Success in Settling 2nds-cont'd

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Can’tsleep

Guest
Was just reading this thread and decided to go to my county recorders website and see if anything was going on. I stopped paying my HELOC with Chase in 2011 after Chapter 7 BR. I tried to negotiate with them with the standard offers used successfully here but was only robo called for my trouble so I had to send them a cease and desist.
To my extreme surprise, today, I found that over a year ago, Chase released the lien on my house. There are no new liens. I did not receive any notice from them at all. So happy. Thanks for this forum and all who have responded and attempted to help. Best of luck to everyone. And check your records office. You might get a huge surprise like I did. :D
How do you check your records office? Or what am I looking for?
 
C

Chasegame2019

Guest
Every county is a little different but usually you'll need your home's parcel number (APN) and /or the address. If you have a property tax statement, all the info is on it. Some county recorders allow an online search, others require you to go to their offices in person. You're looking for the 'recorded liens', and in this case, 'release of lien', 'full reconveyance of lien', etc.
 
C

Chasegame2019

Guest
Since 're-visiting' this website after many years, I have been seeing numerous threads on attempts to settle seconds. (Because this website still hasn't been fixed, I have to comment here.). It seems like 'Tom Eason's Strategy for Settling 2nds' has gotten lost in the archives?. The reason I say that is I see posts here where there is a lot of communication and repeated settlement attempts by borrowers with the lenders. In my experience, this is a huge mistake. Maybe Tom's 'Strategy' can be refreshed somehow here? Thoughts? suggestions?
 

littlefishinapond

LoanSafe Member
May 16, 2016
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1
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We stopped paying our second in 2016. It was an interest only loan and had a balloon payment at the end of the 10 yrs. The lien is under BOA but it was charged off in 2017 and sold to a collection agency. Well, two collection agencies as we have received letters from two different ones. We have tried to settle but they want financials. Obviously we have declined and the conversations never go anywhere after that. The last conversation we had with one of them was to tell them not to contact us unless they want to settle and that if they are so interested in the house they can come and get it. We don't care about the house at all but paying the first is way cheaper than any decent rental in the area. We had to do some repairs in the last few years like the AC and water heater, other than that the house needs other cosmetic things fixed but we don't want to put any money on it unless it is a necessity.

We would like to settle for no more than 10-15% as we are still under water considering some of the things that need to be fixed ( the balance is 37k). I'm confused on how to proceed because there are two different collection agencies contacting us regarding this loan both claiming they have been engaged by BOA to collect on it. How do you think we should proceed? Contact BOA directly? Continue to wait? We would like to eventually move but the cheap payment (which the first is an adjustable interest rate too, ugh) is keeping us here.

Any advise would be greatly appreciate it!
 

Jzone

LoanSafe Member
Jun 20, 2017
149
15
18
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We stopped paying our second in 2016. It was an interest only loan and had a balloon payment at the end of the 10 yrs. The lien is under BOA but it was charged off in 2017 and sold to a collection agency. Well, two collection agencies as we have received letters from two different ones. We have tried to settle but they want financials. Obviously we have declined and the conversations never go anywhere after that. The last conversation we had with one of them was to tell them not to contact us unless they want to settle and that if they are so interested in the house they can come and get it. We don't care about the house at all but paying the first is way cheaper than any decent rental in the area. We had to do some repairs in the last few years like the AC and water heater, other than that the house needs other cosmetic things fixed but we don't want to put any money on it unless it is a necessity.

We would like to settle for no more than 10-15% as we are still under water considering some of the things that need to be fixed ( the balance is 37k). I'm confused on how to proceed because there are two different collection agencies contacting us regarding this loan both claiming they have been engaged by BOA to collect on it. How do you think we should proceed? Contact BOA directly? Continue to wait? We would like to eventually move but the cheap payment (which the first is an adjustable interest rate too, ugh) is keeping us here.

Any advise would be greatly appreciate it!
Stop paying is a lot differant than discharged in bankruptcy. Bankruptcy allows you to walk away and not be responsible for the debt. Simply not paying allows debt collectors to come after you for years to collect the debt. Having your debt "charged off" simply means its not on BOA's books but is still a collectable debt. Debts discharged in bankruptcy are not collectable, though a mortgage lien can be assigned to a debt collector (which is what happened to me)

Check with your county register of deeds to make sure BOA still holds the lien. If they do, deal directly with them as they are the only ones who can release it.

