Success Stories in Settling 2nds

bkakca

LoanSafe Member
Jul 5, 2013
189
20
18
the lender that took over our 2nd mortgage was veripro/nationstar mortgage. they are tough to deal with.
2MP Participating Servicers
The servicers that are currently participating in 2MP are:

  • Bank of America, NA
  • BayviewLoan Servicing, LLC
  • CitiMortgage, Inc.
  • Community Credit Union of Florida
  • GMAC Mortgage, LLC
  • Green Tree Servicing LLC
  • iServeResidential Lending, LLC
  • iServeServicing, Inc.
  • J.P.MorganChase Bank, NA
  • NationstarMortgage LLC
  • OneWestBank
  • PennyMacLoan Services, LLC
  • PNC Bank, National Association
  • PNC Mortgage
  • Residential Credit Solutions
  • ServisOne Inc., dbaBSI Financial Services, Inc., and
  • Wells Fargo Bank, NA.
Thank you for the info.
 

Sugarpike

LoanSafe Member
Dec 14, 2010
14
0
1
I come to this forum every year or so to see if there's anything new - right now I have a question on my 2nd and I see that the original thread I used to watch has closed. So here goes - pursuant to TomEason's advice from a few years ago, we stopped paying on our 2nd mortgage of $84,000 in September of 2013. (We're in California). Our loan has since been transferred twice. We continue to get a monthly statement from our current holder of the mortgage, but haven't ever received anything else from them in the way of a demand. I don't answer the home phone, no answering machine on it, and they don't have my cell number. However, we have received what I think are suspicious mailings, twice now, from a group called Aspen G LLC, claiming to be a company to whom we can pay our 2nd, and referencing, in passing, our current holder. The suspicious part, to me, is that they also reference First Franklin, who was our original lender back in 2005, and who sold the loan in 2009 or 2010. I'm not even sure First Franklin is in business any longer. They claim to have filed papers with the city in which we live, and this paperwork says that First Franklin has granted rights to someone else called US Mortgage Resolution. Again, a name with which I'm not familiar. Does this seem fishy to anyone else?

Also, my credit report indicates that my second was charged off (also referred to as "written off" back in 2014. What exactly does this mean, and should I be getting monthly statements still from another servicing company ( the one who hasn't ever tried to contact me except for the monthly statement)?

Thanks for any input - or if there's a different thread I should put this in, please let me know.
 

WalkinBlues

LoanSafe Member
Jul 11, 2012
50
5
8
sounds like a possible scam, maybe somebody got a copy of your credit report and are fishing for personal info. unless they get legal on you i would continue to ignore

as far as 'charged off' , thats basically internal accounting/reporting and does not at all mean they are relieving you of the debt or that they wont come after you for it

is the house underwater? how is your first mortgage? what are your long term plans?

one thing i can say is the more hands it goes thru, the more difficult it is to prove ownership of that note if they sue you.

or alternatively they may have bought that debt for pennies and would settle way low....

you need to determine who owns the note, more than likely you'll know soon by watching your credit report (credit karma is great). "granted rights to" is kinda vague. they either sold the debt, or still own it and are paying someone else to service/collect it.

watch your local court publishings to make sure they dont sue you, debt collectors arent known for doing proper service
 
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cuegis

LoanSafe Member
Jul 19, 2010
139
6
18
I am in a different situation. But I am still trying to see if I can do something.

I received a Hamp on my 1st 3 years ago.

$365,000 at 2% for 25 years
And then on my Heloc a 2MP

$523,000 at .5 % for 40 years. It really is at 1% but 1/3 of the total is in forbearance for the full 40 years at 0% so it averages out to less than 1%.

I am current, and always have been on both, and I am well above water.
But, I am going under the feeling that no bank wants to have $523,000 gone for 40 years ( I will be 100) at less than 1%.

So, I am going to speak to to Citi and offer to pay the Heloc in full NOW (well, in the next 3 months) in one lump sum, IF they can agree to a discounted amount. Maybe something like $350,000.

