Strategy for settling 2nd HELOAN w/Chase

[opensource]

I'm so thankful for these forums! After many months, our 1st mort was finally modified (WF) in house. We have a 2nd HELOAN (not HELOC) with Chase, completely under water. I've read the other posts regarding how to settle them but still have questions. I'll start with the basics:

State: NC
1st Mort - $365k (WF in house mod 5/12)
2nd Mort - HELOAN $38k Chase
Home Value - approx $340k

2nd HELOAN was to pay off cc debts, they paid them off directly, no funds given to us directly. Currently behind by 1/2 a payment. 2nd is in my husbands name only. Do I follow the same strategies posted as if this was a HELOC? Not sure how to proceed...just ignore & attempt to settle? Thanks so much.

[TomEason]

opensource

Thanks for your post. No matter what it's called, if that loan is a secured 2nd loan, the strategy is the same.

You might visit this thread and read the strategy guide at post #1. Good settling!

Strategy for Settling Your 2nd

[opensource]

Ok great to know Tom, thanks so much! Will revisit & hope to be posting in the successful thread at some point.

[Evan Bedard]

Ok great to know Tom, thanks so much! Will revisit & hope to be posting in the successful thread at some point.

I would definitely follow the strategy as Tom has mentioned and you should have a very good chance settling your underwater HELOC. Please keep us posted on your progress!

[opensource]

Thank you Evan! Will do!

[trixi]

Hi Opensource
this is trixi I was talking with you in another thread about fannie maie mod not sure if you remember me. Did you do your final mod through fannie mae? And do you mind sharing your terms? We got a final mod through our servicer for fannie and the terms were great... but they just changed them they found an error and the payment went up by 450.00 we were so disappointed. Any advice would be great
thanks,
trixi

[Evan Bedard]

Hi Opensource
this is trixi I was talking with you in another thread about fannie maie mod not sure if you remember me. Did you do your final mod through fannie mae? And do you mind sharing your terms? We got a final mod through our servicer for fannie and the terms were great... but they just changed them they found an error and the payment went up by 450.00 we were so disappointed. Any advice would be great
thanks,
trixi

Hello Trixi,

How did the servicer change your terms and what mistakes were made? Do you happen to have a copy of the permanent mod agreement you received?

[opensource]

Hi Trixi, yes I remember you! What happened with your mod that they claim a mistake was made? Our terms were settled at it now being a 40 yr, payment (w/taxes) dropped about $3xx.xx. Our mort is still more than the house is worth & I'm not thrilled with having to go 40 yrs. Ultimately, this was better than nothing. During the trial, they claimed an escrow shortage of like 42.xx and when the final paperwork came in, it was more like 27xx.xx. I'm disappointed in the whole process, glad it's over though. A simple rate reduction would have been sufficient almost 2 years ago instead of going through all of this.

Hope you get everything rectified, if you signed a perm mod, can they now change it? (assuming you signed). Keep us up to date!

[Evan Bedard]

Congrats on the modification opensource! If you signed a permanent mod agreement they should not void the offer, but unfortunately sometimes they do make mistakes and there is no laws that force lenders to offer modifications..

[opensource]

Thanks so much Evan! I wouldn't have kept my sanity without these forums and all the great knowledge shared here. So thank you again!!

[trixi]

yes I did sign the papers but i also signed a paper stating if there are any mistakes they have the right to change the mod... well they did and I am so disappointed. Our new payment is still less but the other payment was amazing! To good to be true...Good luck I will keep you informed when this is all done.

[Evan Bedard]

yes I did sign the papers but i also signed a paper stating if there are any mistakes they have the right to change the mod... well they did and I am so disappointed. Our new payment is still less but the other payment was amazing! To good to be true...Good luck I will keep you informed when this is all done.

That is something new I haven't really heard before.. I guess since so many mistakes were being made on permanent mods in the past they are having borrowers sign an agreement allowing them to change the terms if inaccuracies were found..

[opensource]

Not much of an update but I've noticed the phone calls from Chase haven't been as frequent as I expected. Usually they'd call a few times a day if we were late (even before 30 days late). Not sure if it's because they know we modified our first. Anyway today I got one of those yellow telewires from them. Secretly wishing it was a settlement offer but it was one of those 'extension of past due amount is available' valid for next 10 days. Hopefully this is the path to a settlement offer. I'll ignore it and see what happens.

[opensource]

Today we received an 'Acceleration Warning - Notice of Intent to Foreclose). That was prompt considering last payment made was May 24th. It's kind of nerve wracking to 'play the game' so to speak even though there's no way they can foreclose with the first being modded and under water to boot. We haven't had any contact with them, not sure what to do. Just wait for the phone calls? They've pretty much stopped.

