Trying to Settle 2nd with SLS

bigfrog

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Aug 31, 2011
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hi Preparingfordefault,

You must be in some kind of stress. after stop making payments for 2.5 years. wow, I am not sure why you still need a credit card after not making that many payments. as for me, I living well, without paying my second, who cares about credit when you have the money. Its money, not credit, were you eventually have to pay back.

Depends on how much you owe and rate; on a second, you are looking to pay around $500*12 => 6000 *2.5 = 15k saving.

I dont think anyone hates anyone here. It's a decision we all made voluntarily when we decided not to pay and fight for our hard earned money.

What you are sharing is proof of that the Strategy for Settling Your 2nd works. Your credit is ruined, as stated. They attempted to settle with you, at 35%. If you want a lower percent, you got to wait longer. Its a very long process,as mentioned so many times.

Give you bad credit, put a lien on your home(its already there since day one), threaten to foreclose, and call you twice a day.. What else can they do? Think of it this way. You are giving up your credit in trade of your hard earned money(for some thats over 15k), and most important, you are creating jobs. Thats right!! They need to pay someone to keep calling you twice a day. They need to pay someone to drive up your home, knocking on your door and leaving love letters.

As for me, i feel like this is one of the great things I am doing in life. I cant wait until I exceed 2.5 years. I started in May, and so far its great. I see house prices are creeping up, I am not sure how. Until I see the national income average increase, I am not going to believe higher house price. there are 5houses near me that are foreclosed. No one lives in it, grass died. Someone is hacking the system again. If the price is right, go ahead Second and foreclose, then they woke up from a dream. If the price is ever right, I'll sell it myself.
 

Wisconsin guy

LoanSafe Member
Dec 3, 2009
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Great White North
What are the chances of a lender trying to garnish wages, etc. to recoup a second mortgage? I'm going to lose my job and will not be able to pay for my second, what about trying to garnish my wife's wages if she were working? Has anyone ever had this happen to them? What about a lawsuit to recover a second mortgage?
 

bigfrog

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Aug 31, 2011
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garnish???

Most people on here are making 100k plus, with large savings and bank accounts. Why do you think they don't want to release their financial info? Smart people dont give up their money easy, fight the greedy lenders. They knew this would happen but they still lended. This is greed at its best.

Because the fact that houses are underwater, have no Equity, and in a Non-Recourse States, it is not feasible for the second lenders to foreclose, it fact it would cost them a large amount to proceed. Even though, depends on what you had done, Non-Recourse can become recourse.

Wisconsin is a recourse State. But in general the laws are tricky, you need to do some researches(or seek experts/ legal advices). Everyone situation is delt differently.

I found this quote:

"For those of you in California with recourse loans with the same lender, THE LENDER CANNOT COME AFTER YOU FOR THEIR SECOND WHEN THEY FORECLOSE ON THEIR OWN FIRST. We were in that situation with 2 loans, both same lender, both taken at same time. They were recourse because they were refinances and we took cash out. I did my research. LOTS of it. And then I was pointed to a court case that makes it pretty clear. In Simon v. Superior Court, 4 Cal.App.4th 63 (1992), a bank gave two separate, sequential loans to a debtor. The first loan was secured by a first deed of trust on the debtor's personal residence. The second loan was secured by a second deed of trust on the same property. Neither loan was purchase money (these loans were recourse). After default, the bank non-judicially foreclosured the first, credit bidding less than the amount due, and then sued the debtor for $375,000 on the second note. The court barred the bank from recovery on the second note, holding that it amounted to a deficiency barred by 580d.
It has to be the same lender up to and through the foreclosure. Our second was transferred two months after our foreclosure took place. When that happened our attorney contacted the new lender. They said they were aware of the law and that they would not be pursuing collection efforts. So don't let anyone tell you any different. They can send you a 1099 for what you didn't pay though, just like the first lender will send you a 1099 for a deficiency.
Kate - your second was given to you using the home as security against the loan. As long as that security is there, the banks allow you to continue paying the loan in payments. Once you default on that security and some other entity owns the property they no longer have any legal rights to it. That loan they gave you becomes "unsecured" whereas before it was secured by the home. So yep, they will now expect you to pay."
 