Do you think I have any chance?

The original Hamp papers that they have on file has my home valued at $720,000 putting me underwater.

But the price has risen to $1.5 over the past 4 years and I am sure they do not know about this.
I doubt they constantly track the value of homes that people have mortgages on.

I have meetings and phone calls planned for this week to talk to them about this.
 

1queen3kings

LoanSafe Member
Mar 31, 2016
3
0
1
39
I'm starting this thread at the suggestion of cahomeowner, who thought it might be helpful to those members who don't have the time to read through pages and pages of comments in search of a success story.

If you're curious which strategies have worked, and what the circumstances were for those individuals, you will likely gain value from this thread.

I've read on these boards settlement success at prices ranging from as low as 2 percent of the balance (unusually low) to about 40 percent of the balance (very high). Typical settlement prices seem to be running in the range of 5-10 percent of the loan's balance.

The challenge is those posts are spread out among many different forums and threads.

Hopefully this thread will help consolidate those stories, and will thereby facilitate a member's personal choice of his/her own negotiation path.
 

1queen3kings

LoanSafe Member
Mar 31, 2016
3
0
1
39
We were finally sued by BOA on our SOJL one year shy of making it to the SOL. We initially attempted a settlement with Greentree Servicing for BOA which they refused and house went into foreclosure. Greentree was horrible and even had people come to our house and leave letters on our door, they told me I should pay the second before I buy groceries for my kids. However, we have finally been negotiating with a law firm after being served with papers and they were professional and have made the process bearable. We provided financials and after some back and forth we have settled for 25% and lawsuit dropped. We are relieved to have this over with.
 

bkakca

LoanSafe Member
Jul 5, 2013
189
20
18
We were finally sued by BOA on our SOJL one year shy of making it to the SOL. We initially attempted a settlement with Greentree Servicing for BOA which they refused and house went into foreclosure. Greentree was horrible and even had people come to our house and leave letters on our door, they told me I should pay the second before I buy groceries for my kids. However, we have finally been negotiating with a law firm after being served with papers and they were professional and have made the process bearable. We provided financials and after some back and forth we have settled for 25% and lawsuit dropped. We are relieved to have this over with.
Hello 1queen3kings, just to clarify, you settled with the law firm for Greentree after the house was foreclosed on? Or were you able to reach a settlement of 25% and keep your home?
 

1queen3kings

LoanSafe Member
Mar 31, 2016
3
0
1
39
Hello 1queen3kings, just to clarify, you settled with the law firm for Greentree after the house was foreclosed on? Or were you able to reach a settlement of 25% and keep your home?
My apologies if I was not clear. Our house foreclosed in 2010 so no we do not still have the house. The second mortgage became a sold out junior loan when we foreclosed . We attempted a settlement for the second prior to foreclosure with GreenTree (who was servicing the second loan at the time for BOA who owns the loan) without success. No word from second for 5 years until we were served with the lawsuit prior to the SOL running out for the entire second loan amount. The settlement was reached with law firm representing BOA prior to going to trial. In a sense a success for settling a debt at 25% however, we are one of very few that have been sued for SOJL as far as I can tell, and so close to SOL running out.
 

momofboys

LoanSafe Member
Dec 27, 2010
35
0
6
So......I just thought I would check my credit report to see if anything had changed and I see this from Ditech....

Last Reported
Feb 29, 2016
Creditor Name
DITECH
Account Type
Conventional Real Estate Mortgage
Account Status
Closed - Derogatory
Opened Date
Dec 20, 2006
Closed Date
Mar 20, 2015
Limit
--
Term
360 Months
Monthly Payment
$0
Responsibility
Joint
Balance
$75,583
Highest Balance
$77,593
Payment Status
Collection/Charge-Off
Worst Payment Status
Unknown
Date of Last Payment
Apr 15, 2011
Amount Past Due
$65,000
Times 30/60/90 Days Late
0/0/0
Remarks
Charged off as bad debt
Affected by natural disaster

I am not sure where the "affected by natural disaster" came from and it is now showing closed. Anybody seen this before?
 

