I would greatly appreciate any advice on our situation. Any feedback you can offer is very much appreciated. Thanks so much!!
We purchased our home in 2006 in California. We did an 80/10/10. Our first is a 7-year ARM through Wells Fargo at 6.375% (820k loan amount) and our second is a 30/15 through Chase (principal and interest) for 120k. We got both loans at the same time we purchased our home and we have never refinanced.
Our home value has dropped a lot. We're lucky if this home is worth 725k right now given the amount of foreclosures in our area. We don't want to walk away. We want to stay in this home.
We stopped paying our 2nd mortgage in July. It's been 6 months since we made a payment on the second. Chase keeps calling us and leaving messages. Chase sent us a certified letter about 3 months ago saying that if we didn't contact them within 30 days that the amount would become payable in full. We ignored this letter.
This evening, we got a call from the "Recovery" department at Chase. We didn't answer the phone and haven't answered the phone or returned their calls all these months.
Thankfully, aside from these 2 mortgages, we don't have any debt (no credit card debt or car loans). When I wasn't bringing in income, we asked Chase to work with us on a modification, but they took a long time to get back to us and when they finally contacted us to start talking about it, we decided not to go through with it and then I was bringing in income. Since the values have fallen a lot in our area, we want to get rid of this second, but don't want to file for bankruptcy.
We are current on our 1st mortgage through Wells Fargo, but really want to get rid of this 2nd.
Sorry for so many questions... I am wondering...
1. Is it better to work directly with Chase to settle for less than the amount owed or to work with the collections agency?
2. Has anyone had any luck working directly with Chase to get rid of their 2nd for less than 10%?
3. Should we just let this loan get charged off and let it go to collections?
4. If we can't negotiate with collections, can they come after us? What happens if we don't settle and don't pay collections or Chase?
5. What are Chase's options in terms of collecting from us?
6. Will this affect our credit score the same as a foreclosure would?