Wisconsin guy

LoanSafe Member
Dec 3, 2009
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Great White North
I hear ya bigfrog, I was just throwing it out there to see if anyone had any of the same concerns.
I was receiving daily phone calls from SLS for a week or so then nothing for a couple of days. I just received a modification agreement from SLS via FedEx today. I won't give details unless someone wants them but its for a certain percent; and a lower monthly payment, blah, blah, blah. They want to charge me a $250 fee to do this on top of the new payment, what part of "I can't afford to pay you" do they not understand? What I'm tempted to do is to return this mod agreement (unsigned) back to them (in their FedEx prepaid envelope) however I'll offer to settle my loan for 5 percent and toss it back at them, bad idea or should I just keep waiting and settle down the road?
 
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TomEason

LoanSafe Guide
Jun 18, 2009
12,390
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SF Bay Area CA
Wisconsin guy

Thanks for your post.

I recommend you counter SLS at a settlement price lower than your target price. Yes, I think sending your counter to them in the prepaid Fedex envelope is a good idea.
 

bigfrog

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Aug 31, 2011
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yup give them something lower than what you have in mind

a while back, I'd read somewhere that some lenders were selling out bunch of their loans at 15% or something low. I wouldn't be surprised that they'll start offering loan mods and settlements greater than what they had originally got them.

the lenders are in business to make money, they wouldn't just give random lower rate, payments. mods are scheme, use to squeeze the blood outa you. you tell them that you cant afford but they know you can because you still eating. until the day you dont have enough to eat, they aint listening.
 

Wisconsin guy

LoanSafe Member
Dec 3, 2009
119
10
18
Great White North
Wisconsin guy

Thanks for your post.

I recommend you counter SLS at a settlement price lower than your target price. Yes, I think sending your counter to them in the prepaid Fedex envelope is a good idea.
Thanks TomEason, this evening I'm sending in a settlement offer returned conveniently to SLS in their own FedEx envelope addressed to the Recovery Department. Wish me luck! What I find interesting is I've avoided answering SLS calls for ~2 weeks, then they stopped calling all together and I received the modification after only missing 2 payments, I thought they would hound me for quite a while before trying to get me to modify. Here's hoping they'll want to settle and I'll be done with this rather quickly.
 

TomEason

LoanSafe Guide
Jun 18, 2009
12,390
85
48
SF Bay Area CA
Hi Wisconsin guy

Thanks for your post.

FYI, I doubt if your settlement negotiation will go "rather quickly." Instead it likely will be a long process; your patience is required.
 

bigfrog

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Aug 31, 2011
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yo Wisco

not to pick on anyone. but now and then, I fine myself pondering about this question. => so one is telling them that one can't afford, thus one is defaulting and wanting to settle for the release of the lien/note. One plans to write an offer letter, stating one willing to offer 5k or something like that for the release. keep in mind the month payment is around $500, with 5k, you can make payments for almost a year.

It appears, that one should be blunt about it, and not mention the can't afford or hardship. If they ask why, just tell them you fighting back!!
 

Jpeluso

LoanSafe Member
Oct 28, 2013
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Tom, I am BRAND new here. Please Please take the time to read my situation (I will be very brief) and let me know if I should follow your "strategy for settling the 2nd process." Thanks!

MY situation: I have 2 loans. My primary I owe about 130k still. My second loan was a HELOC and I owe about 22k. These loans WERE both BOA (originanly Countrywide) then were sold. Now the primary is Nationstar and my HELOC (or 2nd loan) is SLS (Specialized Lending Services). I rent out my home for the last year and a half, but lose $$ each month. It is just a money drain. Also, the value of the home took a big hit. Its a condo in NJ and I see the same units listed for about 110k give or take...

I am really considering just beginning the process you outlined for trying to negotiate a cash settlement for the 2nd loan. Or should I stop paying the 1st loan? Strikes against me are that I make decent $$ and technically can afford (until I lose my renter) to pay for all this. But I dont care..I had so many attempts when it was BOA to try and refi or get a loan mod, and they shunned me.

