Refinance With Countrywide Heloc On The Deed

despritfreya

LoanSafe Member
Sep 8, 2011
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The best answer I've heard yet is that if a lien is affecting title, that's going to be what causes an issue.
Erik,

The "best answer" is the answer.

Unless OP finds a lender willing to take a junior position, or, the valid consensual mortgage lien is released, OP is not going to get the financing she seeks. OP needs to pay off that second in the process of refinancing just like most folks do. She has sufficient equity to accomplish this. Unless she is willing to go down the ill-advised and rarely (if ever) successful "show me the note" arguments in court she needs to face the reality that she owes a second mortgage.

While I am curious to see if some other approach actually works, I truly doubt it. Pay the amount due or try to buy the lien release for something less. The second approach is probably a non-starter as OP waited way too long to face the 2nd. With the equity OP states there is, the 2nd has no incentive to negotiate.

Des.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
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I have someone that I may believe be a good resource for you, if you'd like - shoot me an e-mail and I can put you guys in touch. [email protected] - and then once you have 12 months pay history on time we can potentially refinance you out of the hard money.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,059
162
63
San Diego, California
www.loansreduced.com
Erik,

The "best answer" is the answer.

Unless OP finds a lender willing to take a junior position, or, the valid consensual mortgage lien is released, OP is not going to get the financing she seeks. OP needs to pay off that second in the process of refinancing just like most folks do. She has sufficient equity to accomplish this. Unless she is willing to go down the ill-advised and rarely (if ever) successful "show me the note" arguments in court she needs to face the reality that she owes a second mortgage.

While I am curious to see if some other approach actually works, I truly doubt it. Pay the amount due or try to buy the lien release for something less. The second approach is probably a non-starter as OP waited way too long to face the 2nd. With the equity OP states there is, the 2nd has no incentive to negotiate.

Des.
I'm working on a few cases right now in this scenario and will keep you updated on how they progress.
 

lorkees

LoanSafe Member
Dec 26, 2009
16
0
1
I'd appreciate that. Would be nice to find out that there is a better answer for the thousands who will be facing this issue.

Best regards.

Des.
Des, I know it's been a long time and not to make excuses, but....I have not received a phone call, a statement, nothing!!!! West Coast Servicing is most definitely making a lot of money, google them and check out all the BK cases all across the country. They added 40K to the original loan amount of 53K. Would this be happening if I had received any kind of statement from whoever held the note 1,2,3,4,5,6 years ago?? I don't think so. I could have made contact to try and resolve this much sooner and saved myself a ton (I can't even emphasize that enough - a ton) of stress! But they didn't seem interested enough to send statements when not only the second but the first was well under water. I didn't have a clue who had it let a lone how to contact them.
 

despritfreya

LoanSafe Member
Sep 8, 2011
369
53
28
Lorkees,

I understand your frustrations and I wish I had the answers. The entire scenario just sucks.

As it relates to the $40k over the loan amount, how much of that is accrued but unpaid interest? What about advances for taxes and insurance (if not covered by the 1st or paid by you directly)? What was your principal balance when you stopped paying? What was the interest rate? Was the interest rate adjustable? If adjustable, what was it based upon (prime, libor or some other index) and how many points over that index as well how many times per year would it adjust?

There are many factors that will go into the additional amount owed and, yes, much may be fluff and BS, but much may also be legitimate. Without knowing what the contract provides for and the amount that was owed when you stopped paying, one cannot even guess as to the true amount owed today without the BS.

I am hopeful Erik will has some answers for you.

Des.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,059
162
63
San Diego, California
www.loansreduced.com
Update on a situation with a mortgage charge off: We have received the information from title and oddly enough the 2nd lien that was charged off is now in first position. Not exactly sure how that happened but we are now seeking to remove the lien with a lien release as it is still affecting title or a possible subordination to our lien.

Ultimately when you're purchasing a new home, obviously this wouldn't come up but when trying to refinance with a 2nd lien affecting title it requires additional measures to get it off. Once I get more information from title I will keep everyone in the loop with how this is progressing.
 

OneHugeMess

LoanSafe Member
May 30, 2016
477
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28
As I learned tonight, there is another way around this. Completely YMMV.

But... Certain banks will allow a refinance through a HELOC, paying off the first mortgage, and rolling it into the new home equity account, and allowing the current 2nd lien to go to first. They do not require subordination, or a pay off as long as the account is not reflected as "active" on the consumers credit report.

You do have to have major equity in order to complete this. At least 25%, and I'd say your potentially putting yourself at much greater risk of foreclosure, by moving a 2nd Lien into First Position. But... it could be adventurous for someone stuck with a High Interest First Lien - and unable to secure a modification, but delinquent on a 2nd that has charged off.

The other major downside, is by moving your loan into a HELOC, you are exposing yourself to rising interest rates, and your loan may adjust every single month based on Prime Rate & a Margin. Although, some lenders also offer - fixed rate periods, for a certain amount of time, and based off the balance owed.

It's something worth looking into possibly. It's still risky, depending on your states Statue of Limitations... and your scenario regarding your first lien, but it is a possibility.

Bank of America & Citi-Bank will not do this. They will require a account statement or letter from the lien holder. But... I know Wells Fargo will fund it.

Your best action plan is to try for a modification on your first lien before pursuing this. It leaves you much better protected.
 
M

Melanie H.

Guest
Update on a situation with a mortgage charge off: We have received the information from title and oddly enough the 2nd lien that was charged off is now in first position. Not exactly sure how that happened but we are now seeking to remove the lien with a lien release as it is still affecting title or a possible subordination to our lien.

Ultimately when you're purchasing a new home, obviously this wouldn't come up but when trying to refinance with a 2nd lien affecting title it requires additional measures to get it off. Once I get more information from title I will keep everyone in the loop with how this is progressing.
I am in a similar position. I actually thought our home modification encompassed both loans. At least that is what BofA swore to us on the phone when we were going through the process. I just found out through trying to refinance that the second mortgage still has a Title Deed according to county records. We knew nothing about this. Here is the dilemma : BofA bought our Country Wide loans. During the process of a home modification they sold the second to Carrington Mortgage in 2010. We are way past FICO reporting on the 7 years. The strange thing is, county records still shows Country Wide as the holder of the Title Deed. There is no recording of the second being sold to Carrington Mortage. I am prepared to do a "cash settlement" and ask for a "paid in full" with them but who would remove the lien if I did since their name does not show on county records? Also, if it is past the 7 years I assume it would not be able to be reported on the credit bureaus. Does this still set in motion the unable to refinance for 3-4 years? I've been following your response diligently and haven't found anymore on the subject on what you found out.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,059
162
63
San Diego, California
www.loansreduced.com
Hi Melanie,
If you satisfy a charged off lien through a settlement it should not prevent you in the future for obtaining a refinance. We have done many transactions here with a refi where we pay off the 2nd lien holder at an agreed upon amount that isn't the full balance.

You are correct in regards to the item reporting on credit, it shouldn't report on credit if it is older than 7 years but of course the lien will still remain on title. If you do a cash settlement they should give you a lien release which they will also record with title that will clear the lien.

Hope this helps, if you have any more questions I'm always available for a quick chat or e-mail: 619-379-8999 and [email protected]