Wells Fargo - Has anyone heard of this

[max11]

2manybills,
Did you fax or mail your settlement offer to Wells Fargo?
Any phone, fax or addresses would be greatly appreciated
Thanks

[catleg]

It occurs to me that all these 2nds are someday potentially a major asset for banks who do not settle them. I mean the good ones, where the 1st doesn't go into foreclosure, and eventually gets paid down. Any idea who is sitting on all this paper? Wells?

In a related question any idea who would be the owner of a HELOC originated with E-Loan and transferred to their parent BPOP and now serviced by CLC in Pittsburgh?

[BCA2009]

In my situation, there is probably 40K to 60K of equity in the the 2nd. The 60K is on the top end and would be if the house sold at the full market retail, which would require sitting on the market for while to find the perfect buyer. I'm not even sure they could get that. My 2nd is for 137K. I am willing to settle for 30K to 40K. Alternatively if they paid foreclosure fees and a realtor, there is no way that they could come out better if they foreclosed. I'm in a 60 year old neighborhood with a mix of fixed up houses and very run down ones. My home is the most expensive one on the street, some are valued at 70K to 80K less than mine. So it takes a buyer that want wants an older ranch home in an established neighborhood. These houses sit on the market for a while.

They could sit on the loan and hope the value comes back, but here in the Florida panhandle we have had several large layoffs in our town and one of the military bases is having a large drawdown. The market is about to be flooded with more properties. In addition, the oil spill is killing tourism and has the potential to put alot of small businesses under.

The home values are not coming back anytime time soon around here.


Brazzy, in your experience do the banks take into account the variables that I listed above (home sales per neighborhood and economic conditions) or do they just use generic formulas based on sales for a larger geograghic region?

I fully understand they may tell me to pound sand and that's their business, but if the roles were reversed and I was the investor rather than this being my home, I would take the 40K settlement in a heartbeat.

I'm only 3 months late now. I'll wait three or four more (or until they contact me before I try anything).

thanks for the opinions.

[hope2retire]

I don't plan to send WF anything else. Some lady on the tv was bemoaning the fact that it's social acceptable for people to walk away from a mortgage. I don't think the banks do themselves any favors by not working with people, especially now.

[albacore44]

Basically if there is a BK involved they will just sit on the lien and hope for the best. There really isnt anything they can do. Just have to be hopeful that the market over time will rebound, the debtor continues to pay their sr lien holders and thats it. In time the debtor will pay down the balance on the sr lien, the value of the home will go up and they will no longer be unsecured. Now I dont know if they would take a second look at these down the road for foreclosure. Its something in theory that could happen. Its not likely because it would negatively affect the market.. again... Im sure some overzealous AVP will come about for some creditor and give it a shot. Nothing is actually planned for that to happen. As of right now its just sit and wait for someday the owner of the home will need that lien off the property. As long as the home is not foreclosed on, all is good. Thats kind of the issue here with the settlement. Why settle now when they know the Sr lien holder is getting paid? As long as the house doesnt go to foreclosure they will have their lien, and time is on their side. A lot of creditors are looking to boost their numbers now tho. After a stretch of time in the red they would like to come out on top. Thats why some creditors will say they just need some supporting docs and they will settle now. There is no benefit to them settling now except it looks good on a financial sheet.

thank you. thats great information. i have found some information on line about one particular foriegn bank who has a lot of 2nd mortgage exposure sending unsolicited mailings to people who have not paid their 2nd for many months. the offer is a settlement of 3 1/2 percent lump sum for a Lein release. now thinking Logically, that makes sense, i like to use the phrase "a bird in the hand" , right now cash is king, now if your a bank sitting on a non producing asset, and you could get some cash now, the faster you could put that cash to work making more cash. Well that makes too much sense. well this whole crisis makes no sense. ohh well

[Brazzy]

Basically if there is a BK involved they will just sit on the lien and hope for the best. There really isnt anything they can do. Just have to be hopeful that the market over time will rebound, the debtor continues to pay their sr lien holders and thats it. In time the debtor will pay down the balance on the sr lien, the value of the home will go up and they will no longer be unsecured. Now I dont know if they would take a second look at these down the road for foreclosure. Its something in theory that could happen. Its not likely because it would negatively affect the market.. again... Im sure some overzealous AVP will come about for some creditor and give it a shot. Nothing is actually planned for that to happen. As of right now its just sit and wait for someday the owner of the home will need that lien off the property. As long as the home is not foreclosed on, all is good. Thats kind of the issue here with the settlement. Why settle now when they know the Sr lien holder is getting paid? As long as the house doesnt go to foreclosure they will have their lien, and time is on their side. A lot of creditors are looking to boost their numbers now tho. After a stretch of time in the red they would like to come out on top. Thats why some creditors will say they just need some supporting docs and they will settle now. There is no benefit to them settling now except it looks good on a financial sheet.

[albacore44]

. If there is a BK involved they just sit and wait. .

thank you for your openness.

now just what would they wait for ?? i know we are navigating in uncharted waters these days with all the defaults and crafty new mortgages that were created during the boom.

[Brazzy]

I do not know of any banks looking to buy out Sr mortgage holders. If its not worth foreclosing they are just charging off the 2nd and leaving it at that. Unless there is a BK involved they will kick it to collections, or a legal group to file suit. If there is a BK involved they just sit and wait. The only thing I am seeing is 1st lien holders keeping up with real estate taxes. I've see people become delinquent and they payoff any back taxes and tack it onto the loan and notify any Jr lien holders that they just saved their bacon. Thats about all when it comes to that.

