they denied.
Actual 2nd loan was $79,000. Balance as of now is $178,000.
Any advise?
Who was the original lender? In NJ, it's not really "official" until you get a letter from a law firm.
 

OneHugeMess

LoanSafe Member
Also are they aware, or have you provided them, the details of your first mortgage (balance)... one of the difficult things, is, they do not always know your first mortgage's loan balance.

There are people (particularly in NJ, FL, and NY) that had original starting balances of lets say $400,000, and have built them up to $640,000, with past due interest, and escrow advances. They could do a foreclosure, but it would stand them no benefit if the first mortgage were completely underwater.
 

antomax03

LoanSafe Member
The lender is Wells fargo. The first mortgage balance is $248,000. The house market is up now so it puts them in good position to cover the first mortgage balance. Yes, I should get an official court notice if they foreclose. I'm just trying ti be proactive in dealing with the situation before it gets to that point based on their letters.
 
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