Success Stories in Settling 2nds

**TomEason** · 05-05-2011, 11:08 PM

I'm starting this thread at the suggestion of cahomeowner, who thought it might be helpful to those members who don't have the time to read through pages and pages of comments in search of a success story.

If you're curious which strategies have worked, and what the circumstances were for those individuals, you will likely gain value from this thread.

I've read on these boards settlement success at prices ranging from as low as 2 percent of the balance (unusually low) to about 40 percent of the balance (very high). Typical settlement prices seem to be running in the range of 5-10 percent of the loan's balance.

The challenge is those posts are spread out among many different forums and threads.

Hopefully this thread will help consolidate those stories, and will thereby facilitate a member's personal choice of his/her own negotiation path.

**readytogoaz** · 05-06-2011, 12:14 AM

Tom....I'll add mine.

I did "walk" from my home, and I was happy to go, so mine was more of a strategic foreclosure. I had a first of about $135k and a second of just under $55k. I stopped paying on my first (Wells Fargo/Fannie Mae) in August 2010, and my second (GMAC) in November.

I waited to stop paying on the 2nd because I was still researching at the time what my consequences might be and was still a bit unsure. I also had this idea that maybe if I was at or close to foreclosure (initiated by Wells) when GMAC was close to charging off my 2nd, that they might be more likely to want to settle since they would be pretty certain that they would be stripped of their lien.

I'm in AZ and the 2nd was probably recourse but it was a bit of a gray area, which is why I was a bit nervous as I did/do not have the funds to pay it off.

About 3 months after I stopped paying Wells, GMAC sent me an unsolicited modification letter (to reduce the interest rate) which I ignored, because foreclosure was about 2 weeks away. After foreclosure, GMAC then sent me an unsolicited offer to settle for about $4200, or about 8% of my balance. My mother was willing to provide these funds and I sent them off. The deal was "full and final satisfaction" of my obligation.

I don't know if waiting to stop paying helped; from what I've read on here, GMAC seems to have seen common sense and figured out that settling how they will lessen their losses most, without all of the angst of lawsuits.

Hope that helps others! Best of luck.

**Spectrum** · 05-06-2011, 09:22 AM

Hi tomreason, good idea for the thread. I did a stratigic default with 1st and 2nd in California. !st was non recourse, 2nd recourse as was refinanced. Stopped payment in May 2010 for both 1st and 2nd, Aurora was servicer for 1st on a Fannie Mae loan (actually a MERS mess, but that is for a different thread) of approx $197k and Chase had 2nd with a balance of $112k when I started. I took the route of calling and faxing in a settlement offer about three months after stopping payment. I also ended up sending a C&D as the calls got to be silly. Eventually this charged off at appox 150 days (bit earlier than expected, but OK). The original dept that had the late was not really useful and a waste of time to deal with (this is the group that does short sales, approves settlement, but only if large percentage of balance with all financials, etc). This first dept insisted Chase would never settle without financials, and the lowest they would ever go was 40 percent of the balance. Well that got them nowhere.
After the loan was charged off it went to the "recovery" dept where things got more traction, but initially still wanted 30 percent to settle and all financials. I was offerering about 10 percent. Eventually as the house got close to FC I upped my offer to 17 percent, with a simple one page offer faxed to the dept. Again told it would never happen, but as the sale date for down to the last week I was called and asked if I could make good on the payment withing 3 days they could accept. Well I could not pull the money that fast so we agreed to a first payment of about 5K done with electonic check, with the balance due in 2 weeks (this gave me time to pull money). This was contigent upon them sending we a written offer with the terms agreed upon per my settlement. Took them 24 hours to get the settlement agreement faxed to me, and it did not contain the wording that I wanted as "paid in full", but instead "settled in full for less than full amount". After a couple of back and forth conversations I decided that was good enough for my needs as I was also settling a couple of CC so the credit report was a secondary consideration. I was a little nervous about the electronic check (where you give them routing info and they pull from your account) however since I had a written agreement (versus offer, be sure you know the difference) if they played any games on the account it would federal wire fraud on Chase, not something any company is going to do.
Made the two payments as agreed, account was closed with agreed upon verbage on the credit report, and a release of lein was recoreded with the County Clerk about 3 months later. For me it was about 17% of a final total of $118k (proprty was worth down to $175k at this point). All in all I was very happy to put the whole thing behind me. Hope this helps others.