[albacore44]

Both of you are right on. Basically as a person who negotiates short payoffs (once again one of my many job roles) you have to be able to back your decision up 100%. With that said you have to investigate every possible option and simply show why your option was the best one at the time. In asking for documentation they are not trying to screw you or anything. I mean the debt is discharged...how can they possibly screw you? Great they know you have an income and a bank account. Its not like they can garnish your wages or file suit against you. All they want is to back their decision up. Typically in this case if the first mortgage is current they want to be able to show that the debtor will have difficulty maintaining the payments if nothing changes. This will support their decision in saying that settling now was a good idea as there is a chance of foreclosure down the road and the risk of a big loss. The more info they have the more they can back up their decision one way or another. Give them nothing and they will give you nothing.

I gave the info I use to make my determination. Good luck.

let me ask you a question Brazzy, since your showing your cards. lets say for discussion purposes, someone has a 1st and 2nd with 2 seperate banks, and the loans are underwater. Now common thinking is that the 2nd will not foreclose since they would have to buy the 1st from the other bank to take control of the property, and still gain nothing. i have not read of any examples of 2nds doing this, as its a bad business decision, but in your experience.......are they ?? or are the banks who hold the 2nds sitting on the lein content to wait a few years until there is a little equity, then foreclose and buy out the 1st ??

[Brazzy]

Both of you are right on. Basically as a person who negotiates short payoffs (once again one of my many job roles) you have to be able to back your decision up 100%. With that said you have to investigate every possible option and simply show why your option was the best one at the time. In asking for documentation they are not trying to screw you or anything. I mean the debt is discharged...how can they possibly screw you? Great they know you have an income and a bank account. Its not like they can garnish your wages or file suit against you. All they want is to back their decision up. Typically in this case if the first mortgage is current they want to be able to show that the debtor will have difficulty maintaining the payments if nothing changes. This will support their decision in saying that settling now was a good idea as there is a chance of foreclosure down the road and the risk of a big loss. The more info they have the more they can back up their decision one way or another. Give them nothing and they will give you nothing.

I gave the info I use to make my determination. Good luck.

[shark66]

Not all settlements are created equal, so to say...a lot of different things comes into play - just off the top of my head:

- The length of time before the property in question bounces back and stop being underwater.

- General desirability of the area where the house is located

- Expenses involved in actual foreclosure xx years from now...and I'm certain there's a lot more...

Having said, I'd do my own math before doing anything else, but as close as I could from their standpoint...and then start formulating a proposal.

Finally, in all honesty, I wouldn't be providing them with any financial info. If they really need to find something out in order to close the deal, let them do the legwork...there's nothing you can possibly gain from giving them access to the data of that nature...

My $0.02 only...

Good luck.

[2manybills]

You have to understand what the status quo is. They are currently expecting payments to continue as scheduled. They want to see why they should settle now rather than stick it out. You dont send in the documents, they arent going to change anything. Why should they settle now? If you want to keep the house and you are paying on the first why would they take pennies on the dollar? This is their mode of thought and they are open to hearing your reason as to why.

Pretty basically what the guy at WF told me is that they think there is $40K "positive equity" in our home, i.e., that's a $160K loss for them. So the offer of settlement has to be somewhere around there. I didn't get the impression from this guy that he is trying to play hardball or trying not to help, really kind of the opposite. But they also have to be able to document their file.

[Brazzy]

I can see no purpose in sending them anything. It should be a business decision to them, either they want to settle or they don't. Your current financial situation should have no bearing. I have read several people on this forum say that they have been asked for financial info, but the only benefit I can see is for them to decide you have the means to keep making payments or more likely they may hold out for a larger settlement. I can't see where it would benefit you at all. You have already been discharged from the debt. Why would you have to "qualify" in order to settle.

I would send in the settlement offer and just ignore the request for financial info.

You have to understand what the status quo is. They are currently expecting payments to continue as scheduled. They want to see why they should settle now rather than stick it out. You dont send in the documents, they arent going to change anything. Why should they settle now? If you want to keep the house and you are paying on the first why would they take pennies on the dollar? This is their mode of thought and they are open to hearing your reason as to why.

[BCA2009]

I am in a similar situation.
Current with 1st, haven't paid 2nd with Wells Fargo in over 12 months.
BK7 filed 8/08
Did you submit any income, asset info with your settlement offer?
Thanks for any help

I can see no purpose in sending them anything. It should be a business decision to them, either they want to settle or they don't. Your current financial situation should have no bearing. I have read several people on this forum say that they have been asked for financial info, but the only benefit I can see is for them to decide you have the means to keep making payments or more likely they may hold out for a larger settlement. I can't see where it would benefit you at all. You have already been discharged from the debt. Why would you have to "qualify" in order to settle.

I would send in the settlement offer and just ignore the request for financial info.

[2manybills]

I am in a similar situation.
Current with 1st, haven't paid 2nd with Wells Fargo in over 12 months.
BK7 filed 8/08
Did you submit any income, asset info with your settlement offer?
Thanks for any help

They have not asked for anything like that. They aren't doing a loan mod.