Specialized Loan Serv mortgage in Baltimore for $29K - I'm 2 years past due

DoneWithBmore

LoanSafe Member
Jan 5, 2014
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This house was supposed to be a rehab and sell. Never found the time and it would cost too much to rehab to make it worth it anyway. I was young and dumb when I bought this almost 10 years ago for $22k. The current balance is $29K after I decided to stop making payments 2-3 years ago. I thought they would foreclose on it, but they just keep buying HO insurance and added it to the principal. It shows up on my credit report as past due over 24 months.

Anyway, I want this thing gone and I'm trying to figure out my options. I was thinking of hiring a lawyer to try to negotiate down the payoff balance to 10%, but not sure if that's realistic. Anyone have experience with loans this small, and with SLS?

Thanks!
 
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Evan Bedard

Call 1-800-779-4547
Loan Safe Mortgage
Aug 26, 2007
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San Diego, California
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Welcome and thanks for joining the LoanSafe community.

This is not an uncommon situation, especially in a recourse state and having a fixer-upper that needs a lot of work before the bank can resell the property. They are in no rush to foreclose on the property and you may want to consider applying for a short sale or deed in lieu to get the property off your hands. Or if you would like to pursue a settlement, I recommend you first give it a shot on our own to see if SLS would be open to settling the account, although this is generally not an option on a first lien. Here's a good thread to help you weigh your options:

http://www.loansafe.org/forum/short-sale-outpost/43265-ss-vs-dil-vs-fc-comparison-5.html
 

DoneWithBmore

LoanSafe Member
Jan 5, 2014
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Hi Evan! Thanks for the info from over two years ago. Crazy, but this is still going on! The loan I think was charged off by SLS, and now Veripro has it.

They just sent me a letter stating "We are currently willing to accept a single payment of $9006.46 as settlement on the above balance owed of $30,021.52 with no future liability. This off is good until end of business 04/30/2016, and thereafter settlement is subject to change. Once funds are received, Veripro Solutions, Inc. will execute or cause to execute the release of the lien shortly on the subject property, as well as the recording of said document."

Just to recap, I purchased this property with a $22k loan, stopped paying about 5 years ago, loan balance is up to $30k. 2015 Tax assessment on house is $3K. It's a boarded up shell in a run down neighborhood.

Any ideas here? Should I counteroffer for less? How does this appear on my credit report? Lastly, can they just take my money and say I still owe (or SLS come back and want money). I don't trust any of these companies.

Thanks again,
J
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
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Oh boy! Well....congratulations (kind of?)

There's a few questions I would personally ask:
Are you planning on buying any more real estate in the near future?
Did you originally file bankruptcy and include this property?

To answer your questions:
Should you counter for less - If you're asking me, I would.
How would this appear on your credit report - Depends on if you filed bankruptcy or not. If you did not file BK it is reporting right now possibly as either closed with a balance still owed or actively showing delinquent.

Once you settle the lien it will depend on what you negotiate when you settle it. You can negotiate that if you pay them X amount that they have to show the lien as being paid as agreed and not settled for less than owed. If you get it paid as agreed you can purchase a new home through a traditional method once you have 12 months past (or current on mortgage payments). Reporting as settled for less, or settled will be looked at as a short sale and those seasoning periods would apply.

By no means am I an expert at settling liens or loan mods. I am non-qualified (non-QM) mortgage expert (of course I do normal loans as well). I can however help you understand what you need to do for the plans for the future.
 

DoneWithBmore

LoanSafe Member
Jan 5, 2014
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Hi Erik, Thanks for the feedback. I have not filed bankruptcy. I own my current residence and qualify with a local lender for financing to buy additional properties. My credit tanked when I stopped making payments on this mortgage, but has since gone back up to the 720 range. I do understand that my pre-qualification from local lender will be voided with short sale.

So, it sounds like I have to negotiate for them to show it was paid as agreed. Should these counter-offers and negotiations come from me to them in writing? I feel like, even with an accepted offer from them in writing that it will be reported as paid as agreed, they can basically report it however they want to the credit bureaus without recourse from me.

Thanks again,
John