**whypay** · 05-06-2011, 09:37 AM

tomeason,

Thanks for all you do mate, let's see the success stories accumulate!

**TomEason** · 05-06-2011, 10:31 AM

Originally Posted by whypay

tomeason,

Thanks for all you do mate, let's see the success stories accumulate!

Hi whypay. Thanks for your rhyming comment!

**cahomeowner** · 05-07-2011, 07:54 AM

Tom I was unable to figure out how to PM you directly so I apologize in advance for posting here.

First I would like to thank you for setting up this thread. I think it will be extremely beneficial and a huge time saver if we can have 1 place to list just the success stories. As you can see your original thread is quite popular and new folks would be wading through pages and pages just to find info that would be helpful and most importantly applicable to their situation.

Now having said that I will say in order for this thread to be successful (just my 2 cents) you will need to remind posters from time to time to just keep this thread about success stories(along with specifics of their financial data, lender, investor, interest rates, how far behind, etc) and not get into a separate discussion or banter which defeats the purpose.

here is a similar thread I created for NACA success stories so you can see how I managed it.
http://www.loansafe.org/forum/naca-g...lp-others.html

* NACA works it just doesn't work for everyone. I tried to compile the info so people could see what was working which really came down to certain lenders/investors participated in NACA's 2% permanent loan modification while others followed the HAMP program.

Also when you find someone who has success settling their 2nds in other threads, I would encourage you to invite them to post their success stories here (this is what worked for me on my thread) I know folks can get a little touchy and may feel like your hijacking their threads but the intent is truly to help and organize information for the benefit of all. These forums have been extremely helpful but no one has hours and hours to weed through all the pages and pages of discussions. I like to see what IS working and what the circumstances were that led to that success. Every situation is different and therefore the results are going to differ. Any chance you can make this a sticky?

Keep up the Great Work It is very much appreciated!!!

**TomEason** · 05-07-2011, 10:28 AM

Originally Posted by cahomeowner

Tom I was unable to figure out how to PM you directly so I apologize in advance for posting here.

First I would like to thank you for setting up this thread. I think it will be extremely beneficial and a huge time saver if we can have 1 place to list just the success stories. As you can see your original thread is quite popular and new folks would be wading through pages and pages just to find info that would be helpful and most importantly applicable to their situation.

Now having said that I will say in order for this thread to be successful (just my 2 cents) you will need to remind posters from time to time to just keep this thread about success stories(along with specifics of their financial data, lender, investor, interest rates, how far behind, etc) and not get into a separate discussion or banter which defeats the purpose.

here is a similar thread I created for NACA success stories so you can see how I managed it.
http://www.loansafe.org/forum/naca-g...lp-others.html

* NACA works it just doesn't work for everyone. I tried to compile the info so people could see what was working which really came down to certain lenders/investors participated in NACA's 2% permanent loan modification while others followed the HAMP program.

Also when you find someone who has success settling their 2nds in other threads, I would encourage you to invite them to post their success stories here (this is what worked for me on my thread) I know folks can get a little touchy and may feel like your hijacking their threads but the intent is truly to help and organize information for the benefit of all. These forums have been extremely helpful but no one has hours and hours to weed through all the pages and pages of discussions. I like to see what IS working and what the circumstances were that led to that success. Every situation is different and therefore the results are going to differ. Any chance you can make this a sticky?

Keep up the Great Work It is very much appreciated!!!

cahomeowner
Thanks for your comments. FYI, Moe had to turn off PM capability for everyone several months ago, due to security concerns and the required heavier filtering. Although I personally do not have the capability to make this a sticky, I will request that Moe make it one. And you are certainly welcome to assist me in reminding visitors at other applicable threads of this threads existence, and in inviting successful settlement posters to re-post their stories here. Thanks again.

