Another 2nd mortgage settlement question (DCU)

[WanabeFree]

Yes they are. Your not obligated to pay anything, but in order to retain a piece of collateral you need to pay as agreed per the contract that does include interest and fees.

As for charge offs. Per the OCC the charge off is determined by the willingness to pay and by the recoup of the loan. An unsecured loan or credit card will be charged off upon receipt of a CH7 filing due to the obvious unwillingness to pay and unlikely recoup of any kind. For cars it usually takes place at 120 DPD. This is typically right after securing the unit. Ideally the unit is secured prior to charge off and they can gauge what the recoup will be and be able to charge off only the amount that will be left over after the sale of the asset. With a home its a bit different. An analysis is done at 80 DPD. Foreclosure usually starts at 120 DPD. By the time 180 DPD rolls around it will be determined whether or not the home will be foreclosed on. If it is not going to be foreclosed on the balance will be charged off. If it is worth foreclosure it will go to foreclosure and they will gauge what the deficiency balance is for charge off. Secured loans are not charged off immediately because there is still collateral to be dealt.

Charged off 2nd are far easier to negotiate than 2nds that are not charged off.

One more thing too because tax info was mentioned. When a loan is charged off any recoup on the loan is applied to the principal only until the principal is PIF. This reduces the amount of the charge off and it does help the debtor pay it off faster. However, tax write offs only come from interest paid, not interest accrued. So if you make payments on a charged off loan you will not be paying the interest, and you will not get a tax write off until the principal is PIF.

Brazzy,

Can you expound on this.

if I am reading your post correctly, you say that once a mortgage is charged off any future payments are applied to the principal only. I am assuming this only applies to loans discharged in BK. So if say 5 yrs down the road you decide to sell a home that now has equity the seller would only have to pay the principal discharged amount to get the lien released. Sort of like a zero interest loan with a balloon payment? sounds like a good plan for some if the bank just sits back and waits patiently.

[Brazzy]

Brazzy,

Can you expound on this.

if I am reading your post correctly, you say that once a mortgage is charged off any future payments are applied to the principal only. I am assuming this only applies to loans discharged in BK. So if say 5 yrs down the road you decide to sell a home that now has equity the seller would only have to pay the principal discharged amount to get the lien released. Sort of like a zero interest loan with a balloon payment? sounds like a good plan for some if the bank just sits back and waits patiently.

The principal is paid FIRST. It will still accrue simple interest. If you decide to try to make monthly payments it goes towards the principal first until it is paid in full then it will paid down the interest accrued until it is paid in full and then it will pay any fees accrued during the life of the loan. After charge off there are no late fees, but it does accrue interest. Basically the point I was trying to make was that making monthly pmts on a charged off loan gets you no love tax wise. Its not just BK loans, its ANY charged off loan.

[lisamomof4]

we discharged our ch7 on 7/09 did not re-afirm with 1st or 2nd. just signed docs moding 1st w/BofA. while doing that deal it was discovered that 2nd w/GMAC had been discharged. we received no notice of this and had not received any kind of contact with them since 9/09. we were given 2 #'s for 'recovery' but have yet to contact them. am hoping to reach a settlement but don't have any $$ for that right now so going with the 'let sleeping dogs lie' aproach. online appraisals show house underwater 50-60k. 2nd is for 48k so no equity. any advise about the best way to aproach them? what are the odds of GMAC working with us?

[Brazzy]

I think there is a confusion here. Discharged and charged off are not the same thing. If the loan is not reaffirmed it is then considered discharged. The charge off wont come until the account is seriously past due. At that point you would be dealing with either bankruptcy reps from the creditor or some sort of recovery dept. You can call them and talk to them. Because of the BK they will treat you with kid gloves, but when it comes to the actual business they wont be so friendly. Thats just because if you modded the first and are current, there really is no leverage for you to negotiate the second in full. It would have to be a good portion of the balance. However, they would be happy to set you up on some sort of payment plan.

[Overmylimit]

Thats just because if you modded the first and are current, there really is no leverage for you to negotiate the second in full. It would have to be a good portion of the balance. However, they would be happy to set you up on some sort of payment plan.

So my 1st is modded and current and I didn't reaffirm with them, the 2nd is charged off and discharged also. I haven't heard a word from them in months. I haven't paid the 2nd in well over a year.

1st balance 635k
2nd 185k

Value 375k......

So I'm thinking they will negotiate with me because the value here won't be going up for years, this was ground zero when the market 1st fell.

They had told me pre filing that they would take 35k...I said I would wait it out..and now its 8 months later and now I am discharged and closed.

[albacore44]

So my 1st is modded and current and I didn't reaffirm with them, the 2nd is charged off and discharged also. I haven't heard a word from them in months. I haven't paid the 2nd in well over a year.

1st balance 635k
2nd 185k

Value 375k......

So I'm thinking they will negotiate with me because the value here won't be going up for years, this was ground zero when the market 1st fell.