[TomEason]

opensource

Thanks for your post.

I wouldn't recommend answering any phone calls from the 2nd lender. If your numbers are correct, as you know that loan is way underwater and won't FC. It's highly probable that Acceleration Warning letter is an attempt to intimidate you into paying something.

[opensource]

Thanks Tom, I had a feeling that's what it is. I keep hoping for that yellow offer letter! We'll see...thanks again for the support.

[snowrunner]

Open source-- I received the same acceleration warning from chase a couple months after I stopped paying. It is nerve wracking , but just stick with the strategy and make no contact with them. I just settled after 14 months and only made contact this month after an offer was sent via mail.

[opensource]

Thanks snowrunner, congrats on your settlement! Will hopefully be back with the same news.

[opensource]

Just adding an update...today I received an unsolicited perm modification packet that basically reduces the principal about 50%, waives late fees, reduces interest and a new monthly payment about 1/2 of what I was paying. Have until the end of the month to sign and return. We haven't communicated whatsoever with them. Did receive a few phone calls but never spoke to anyone. I think this is the hardest part, doing nothing and just waiting it out. But so far it seems to be in our favor.

Recent sales in our neighborhood are still selling low & we're still underwater. So, do I respond to this, ignore, or counter? Thanks!

[TomEason]

opensource

Thanks for your post.

If it were me, I'd ignore the offer and not communicate with Chase.

Settling a 2nd is always a better deal than a mod (unless it happens to be a full extinguishment mod, which this isn't).

[opensource]

Thanks Tom, I knew you would suggest that Question for you...would Chase fully extinguish a 2nd without going through 2MP? I suppose they'd have no financial incentive to do that. Our 1st couldn't be HAMP'd because we refinanced so we fell outside the date requirement. Chase knows we modified the first...this may be silly to ask, but would they look to see if it was a HAMP before offering a full extinguishment? We'll hold out for the settlement but a slight chance for getting rid of this completely would be nice (albeit unrealistic).

[TomEason]

Thanks Tom, I knew you would suggest that Question for you...would Chase fully extinguish a 2nd without going through 2MP? I suppose they'd have no financial incentive to do that. Our 1st couldn't be HAMP'd because we refinanced so we fell outside the date requirement. Chase knows we modified the first...this may be silly to ask, but would they look to see if it was a HAMP before offering a full extinguishment? We'll hold out for the settlement but a slight chance for getting rid of this completely would be nice (albeit unrealistic).

I suggest you proceed as if you won't be offered a full extinguishment mod on your 2nd, as they are rare.

Sorry but I don't know the answer to your question

would they look to see if it was a HAMP before offering a full extinguishment?

[opensource]

Gotcha, thanks as always Tom. Much appreciated.

[opensource]

Just adding in an update....we haven't paid nor spoken to Chase in quite some time. We did receive a settlement offer which would have been half of what was owed, new payment terms, etc. We didn't reply to that offer. Perhaps we should have but my gut was not to bother. Now it's apparently charged off. We're still very much under water on the first so it's status quo as of right now.

[opensource]

We've had a lot of attempted communication lately from Chase. We've ignored the calls and UPS letter deliveries offering to help. Today we got a very tempting one though which was to settle, the lump sum amount comes to about 15% of what we owe. Our house is still underwater though. I admit it's very tempting though part of me would like to wait and see if they offer a full extinguishment. We have until the end of February to decide.

[TomEason]

We've had a lot of attempted communication lately from Chase. We've ignored the calls and UPS letter deliveries offering to help. Today we got a very tempting one though which was to settle, the lump sum amount comes to about 15% of what we owe. Our house is still underwater though. I admit it's very tempting though part of me would like to wait and see if they offer a full extinguishment. We have until the end of February to decide.

Thanks for the update. I recommend you NOT accept that offer; Chase can and will go lower. I recommend you counter (by mail) with a price that's affordable and which is below your target price. If I were you, I wouldn't wait till the end of February; I'd mail the counteroffer now.

[opensource]

Thanks Tom, as always, I agree with you. I'll post an update when I have one. So thankful for these forums and your guidance Tom!

[Bnewman]

Thanks Tom, as always, I agree with you. I'll post an update when I have one. So thankful for these forums and your guidance Tom!

I'm going through the same thing with Chase right now, but they have hired LCS as a debt collector. I have received the standard 25% offer from chase but nothing more. What address did you send the offer to?