**TomEason** · 05-09-2011, 09:27 PM

readytogoaz
Thanks so much for posting your success story. As I understand it, your actual settlement with GMAC was after the foreclosure. Hence, you decided to settle with a "sold out junior," not a secured 2nd lender. While I'm sure you had your reasons for doing so, settling with a sold out junior lender after a FC when the property is gone is much different and much easier than settling with a secured lender. I don't mean to question your decision, but I want to make it clear to other readers that I would personally never consider settling with a sold out junior, and do not recommend it.

**TomEason** · 05-09-2011, 09:41 PM

Spectrum
Thanks so much for posting your success story. Can you clarify something for me and other forum members? Do you still own the property or did Aurora foreclose and you no longer own the home? The reason I ask is that the goal of settling a secured 2nd is to having the 2nd lien extinguished and to retain ownership of the property. However, if the 1st forecloses and wipes out the 2nd, it is no longer a 2nd, but is now an unsecured sold out junior loan. Settling with a secured 2nd is a more challenging proposition than settling with the owner of a sold out junior debt. In fact, I recommend a debtor never settle with a sold out junior lender. There is no reason to do so, and as of this date, I've seen no evidence of any sold out junior lender in any state sue a borrower, even though they may not be legally barred from doing so.

**readytogoaz** · 05-10-2011, 09:51 AM

Originally Posted by tomeason

readytogoaz
Thanks so much for posting your success story. As I understand it, your actual settlement with GMAC was after the foreclosure. Hence, you decided to settle with a "sold out junior," not a secured 2nd lender. While I'm sure you had your reasons for doing so, settling with a sold out junior lender after a FC when the property is gone is much different and much easier than settling with a secured lender. I don't mean to question your decision, but I want to make it clear to other readers that I would personally never consider settling with a sold out junior, and do not recommend it.

I shouldn't think you would question my decision as you complimented it in another thread of mine where there is more background data

**TomEason** · 05-10-2011, 10:06 AM

Originally Posted by readytogoaz

I shouldn't think you would question my decision as you complimented it in another thread of mine where there is more background data

readytogoaz
Thanks for your post. I complimented your having settled on the other thread because you chose the path that was right for you, and you accomplished your goal. Every borrower should make the decision for which path to follow. I personally would have chosen a different path according to my own situation and personal attitude. That difference wouldn't make me any more correct or right than you. I started and titled this thread for those who have success stories in settling 2nds; I wasn't picking on you, but wanted to point out to readers the difference. Please don't take offense as none was meant.

**readytogoaz** · 05-10-2011, 10:51 AM

Originally Posted by tomeason

readytogoaz
Thanks for your post. I complimented your having settled on the other thread because you chose the path that was right for you, and you accomplished your goal. Every borrower should make the decision for which path to follow. I personally would have chosen a different path according to my own situation and personal attitude. That difference wouldn't make me any more correct or right than you. I started and titled this thread for those who have success stories in settling 2nds; I wasn't picking on you, but wanted to point out to readers the difference. Please don't take offense as none was meant.

No offense taken, hence the smiley face in my previous post. Since my mother was willing to pay the 8% settlement, and it would completely finish this process (as opposed to not being 100% sure it was ended for the next 6 years, which is the statute of limitations in AZ), it was a good option for me. Your advice is always greatly appreciated!

**TomEason** · 05-10-2011, 10:57 AM

Originally Posted by readytogoaz

No offense taken, hence the smiley face in my previous post. Since my mother was willing to pay the 8% settlement, and it would completely finish this process (as opposed to not being 100% sure it was ended for the next 6 years, which is the statute of limitations in AZ), it was a good option for me. Your advice is always greatly appreciated!

readytogoaz
Thanks for that! BTW, your smiley face isn't visible in what I can see in your post.