They had told me pre filing that they would take 35k...I said I would wait it out..and now its 8 months later and now I am discharged and closed.

Who is your 2nd with ?? I'm just curious

[Overmylimit]

Its with Specialized Loan Servicing SLS. Its kind of funny once I knew I was going to sit on this and I was going to file I just stopped payments cold turkey. They used to call trying to threaten me saying they would 100% for sure foreclose on me, I told them they wouldn't and they would argue on the phone saying they would...so finally I said I call your bluff bring it...I haven't heard a word since

[Whittier]

MrsDixon any updates on yout settlement offer?

[MrsDixon]

MrsDixon any updates on yout settlement offer?

Funny you should ask. DCU just emailed me yesterday and said that they were staying firm on their response. They would "possibly" settle for 30%.

I'm not going to contact them anymore and maybe in a year or two they'll change their mind.

[pcn]

MrsDixon, Have they tried any pressure tactics, like a Notice of Intent to Accelerate? Or, has there been nothing from them since the discharge? I ask becasue we planning on negotiating with BOA, and just got a Notice of Intent to Accelerate. Wondering if that is signaling they are seriouosly considering foreclosure, or if its just part of the process. Thanks!

[freeme0215]

Not paying first mortgage or HELOC (Wells Fargo)

Hello,

New to the boards and about to enter into the realm of the BK world.

I filed 6-23-10
341 scheduled for 7-27-10

Condo: 1st mortgage owed 198,000(Citi), HELOC (wells fargo)87,000
Appraisal of condo is: 170,000

I was divorced in 2008.

I am in a scenario that might be unique, I am not sure.

I have not paid the 1st mortgage since Feb 2010, I have not paid the HELOC since Nov 2009.

We did a refinance of the 1st mortgage in 2003, where a previous HELOC was paid off when we did the refi. I was NEVER told that the HELOC was going to be closed. I thought it was open(and it was) and I did not use it for 2 years.

I had a check card that was attached to the HELOC.

I have been told by my attorney that the HELOC company is asking for a move to the 1st mortgage position.

They base their reasoning on a "mistake" by our title company at the time of our refinance in 2003. They are saying that it was the duty of the title company to notify the HELOC that there was a refi and then Wells Fago would have then CLOSED the HELOC.

Wells is saying that this failure of notice and I again having to use the line of credit(that should have been closed) after ) was devasted by Hurricane Wilma in 2005.

Can a second mortgage eliminate the 1st mortgage on this scenario of a title company not notifying the HELOC of the refinance? If this is so, what happens to the 1st mortgage does it go away? Does what I owe on the condo become the amount of the HELOC only?? It does not sound right

HELOC has started foreclosure, 1st has not....

I was also told there would be a specail hearing called 'full evidentary hearing with testimony" and I may have to be there. Anyone know what this hearing will be about? It is scheduled on the day I was given for my "completion date on the BK"

Thanks again

[aandjw]

another SLS 2nd - time to stop paying.....

Its with Specialized Loan Servicing SLS. Its kind of funny once I knew I was going to sit on this and I was going to file I just stopped payments cold turkey. They used to call trying to threaten me saying they would 100% for sure foreclose on me, I told them they wouldn't and they would argue on the phone saying they would...so finally I said I call your bluff bring it...I haven't heard a word since

Yes - SLS holds my 2nd (first is $520K, 2nd $120K, value $370K). I received our CH. 7 discharge notice today (from attorney). Gonna stop paying on 2nd (trying mod on first now)....We'll see when I hear from SLS......

jack

[Camaro305]

Ch7 discharged July 2009, have 1st (BoA) and 2nd (WF) did not reaffirm. Owe 121k on 1st, 64k on 2nd. The house is worth approximately 170k. We are current on 1st. For the 2nd, we have been making partial payments when we can. When I call 2nd to make payments, they say our loan is in "non-performing" status. Our goal is to keep the house. Any ideas what "non-performing" means? Any advice what we can do to maybe eliminate or reduce the 2nd?

I called them just now, and asked about foreclosure. He said their most recent equity valuation turned up no equity, but they run them all of the time, and if they discover equity, they can start foreclosure?

[yomann]

It's been almost a year since our BK7 was discharged; both 1st & 2nd included.
The 1st with WFB was modified to an acceptabe payment and is current.
The 2nd with PNC was charged off prior to BK7, then trasferred to SLS for servicing.

We get monthly "informational only" statements from WFB and pay on time.
Have had no contact at all from the 2nd;nor have we called them, lying low for the time being.

At some point we would like to get a lien release from the 2nd, so it's not hanging over us when we do decide to sell and move on.

My question is : Is one year enuf time to have waited before calling the 2nd on settlement talks on lien release ? (have not made a payment in almost 2 years)

Certainly do not want to sound anxious, as we are not ........

What would you do in similar circumstances ?

[albacore44]

settle for less than the entire balance