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Anyone ever negotiate a settlement on an underwater second mortgage or HELOC?

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    Anyone ever negotiate a settlement on an underwater second mortgage or HELOC?

    We're 100% underwater on our second mortgage. We did an 80/20, and it's possible that even the 80 is under by a few thousand. But there's no doubt the 20 is totally unsecured at this point. I'm just wondering if anybody's ever successfully used a strategy to reduce the 2nd or HELOC. Like not pay for a year or two and then negotiate a settlement to release the lien?

    We had our first and seconds through the same big bank, but my first was sold to a new bank the day after I filed. (I had received notice it was being sold about a month earlier, before my filing date. Sucks to be the new bank, eh?) I was just thinking/hoping/wishing the sale of my first to the new bank would be a disguised blessing since now my second is held by a different bank. If I was foreclosed for not paying the second, there'd be nada left for the second holder, so there's little if any incentive for them to foreclose on me, n'est-pas? We're stay and pay, btw.

    #2
    One of the posters who spent a lot of time here in 2009/2010 did so. I can't recall her profile name. She was in southern California area. I'm sure someone will remember. She wrote extensively about the process.
    Well, I did. Every one of 'em. Mostly I remember the last one. The wild finish. A guy standing on a station platform in the rain with a comical look in his face because his insides have been kicked out. -Rick

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      #3
      Generally, I have only seen these settlements when the person filed BK or unless the person lives in a non-recourse state (meaning, the 2nd mortgage cannot pursue the borrower, you, for the deficiency).
      Last edited by HHM; 02-17-2012, 03:32 PM.

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        #4
        Originally posted by OhioFiler View Post
        One of the posters who spent a lot of time here in 2009/2010 did so. I can't recall her profile name. She was in southern California area. I'm sure someone will remember. She wrote extensively about the process.
        That was me OF, yes I did successfully negotiate a settlement on our HELOC with Wells, and it wasn't 100% underwater. We ended up settling for 10 cents on the dollar, so $20K on a $200,000 loan.
        Filed Chapter 7: 7/3/09
        341 Hearing: 8/6/09 - Went Smoothly!
        Discharged: 11/30/2009
        Closed: 12/16/2009

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          #5
          I just received a settlement offer for my HELOC. I will pay $5000 on a $101,000 loan.

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            #6
            Thanks for the posts. I'm not sure yet that I have the gumption to do it, but the idea is still floating around in my head. Those of you who did it, did you just stop paying? I'll search your u/n 2manybills to see if I can glean any info.

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              #7
              I've been researching the same thing and was directed to this site.

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                #8
                Originally posted by my2girls View Post
                I've been researching the same thing and was directed to this site.
                http://www.loansafe.org/forum/debt-s...-your-2nd.html
                Thank you! Will start reading now.

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