**readytogoaz** · 05-13-2011, 10:42 AM

Tom...do you use firefox? I find that emoticons are only visible in ie explorer. Or maybe you're on a mac

**leftcoastadv** · 05-13-2011, 10:45 AM

Smilies are not visible on Google Chrome either.

**TomEason** · 05-13-2011, 03:28 PM

Originally Posted by readytogoaz

Tom...do you use firefox? I find that emoticons are only visible in ie explorer. Or maybe you're on a mac

readytogoaz
Yes, I use Firefox - so that's why. Thanks.

**TomEason** · 05-15-2011, 01:19 PM

FYI, I've started a new thread entitled "Sold Out Junior Loans" in order to address the occasional confusion between a 2nd and a sold out junior. The thread is here. Sold Out Junior Loans

**flatlander** · 06-10-2011, 01:29 PM

TomEason suggested that I tell my success story so here goes . My original thread is here. I stopped paying my HELOC at the same time as my first. I was able to get a HAMP mod on the first by hiring a very good lawyer out of Oxnard CA. Anyways the HELOC went to two different collection agencies. I found a template for a very strong counter offer on the web and customised it to my situation. Any time they sent me a nasty letter I sent my counter offer back in their envelope 10% was it bottom line. I also got rid of my land line so they couldn't call and harass me anymore. They finally came back with 30% and I just sent back my 10% counter again. Out of the blue yesterday FedEx shows up with a letter from CHASE stating "You have been approved for the full extinguishment of your second lien home equity loan under the HAMP program. This means that all amounts owed on your loan including the full outstanding principal balance interest fees and other charges will be forgiven.You will no longer have to pay these amounts" My jaw hit the floor! I faxed my lawyer a copy and he says its legit and that I am a very lucky man and this is very rare. Good luck to everyone else and just don't pay then a penny and be stuborn till they cave in. Itworked for me!By the way it was all purchase money none of it went in my pocket.

**TomEason** · 06-10-2011, 01:50 PM

flatlander
Thanks for posting your great success story here; I appreciate it!

**JonSK** · 06-10-2011, 02:18 PM

Originally Posted by flatlander

TomEason suggested that I tell my success story so here goes . My original thread is here. I stopped paying my HELOC at the same time as my first. I was able to get a HAMP mod on the first by hiring a very good lawyer out of Oxnard CA. Anyways the HELOC went to two different collection agencies. I found a template for a very strong counter offer on the web and customised it to my situation. Any time they sent me a nasty letter I sent my counter offer back in their envelope 10% was it bottom line. I also got rid of my land line so they couldn't call and harass me anymore. They finally came back with 30% and I just sent back my 10% counter again. Out of the blue yesterday FedEx shows up with a letter from CHASE stating "You have been approved for the full extinguishment of your second lien home equity loan under the HAMP program. This means that all amounts owed on your loan including the full outstanding principal balance interest fees and other charges will be forgiven.You will no longer have to pay these amounts" My jaw hit the floor! I faxed my lawyer a copy and he says its legit and that I am a very lucky man and this is very rare. Good luck to everyone else and just don't pay then a penny and be stuborn till they cave in. Itworked for me!By the way it was all purchase money none of it went in my pocket.

CONGRATS!!!
Where can I find a copy of that counteroffer template?

**Casper** · 06-11-2011, 07:33 AM

X2 & 3 & 4

Beautiful

**Boogey** · 06-15-2011, 01:51 PM

Hello Tom,

Thank you for all of your time on this site! I have decided to walk statring this June. I have a 1st and 2nd about $14,000 was taken out on the 2nd to lower some unsecured debt 3 years ago. It as a piggy/back loan to begin with. My home is valued at $201,000 (Zillow) I owe $304,000 My first is on a 3/ARM. I purchased the home before I was married, my wife is not on the loan or title at all. My concern is once the home is foreclosed upon the 2nd may come after me for $74,000. I am ready for that if and when that comes. I want to make sure I am protecting my wife in all this. She is our get out of jail card with her good credit and income. I am scared that there could be some way the 2nd could loop her into this. I live in Washington State and we are a Community Property State. We have even discussed that we may need to get a divorce to protect ourselves? We would rather not do this if we do not have to. I feel really bad about this decision to walk becuase like most of the other people on this site we pay our bills. This is the best long term financial solution that I have. I know all kinds of people are looking for advise during these difficult times with mortgages. Thank you for what you are doing!!!