My questions: 1. DO i begin with your process for the 2nd loan, or do I stop paying the 1st loan with Nationastar instead, or both? I feel more comfortable with addresing the 2nd because my payments each month are so low, that if I stop paying and decide later to pay the bank, its not going to be tough for me to come up with those missed payments...

2. Because the mortgage forgiveness debt relief act is expiring am I screwed? In other words, if I get my HELOC down to a settlement of lets say only 5 or 10%, is it even worth is still if I have to pay tax on the forgiven amount? Also if I get the 2nd loan addressed, will I be able to continue paying my 1st loan, and still live in the house?

3. Any other course of action you suggest instead? Thanks so much...sorry for the long message here....


Hi Wisconsin guy

Thanks for your post.

FYI, I doubt if your settlement negotiation will go "rather quickly." Instead it likely will be a long process; your patience is required.
 

bigfrog

LoanSafe Member
Aug 31, 2011
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Status Update

Yo Wisco... Any respond from SLS since you sent out the offer? They are playing some psyco game. trying to intimidate me with big jargons like foreclose. This is great...


Jpeluso... Everyone on here make six figures, but that's irrelevant info. The whole issue isn't about able to pay, it is about keeping your hard earned money( Concepts ). If some of you don't want your money, donate it to charity. More meaningful than giving it to the greedy second lenders.

If I knew about this Strategy since day one of the loan.. I would have started the non-payment plan on day one. Thats how bad it was with the underwater issue. One thing I regret is not buying the bigger house, at the time.

Some people have not paid their second mortgage for years, still the lender cant really do much. And thats they way they wanted it.
 

TomEason

LoanSafe Guide
Jun 18, 2009
12,390
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48
SF Bay Area CA
Hi Jpelsco

Thanks for your post.

Since your 2nd is underwater, SLS won't FC. I recommend you settle by following the Strategy.

If you want to keep the property, I recommend you remain current on your 1st. And if your renter vacates, find another one.
 

Jpeluso

LoanSafe Member
Oct 28, 2013
22
0
1
40
Hi Jpelsco

Thanks for your post.

Since your 2nd is underwater, SLS won't FC. I recommend you settle by following the Strategy.

If you want to keep the property, I recommend you remain current on your 1st. And if your renter vacates, find another one.
Ridiculous question I'm sure, but how do I know if my "2nd" is underwater? If I look at what I owe in totality on my property (on both loans) then yes, I would sell the place and still owe some $ (likely about 10k). But my second loan is only about a 22k balance... Would this strategy still work lets say, if I decided not to pay just the 2nd loan like we discussed, but over time the value of the proeprty rises to where its not "under water?" Not that this is the case, but I beleive values have gone up slightly and its heading in that direction....
 

Wisconsin guy

LoanSafe Member
Dec 3, 2009
119
10
18
Great White North
Yo Wisco... Any respond from SLS since you sent out the offer? They are playing some psyco game. trying to intimidate me with big jargons like foreclose. This is great...


Jpeluso... Everyone on here make six figures, but that's irrelevant info. The whole issue isn't about able to pay, it is about keeping your hard earned money( Concepts ). If some of you don't want your money, donate it to charity. More meaningful than giving it to the greedy second lenders.

If I knew about this Strategy since day one of the loan.. I would have started the non-payment plan on day one. Thats how bad it was with the underwater issue. One thing I regret is not buying the bigger house, at the time.

Some people have not paid their second mortgage for years, still the lender cant really do much. And thats they way they wanted it.
Frog- I haven't heard a thing, no calls, letters, notes left on the front door, etc. Maybe they didn't think it was funny that I returned their mod offer with my own offer in their FedEx envelope?!? LOL, I have all the time in the world to wait this out and that's exactly what I'm going to do, my house is so far underwater that it will take a looooooong time to get back to level and I'm not worried about SLS foreclosing, it would cost them a fortune to try and recoup.
 

TomEason

LoanSafe Guide
Jun 18, 2009
12,390
85
48
SF Bay Area CA
Jpetsco

Thanks for your question.

I realize that in many markets home prices are appreciating. I recommend you get a current CMA on your home, and keep an eye on comps in your neighborhood. If it appears your 2nd becomes close to being clearly in the market, you may have to modify your strategy and be more proactive in pursuing settlement.