Sugarpike

LoanSafe Member
Dec 14, 2010
14
0
1
sounds like a possible scam, maybe somebody got a copy of your credit report and are fishing for personal info. unless they get legal on you i would continue to ignore

as far as 'charged off' , thats basically internal accounting/reporting and does not at all mean they are relieving you of the debt or that they wont come after you for it

is the house underwater? how is your first mortgage? what are your long term plans?

one thing i can say is the more hands it goes thru, the more difficult it is to prove ownership of that note if they sue you.

or alternatively they may have bought that debt for pennies and would settle way low....

you need to determine who owns the note, more than likely you'll know soon by watching your credit report (credit karma is great). "granted rights to" is kinda vague. they either sold the debt, or still own it and are paying someone else to service/collect it.

watch your local court publishings to make sure they dont sue you, debt collectors arent known for doing proper service

SO SORRY I didn't see this until just now! To answer your questions - yes, our house is still way underwater, and we're current - never been late - on our first. We do receive a monthly statement for our 2nd - and it's just that - a statement. They've never contacted us in any other manner. And they're local, the next county over, so it's easy enough to actually find us if they wanted to. To make matters more interesting, the company I referenced above in my post, Aspen Group LLC, has found my husband's and my cell phone numbers and has called us each one time. The gal on the phone mentioned she needed me to call her back "in reference to the 2nd mortgage" but made no claim as to being the holder of said mortgage. I'm really leaning towards scam...but I will definitely check the court publishings, as you suggested, and make sure they don't try anything fishy.
 

Foret

LoanSafe Member
Feb 2, 2016
20
6
3
44
Hi All,

Posting in this thread as I think I might have a success story and also for wider exposure hoping for more feedback/guidance. I do not want to cry victory yet, but it is still extremely overwhelming as I never thought I would get this far and definitely not this fast as I just started this journey. Very emotional!

My fully story is here: http://www.loansafe.org/forum/threads/citi-stopped-paying-2nd-need-advice.91014/

In summary, after a lot of back and forth with Alliance One, I received a letter yesterday stating that Citi agrees to settle for $10K without any financial docs from me. I am extremely tempted to accept as I want to put this behind me, move on and also take advantage of the Debt Relief Act (I understand that it has been extended to cover 2016 right??). However I am very worried to proceed because of the following part in the letter:

"Upon receipt and clearance of all funds, we will notify our client that you have satisfied your account. Our client, Citibank, will be responsible to release its lien associated with this property and waive the deficiency balance on the above listed account".

There is nothing in the letter guarantying that the lien will be released and nothing about about what will happen to my credit. I called back Alliance and was told that this is their standard letter (advised/approved by their attorneys) and they cannot change it nor put in the specific terms and conditions I am asking for. Next I called Citi directly and got confirmation about the settlement agreement. However Citi is telling me that they cannot give me a letter either because everything is being handled by Alliance One. So I am very worried about paying the money, and then finding out later that Citi can:#1-still come after me,#2 refuse to release the lien,#3 refuse to forgive the remaining debts and/or#4 refuse to report "settled in full" to the credit agency.

Does anybody know if this is standard if dealing with the collector? Did anybody face this situation and was able to convince them to change the letter? I am so worried that this could be a scam and that they might be fooling me just to get the money and then end up having Citi coming after me in the future or having to fight for the lien.