**TomEason** · 06-15-2011, 02:57 PM

Boogey
Thanks for your post. Please know that this thread was created to allow members to post their success stories in settling. Since that is obviously not your case, I recommend you visit this thread and read the strategy syllabus at the thread-starter post. That will answer some of your questions. You might also want to re-post your situation there.Since I don't know WA law, I recommend you consult with a lawyer there. Good luck!

**hooter** · 06-15-2011, 03:31 PM

Tom,

Your insights are the best I've seen and this is my first post on any forum hoping to get your suggestions. Thanks in advance!

I had an investment property in Florida that has been sold through auction. The auction happened more than 2 years ago. The property had a 2nd mortgage and was sold/transferred to Real time resolutions. RTR calls and sends letters every month or so requesting settlement. I have ignored them. My dilemma is that I am now attempting to VA Refinance my primary residence but this 2nd is still showing up on my credit report as unpaid and the underwriter won't approve the refi.
Please advise.

**TomEason** · 06-15-2011, 03:45 PM

hooter
Welcome to the forum, and thanks for your post and your kind remark. FYI, this thread was created so members could post their settlement success stories.

If I understand you correctly, your RTR 2nd is now a sold out junior. So, you might visit the SOJL thread and re-post. www.loansafe.org/forum/debt-settlement/40758-sold-out-junior-loans.html

The derog report from the default on that loan can remain on your credit file for up to 7.5 years from "date of first delinquency" per the FCRA. So you can count the years from the date of your 1st missed payment on that loan. I know of no way, short of settling with RTR with a condition being their agreement to report differently, to resolve this. But you can always try by writing a threatening letter to RTR, making up some kind of story. Who knows - it might just slip through and work.

**whiteface** · 07-08-2011, 10:54 AM

I never imagined that I would be posting a success story and want to encourage others to remain strong, FIGHT FOR YOUR HOME, and keep good documentation. I was blessed to have my 2nd successfully negotiated by a very dear friend who is a real estate agent. He did not charge me a dime. I went to a foreclosure attorney who offered me NO guarantee but his fee was $10,000. Trust me when I say this, you are your best defense. I am single and self employed so I did have the deck stacked against me.

My first (which I am six month's behind first is with BOA at 425K second was with Greentree at 245K) is under consideration for HAMP. Home value approx. 525. Judging from the news of the horrible BOA stories I am confident that they are going to want to settle as all my paperwork is in order, numbers are at the magic 31 percent; and I have full documentation to backup hardship, etc. I am one of those who took cash advances from my BOA credit card to pay BOA, so I am still in debt and will be for a long time, BUT my 2nd which was with Greentree is settled. My second was 245K and I settled for 10 percent.

I feel that this is just the tip of the iceberg and many more will be settled. There is just too much real estate out there and if all the banks had for sale signs on their bank owned properties the streets would be lined up with foreclosed homes. The market is flooded with these home and the banks recognize they need to keep people in their homes not keep taking them away. I am a success story and will help anyone I can because living in fear for the last year is something I would never wish on anyone. This was the most horrible thing I have ever gone through.

Please keep positive, pray a lot and keep good notes. Don't give up...help is there!

**TomEason** · 07-08-2011, 12:12 PM

whiteface

Congratulations on your settlement! And thanks for sharing your success story here. Your persistence and tenacity ultimately paid off. If I understand your numbers, you now have about $100k in equity! Your close real estate agent friend definitely deserves kudos for having negotiated this settlement for you.

Please correct me if I'm mistaken, but to summarize, you settled with Greentree, your 2nd lender, for 10 percent of the loan balance. Thanks again for posting.