The following thread is all about settling in-the-money 2nds. http://www.loansafe.org/forum/debt-settlement/41196-settling-money-2nds.html

For info on how to determine if one's 2nd is underwater or not, you might visit this thread. http://www.loansafe.org/forum/debt-settlement/86947-how-determine-if-2nd-lender-will-foreclose.html
 

Jpeluso

LoanSafe Member
Oct 28, 2013
22
0
1
40
Jpetsco

Thanks for your question.

I realize that in many markets home prices are appreciating. I recommend you get a current CMA on your home, and keep an eye on comps in your neighborhood. If it appears your 2nd becomes close to being clearly in the market, you may have to modify your strategy and be more proactive in pursuing settlement.

The following thread is all about settling in-the-money 2nds. http://www.loansafe.org/forum/debt-settlement/41196-settling-money-2nds.html

For info on how to determine if one's 2nd is underwater or not, you might visit this thread. http://www.loansafe.org/forum/debt-settlement/86947-how-determine-if-2nd-lender-will-foreclose.html
Thanks, Based on this, I am clearly underwater on my 2nd by 50k-70k.
 

bigfrog

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Aug 31, 2011
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Just spoke to SLS Rep

hey guys,

After 6months, I decided to answers one of their calls. My second attempt speaking them to let them know I want to settle. Appears they acting ignorance, and tricking me about the foreclose process once again.

So the rep first varify my contact numbers. After telling me how much that I owe, then she asked if I want to make payment to keep the loan current. I said No! She asked, what do I want to do? I said that, I want to settle for the release of the lien. She asked, Why is that I dont want to make a payment, is it because of some kinda hardship? I told her that I am not going to release those information. She then said, do I want to see if I qualify for a modification. I told her, no. She asked, why? I said because I had done my research, I know that SLS doesnt participate in 2MP. She said they do modification for second. But I said its not the same. Then she asked who is my first lender and if I was current with them. I said that I am current with the first. Told me the amount I owe with the first.. kinda hinting the best thing to do is short sale. Then she asked me what is my plan for the house. I said, I am keeping it to live in.

Then she asked, how is that I am planing to do that? I responded, well, I am currently living in it, nothing to plan. Then she said, if I dont pay, they'll foreclose. I told her that, you can do what you want to do. The last thing she said, "I'll make a note of that. And have a good day." She hung up.

I heard some seconds will foreclose even if there is a loss. I guess if you get them angry enough, they'll rather take the loss then see you living in it.

Let me have some opinions.. or what you guys have experienced.

Thanks..
 

Wisconsin guy

LoanSafe Member
Dec 3, 2009
119
10
18
Great White North
Bigfrog- Sounds to me like the woman you talked to has no idea what's going on other than to try and get a payment out of you. I don't plan on talking to these people in person if I can help it, I want everything in writing when the time comes to settle. Talk to 10 different people and you'll most likely get 10 different answers, all these companies want is a payment... good luck!
 

bigfrog

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Aug 31, 2011
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Lets the game begin

yo..Wisco, Thanks..

I know exactly what you are saying. Few hours after SLS lady hung up, I got a voicemail from 512-377-9552(Armstrong Storage), here are the exact words:

"Hello? aah, oh, this is Jay. And a, I am calling regards to the mortgages on your property. I have some good news. It looks like we can be able to get you a reduce monthly payments and interest rate. And get you under a new term and condition for your loan. It is urgent that I speak to you today. My number is 888-372-0996. Again that is 888-372-0996. Again this is Steve, and I am calling about getting you under a new reduced payments for your mortgages. Regardless situations, underwater or behind payments. Please dont worry, we are here to help. My number is 888-372-0996. 888-372-0996. I look forward to hearing from you. "

888-372-0996 (Seattle Public Aution House.) <--very strange

Even with the same person. the person's name isn't. I am not sure what kind of help they are offering if they cant get their phone number and name proper stated. They probably arent aware my situation. Unless they can get me a release of the lien on the 2nd for no payment( or 2cents on a dollar.), I dont think they can really help.

This is how you know you got them by the balls. see them struggling to get what they can from you.

I'll keep you guys update.

Thanks...Keep on fighting for those coins.