Thanks in advance for any advice and guidance anyone can provide! I am truly grateful for all the incredible help!
 

triguy

LoanSafe Member
Dec 26, 2012
8
0
1
DEMAND to have in writing that the account is "paid in full" or "settled in full" and it is clearly stated that lien will be released on your home. You will then get a 1099 for the unpaid balance. You will have to file this in your tax return for the year they issue it, so you have to push them to settle it in 2016 in order to get the relief for the discharge of indebtedness. You will file this 1099 with your tax return but you are not liable for the income tax from the amount forgiven. I know because 3-1/2 years ago I settled a $62,430 interest-only HELOC from SLS for $7,500 after less than a year of not paying them during my "hardship".
 

custombuilder

LoanSafe Member
Jul 25, 2013
47
6
8
Northern CA
DEMAND to have in writing that the account is "paid in full" or "settled in full" and it is clearly stated that lien will be released on your home. You will then get a 1099 for the unpaid balance. You will have to file this in your tax return for the year they issue it, so you have to push them to settle it in 2016 in order to get the relief for the discharge of indebtedness. You will file this 1099 with your tax return but you are not liable for the income tax from the amount forgiven. I know because 3-1/2 years ago I settled a $62,430 interest-only HELOC from SLS for $7,500 after less than a year of not paying them during my "hardship".
 

custombuilder

LoanSafe Member
Jul 25, 2013
47
6
8
Northern CA
Helps to write something first.

Triguy - how did you get SLS to settle - I haven't paid in 4 yrs - completely underwater. Current on 1st now but didn't pay on that for nearly 15 months. I owe in excess of $250K on 2nd with interest & penalties tacked on to original $185K.

I'm in a position to settle if I can get it done for 10% of $185K not the 250K. 1st starts amortizing in Dec which means more equity for SLS. If I don't think I can settle I'm going to walk away from both and let 1st foreclose and SLS will get nothing. I don't have anything to pursue so won't get very far if they try to get a judgment. (not purchase money loan).

There are very very few success stories with SLS on this forum.
 

mhank

LoanSafe Member
Aug 31, 2012
42
0
6
I have a success story. It's not a complete extinguishment by any means, but at 35% plus lawyers fees, I am done with it and can move on.





Congratulations on your settlement! I, too, am attempting to settle with Citizens, but they will not talk to me about settling unless I submit financials. Who did you contact at Citizens Bank? They are trying to get me to agree to a payment plan instead of a lump sum.
 

mhank

LoanSafe Member
Aug 31, 2012
42
0
6
I have a success story. It's not a complete extinguishment by any means, but at 35% plus lawyers fees, I am done with it and can move on.

RBS Citizens/charter One. Took almost 3.5 years from last payment to settlement. Bank sued on Breach of contract. Finally agreed to settle without financials. Released Lien. Reported as Settled in full.


I have a success story. It's not a complete extinguishment by any means, but at 35% plus lawyers fees, I am done with it and can move on.
 

triguy

LoanSafe Member
Dec 26, 2012
8
0
1
Helps to write something first.

Triguy - how did you get SLS to settle - I haven't paid in 4 yrs - completely underwater. Current on 1st now but didn't pay on that for nearly 15 months. I owe in excess of $250K on 2nd with interest & penalties tacked on to original $185K.

I'm in a position to settle if I can get it done for 10% of $185K not the 250K. 1st starts amortizing in Dec which means more equity for SLS. If I don't think I can settle I'm going to walk away from both and let 1st foreclose and SLS will get nothing. I don't have anything to pursue so won't get very far if they try to get a judgment. (not purchase money loan).

There are very very few success stories with SLS on this forum.
Well - it would help if you are NOT paying both to show true hardship. I was in a good place in 2012, because back then I was self employed as a 1099 consultant. What I did is I told half my clients to stop paying me for 6 months - this shows I had limited cash flow income. Then I took big chunks of $ out of my bank accounts and put them elsewhere (ie under mattress or in SD box) to show that I had very little money to pay my living expenses, plus my home was barely worth $240k and completely underwater.

I first got my home in April 2006 via two subprime I/O loans (80/20) thru Citywide Mortgage and GMAC (HELOC). The loans were sold off a few times ending with ultimately Bank of America servicing the first note from Countrywide mortgage and SLS.net servicing the HELOC.

Original balances (interest only):
1st mortgage = $333,000 BoA
HELOC = $62,430 SLS.net

My tax assessment for 2012 for my home was $228k and given my loans added up to $395k, I was obviously upside down and unable to refi or get a better loan. My home, at best, would probably short-sell for $240k, but my main intent was to keep my home and get a loan mod with BoA and (hopefully) settle the SLS.net HELOC.