**HopingtoFind** · 07-08-2011, 01:29 PM

Originally Posted by whiteface

I never imagined that I would be posting a success story and want to encourage others to remain strong, FIGHT FOR YOUR HOME, and keep good documentation. I was blessed to have my 2nd successfully negotiated by a very dear friend who is a real estate agent. He did not charge me a dime. I went to a foreclosure attorney who offered me NO guarantee but his fee was $10,000. Trust me when I say this, you are your best defense. I am single and self employed so I did have the deck stacked against me.

My first (which I am six month's behind first is with BOA at 425K second was with Greentree at 245K) is under consideration for HAMP. Home value approx. 525. Judging from the news of the horrible BOA stories I am confident that they are going to want to settle as all my paperwork is in order, numbers are at the magic 31 percent; and I have full documentation to backup hardship, etc. I am one of those who took cash advances from my BOA credit card to pay BOA, so I am still in debt and will be for a long time, BUT my 2nd which was with Greentree is settled. My second was 245K and I settled for 10 percent.

I feel that this is just the tip of the iceberg and many more will be settled. There is just too much real estate out there and if all the banks had for sale signs on their bank owned properties the streets would be lined up with foreclosed homes. The market is flooded with these home and the banks recognize they need to keep people in their homes not keep taking them away. I am a success story and will help anyone I can because living in fear for the last year is something I would never wish on anyone. This was the most horrible thing I have ever gone through.

Please keep positive, pray a lot and keep good notes. Don't give up...help is there!

Congratulations, that sounds great! Did you have to provide any of your financial info before they agreed to settle? When did your agent start negotiations.... like if you could describe the time line, when you defaulted, when the negotiations started, how long it took, etc.

**whiteface** · 07-08-2011, 01:58 PM

Originally Posted by HopingtoFind

Congratulations, that sounds great! Did you have to provide any of your financial info before they agreed to settle? When did your agent start negotiations.... like if you could describe the time line, when you defaulted, when the negotiations started, how long it took, etc.

Yes I provided them P&L, bank statements and anything else they requested. I know I am very very lucky it only took my real estate friend four months after I stopped paying to settle my second and am still working on my first. I have been at this over a year, and feel so blessed that this nightmare is over. Trust me when I say, prior to that for 8 months I wrote the President, Attorney General, several letters to CEO at BOA and Real Estate Commissioners office. I now am just hoping and praying BOA will modify my first and this nightmare is finally over.

**laststraw** · 07-08-2011, 06:06 PM

I had a first mortgage of $262,000 and a 2nd of $64,000 on a house in Florida--a recourse state. The second was with Citimortgage. Unknown to me, Citi had insured my 2nd (essentially betting against me, even though they'd been my lender on a previous house for more than 10 years and I had always paid on time).

After several months, the insurance company sent my $64,000 2nd to a collection agency. I talked with the agent, who was actually a decent guy for a debt collector. He suggested that I send them a letter with an offer and proof that I had the funds. I offered them $4,500, thinking it was a starting point for negotiations, and to my surprise they took it. Even with the 2nd settled the house was still $100,000 underwater, but settling the second made it much easier to short sell the house.

I did not have to provide financials, just proof that I had the $4,500. I then hired a lawyer to review the paperwork to ensure it was legit and was a final settlement of the debt.

Don't give up. I thought my 3-year nightmare would never end but it finally did. It is possible to settle a 2nd.

**stillhere** · 07-08-2011, 06:43 PM

First post, so upfront apology for poor use of terminology. Just missed (7/1) first payments on both 1st and 2nd with WF, both recourse (refi's). Depending on appraisal, it's in the 9's to 1M, 825K on first, 460K on 2nd, both I/O - both have been sold to investors, don't know whom. Hoping to miss 2 months on the first and do loan mod. - aiming for 4K/mo., PITI. Hoping to miss up to 6 months on HELOC and attempt a "buyout" for 100K or less. Thoughts on the feasibility of this scenario? TomEason, any comments, as you seem to be pretty well versed in this area, specifically in SFBA. What shall I watch out for, where are the major traps? Thanks in advance, I'm learning......