You really have two issues to take care of. Settle the debt and get the lien released. If you settle the debt with a debt collector, you may not get the lien released. If you get the lien released, you may still owe the debt.

If you can, try to work with BOA and get the debt settled and lien released through them.
 
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Chasegame2019

Guest
I agree with Jzone, although I'm pretty sure any settlement would have to be approved by BOA beforehand. Again, though, do the math yourself to see if you are even in a negotiating position.

Basically, lenders look at your current home value (see Zillow or Realtor.com), minus $30-50k in fix up costs they assume will be needed to 'make ready' for selling it, minus realtor commissions and closing costs they'll have to pay (6%+), minus your 1st TD. If this number is negative, you're in a good position to get a settlement. If this number is positive (your equity) they're more likely to wait you out.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
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San Diego, California
www.loansreduced.com
I'm so glad you've been able to post, nonetheless as a guest - Moe is working on the forum to hopefully fix the bugs right now with new members trying to join.
 

littlefishinapond

LoanSafe Member
May 16, 2016
6
1
3
37
I agree with Jzone, although I'm pretty sure any settlement would have to be approved by BOA beforehand. Again, though, do the math yourself to see if you are even in a negotiating position.

Basically, lenders look at your current home value (see Zillow or Realtor.com), minus $30-50k in fix up costs they assume will be needed to 'make ready' for selling it, minus realtor commissions and closing costs they'll have to pay (6%+), minus your 1st TD. If this number is negative, you're in a good position to get a settlement. If this number is positive (your equity) they're more likely to wait you out.
Thank you both for your replies.
I am aware that the debt still remains even after the charge off. We had two different collection agencies trying to collect from us for the same debt and that is why I want to know if it would be better to negotiate with BOA. They all want financials and say they have been engaged by BOA.
As far as Inknow BOA still holds the lien. I’m not sure if we want to file for bankruptcy or even qualify for it as our only debt is the mortgage and some minor medical bills that we pay monthly.

I believe we are still somewhat underwater. The first mortgage is around 127k, the second was 37K and there are repairs that need to be made. Last month a house in the same row as ours in better condition sold for 187.5k ( they changed all the windows and carpets). Their asking price was 195k. Zillow has ours valued at 190 but no way that is accurate.

We don’t care for the house but I would much rather stay here than pay the crazy rents in our area.
 
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Chasegame2019

Guest
Thank you both for your replies.
I am aware that the debt still remains even after the charge off. We had two different collection agencies trying to collect from us for the same debt and that is why I want to know if it would be better to negotiate with BOA. They all want financials and say they have been engaged by BOA.
As far as Inknow BOA still holds the lien. I’m not sure if we want to file for bankruptcy or even qualify for it as our only debt is the mortgage and some minor medical bills that we pay monthly.

I believe we are still somewhat underwater. The first mortgage is around 127k, the second was 37K and there are repairs that need to be made. Last month a house in the same row as ours in better condition sold for 187.5k ( they changed all the windows and carpets). Their asking price was 195k. Zillow has ours valued at 190 but no way that is accurate.

We don’t care for the house but I would much rather stay here than pay the crazy rents in our area.
So I would do the math as follows-

Zillow value $190,000
1st mortgage -$127,000
2nd mortgage -$ 37,000
Repairs -$ 30,000 ($30-$50k is supposed to be what lenders assume on the avg home)
Lender cost to sell -$ 12,000 ( probably low as lenders will normally pay realtors 6% alone)
Equity - $16,000

So, in my opinion, there is no apparent monetary advantage for the 2nd lien holder to foreclose to collect their $37,000 because they would have to pay off the first($127,000) plus do the repairs ($30,000), then pay the selling costs ($12,000) leaving them $16,000 short. No lender will take that risk in my opinion.

I would definitely visit the county recorder to see who actually owns the second lien. When you do the math above, it allows you to be confident that the 2nd lien value is basically worthless right now.