So in the beginning of 2012, I stopped paying both loans in February 2012. I claimed financial hardship with BoA and SLS.net. I applied for a loan mod with BoA and told SLS.net I was not interested in a loan mod of any sort (they will require you to download their forms)...I kept in touch with BoA for purposes of getting a loan mod. However, with SLS.net, I basically ignored all calls and letters and a loan mod offer from them. I missed a total of 11 payments this year for SLS.net.

I missed a total of 5 payments with BoA, and finally in September, BoA offered me a 3mo trial period to qualify for loan modification. I was required and was able to make the 3 payments for oct/nov/dec and just last week, I was given a new loan agreement for the $333k first loan = $98k principal forebearance for 24 years, and new loan made on the remainder starting at 2 percent APR; ; and increasing slightly on an annual basis. At end of 24 years, I will have one balloon payment of $222k which I will have to payoff or refi at that time. And on top of that, I got pay-for-performance principal reductions of $1000/year from BoA for the first 5 years after my mod! (like getting $5k tax free!)

After I got that, I finally called SLS.net (i know these discussion boards say not to call, but it worked for my case). My loan after 6months went to charge off, so my account was sent to their Recovery department. I explained my hardship situation and given that I live in a recourse state, I let SLS.net know that I was not intending to NOT pay them at all - I offered a cash settlement to close out the loan in 2012 and release the lien on my home. All I did was give a verbal offer and the phone rep placed me on hold (to speak to a manager). Within 2min, they counteroffered me $500 higher, and I was able to settle my SLS.net HELOC for $0.12/dollar!!! Not bad for just ONE phone call after over 10 months!!! I paid via check on the phone ($9.95 charge) and I was issued in 2013 a 1099-C for the unpaid amount. I did NOT OWE the income tax on this via the "The Mortgage Debt Relief Act of 2007" since the HELOC was originated solely to obtain the home initially. I had good timing as this relief act was going to be eventually extended up thru 2016 from what I read.

So in the end, I got to keep my home with one modified 1st loan NO more HELOC! The money I saved from not paying BoA for 5 months and SLS.net for 11 months was more than enough to cover my settlement check to SLS.net to eliminate my HELOC and now for the past year, my home has about 3% equity (and I rent it out for a net profit, while I now live in a new home over 2x the size of my previous home). Even after a loan mod, you are able to buy another home provided you show that you have had excellent mortgage payment history for 24 straight months after mod. Hope you all have just as good outcomes with your underwater loans! My guess is that I lucked out because SLS.net was the servicer for my loan, but Wells Fargo was the actual note holder. WF was one of the big 5 banks named on the $25B mortgage relief settlement - Probably why it was pretty easy to eliminate my HELOC... GOOD LUCK with your loan reductions!!!
 

donnak0811

LoanSafe Member
Mar 11, 2011
61
1
8
Minnesota
I have finally successfully settled my 2nd with Suntrust Mortgage, after years of not corresponding with them. I received a 1099, filed my taxes and had to pay a little over $2,000. It was well worth it have that off my mind. It was a long process but I am thankful for all the help I got on this forum. I couldn't have done it without Tom Eason and others! Thank you so much! To the success of all of you settling your 2nds. Good luck!!
 

triguy

LoanSafe Member
Dec 26, 2012
8
0
1
I have finally successfully settled my 2nd with Suntrust Mortgage, after years of not corresponding with them. I received a 1099, filed my taxes and had to pay a little over $2,000. It was well worth it have that off my mind. It was a long process but I am thankful for all the help I got on this forum. I couldn't have done it without Tom Eason and others! Thank you so much! To the success of all of you settling your 2nds. Good luck!!
Are you saying you had to pay $2000 in income tax for discharge of indebtedness, or your settlement payment to Suntrust was $2000? You should not have to pay income tax on any debt forgiven for real property (i.e. homes).