**HopingtoFind** · 07-08-2011, 09:51 PM

Originally Posted by stillhere

First post, so upfront apology for poor use of terminology. Just missed (7/1) first payments on both 1st and 2nd with WF, both recourse (refi's). Depending on appraisal, it's in the 9's to 1M, 825K on first, 460K on 2nd, both I/O - both have been sold to investors, don't know whom. Hoping to miss 2 months on the first and do loan mod. - aiming for 4K/mo., PITI. Hoping to miss up to 6 months on HELOC and attempt a "buyout" for 100K or less. Thoughts on the feasibility of this scenario? TomEason, any comments, as you seem to be pretty well versed in this area, specifically in SFBA. What shall I watch out for, where are the major traps? Thanks in advance, I'm learning......

Welcome, and I would recommend posing under:

Strategy for Settling Your 2nd

This thread is for those who already successfully settled.

**TomEason** · 07-08-2011, 10:06 PM

laststraw

Thanks for sharing your success story. Yes, I can understand your surprise that Citi accepted your first offer! You were able to achieve a settlement for about 7 percent of the loan balance. Not bad at all!

**TomEason** · 07-08-2011, 10:17 PM

stillhere

Welcome to LoanSafe and thanks for posting. As HopingtoFind suggests, you might visit that thread and read post #1, which is a settlement guide. Post any future questions about settling on that thread.

FYI, a settlement with a 2nd lender will take a mininum of six months after missing payments. However, most take much longer. The key is to be very patient, and to abstain from behaving in a matter that would signify an urgency to settle.

Since your 2nd is largely underwater, you have no risk that WF will FC. Be patient and bide your time. Don't communicate with WF at all; ignore their collection calls and don't return messages, and don't communicate by mail. Essentially, refuse to acknowledge their existence. WF owns a loan that is close to worthless, and they can do nothing about it except wait. You have them over a barrel. Good luck!

**bubberrand** · 07-10-2011, 07:32 PM

laststraw,

Congrats on the settlement. I hope I'm there someday. Did the lender say anything about sending you/the IRS a 1099?

**TomEason** · 07-10-2011, 07:37 PM

bubberrand

FYI, lenders are required by the IRS to mail 1098s and 1099s to the IRS and the borrower no later than the end of February, in this case 2012 for TY 2011.

**bubberrand** · 07-10-2011, 08:43 PM

Tom,

Thanks for the info. I'm just curious from the success stories, I haven't heard anyone say they got a 1099 after their settlement. If it is a recourse 2nd, it doesn't appear to fall under the Mortgage Forgiveness Debt Relief Act. A fat forgiven debt added onto a person's income via a 1099 would seem to take some of the joy out of a settlement. Si, no?

**TomEason** · 07-10-2011, 09:10 PM

bubberand

We're all unfortunately obligated to pay income taxes. Way too much discussion on 1099s occurs on LoanSafe. A taxpayer should never rely on tax advice rendered here. It's recommended that a member get advice from their tax person, as that tax person has knowledge of the member's overall situation.

Receiving a 1099 is no big deal and not worth a member posting that they've received one. Any 1099s received thus far on settlements will of course by for those settlements finalized in TY 2010 or earlier.

**jenam** · 07-10-2011, 10:44 PM

hello, i finalized a chapter 7 bk in feb. 2007. Our 1st and second are with B of A, we received final mod. on 1st in June 2011. Want to settle second, but they said to get a settlement i still had to go through the same process as the modification. After reading forum I assume this is false, is it? Just got a Dodd-Frank letter to sign, if i do will it automatically reaffirm anything? Do you have to sign one to be offered a deal? They call twice a day to collect, when I called to ask how this was possilble do to bk she said that didn't matter anymore and they could keep calling and report to credit agencies? Not sure what to do, any help?

**TomEason** · 07-11-2011, 12:17 AM

jenam

Thanks for your post. FYI, this thread is dedicated to those who have success stories in settling their 2nds. Please refrain from asking your questions here. Thanks.