Great forums, appreciate all of the feedback. I am about to embark upon this process of settling my second mortgage. That said, I have wondered about the ability to negotiate the credit report feedback from GMAC.
It appears the standard reporting after settlements is "Paid in full - for less than the full amount". This is derogatory terminology, along with the barrage of missed payments affecting the credit history.
Is it possible, during the negotiation, to request the following :
1. Settlement of $X to cover current $Y HELOC. (The settlement)
2. Documented proof that they will remove the second lien from the primary mortgage.
3. Report the debt as PAID in full to credit, without reflecting that it wasn't the full amount OR upon payment of the settlement amount, GMAC will have all credit feedback withdrawn completely. (All historical missed payments and final debt settlement). Almost as if I never had a second HELOC.
I know this seems a little crazy, but post #1 makes it seem as if it's something possible. If I am going to significantly impact credit, I will likely pursue foreclosure. If I can take this route and have temporary credit impact, but have it removed immediately after settlement - I would be estatic. I haven't seen any questions or people that have proposed this question.
If someone with experience or knowledge in this area can respond, it would be appreciated.