Thanks,

[TomEason]

I'm going through the same thing with Chase right now, but they have hired LCS as a debt collector. I have received the standard 25% offer from chase but nothing more. What address did you send the offer to? Thanks,

Thanks for your post. I recommend you not worry about which address. In my experience, if sent to any of Chase's addresses, the letter will get forwarded to the right place and department.

[opensource]

Update: Chase sent our account to LCS who keeps calling. Today we received a settlement offer of 50%. We're obviously not accepting that offer. Should we treat this the same way we've been (i.e. ignoring) and wait for it to hopefully go back to Chase? Or counter w/LCS? I'm inclined to let it go back to Chase though I suppose there's no guarantee that'll happen.

[Ready2Run]

My HELCO never got to a CA but my plan was to send the CA a S&D letter stating I would only discuss the account with the original creditor.

I have no idea if this would have worked or not, but the was the plan until they forgave it.

[TomEason]

Update: Chase sent our account to LCS who keeps calling. Today we received a settlement offer of 50%. We're obviously not accepting that offer. Should we treat this the same way we've been (i.e. ignoring) and wait for it to hopefully go back to Chase? Or counter w/LCS? I'm inclined to let it go back to Chase though I suppose there's no guarantee that'll happen.

Thanks for your post. FWIW here's my opinion. If LCS sent you a written offer, I'ld counter the offer in writing at a price below your goal price. They most likely won't accept it, but you never know. They may counter your counter at a price that will make negotiation worthwhile, i.e. a price that's way less than their first offer. LCS will, of course, consult with Chase, but who cares?

[opensource]

My HELCO never got to a CA but my plan was to send the CA a S&D letter stating I would only discuss the account with the original creditor.

I have no idea if this would have worked or not, but the was the plan until they forgave it.

I just read about your extinguishment, congrats!! Honestly, a forgiveness is what I'm hoping for (I guess aren't we all) but not sure how realistic that is. I'm in no rush to settle since I'm under anyway and I'm not moving any time soon. I have concerns about dealing with them since they're not the original creditor too, hence not the lien holder. Don't know if they can play the game of 'we'll settle but not releasing the lien'.

[opensource]

Thanks for your post. FWIW here's my opinion. If LCS sent you a written offer, I'ld counter the offer in writing at a price below your goal price. They most likely won't accept it, but you never know. They may counter your counter at a price that will make negotiation worthwhile, i.e. a price that's way less than their first offer. LCS will, of course, consult with Chase, but who cares?

Thanks as always Tom! My only concern with dealing with LCS is them not being the lienholder. They're under no obligation to release it, right? Or do they have to because it's associated with the debt?

[TomEason]

Thanks as always Tom! My only concern with dealing with LCS is them not being the lienholder. They're under no obligation to release it, right? Or do they have to because it's associated with the debt?

Thanks for your question. LCS is a CA who Chase has contracted with to perform collection activities. Unless I'm mistaken, they haven't bought the debt; Chase is still the owner of the note and the lienholder. Therefore any settlement that's made will be between you and Chase. And Chase will instruct a title company or the trustee to reconvey the lien. Needless to say LCS will consult with Chase before arriving at a settlement because it'll be Chase who signs the settlement agreement.

[berks]

Hi Tom

I'm very new to this site, and I know you've helped so many people with feedback. Thank you for helping those of us who are stressed, struggling and in need of info.

Before posting my question, I want to make sure I'm posting in the correct area.

Where should I post my question and story about my 2nd Charge off with Wells?

Thank you
Berk

[TomEason]

Hi Tom I'm very new to this site, and I know you've helped so many people with feedback. Thank you for helping those of us who are stressed, struggling and in need of info. Before posting my question, I want to make sure I'm posting in the correct area. Where should I post my question and story about my 2nd Charge off with Wells? Thank you Berk

Thanks for your post and for your kind remarks. Welcome to the community. You could either use the search tool to see if an appropriate thread exists, and/or start your own thread. If your WF 2nd is underwater, WF won't FC. I recommend you seek to eventually settle by following the guide at post #1 of the following thread. Good luck to you. Strategy for Settling Your 2nd

[berks]

Thanks for your post and for your kind remarks. Welcome to the community. You could either use the search tool to see if an appropriate thread exists, and/or start your own thread. If your WF 2nd is underwater, WF won't FC. I recommend you seek to eventually settle by following the guide at post #1 of the following thread. Good luck to you. Strategy for Settling Your 2nd

I've read the strategy for settling your 2nd, extremely informative! That's how I found you.

My charge off with WF happened about 5 years ago and 4 collectors have had it. I could never afford to pay a lump sum I was offered ($14,000 by the last CA), but I think I'll be able to in the very near future, maybe as much as $10,000 of the $50,000 debt...., however, it was just sent to a new company "partners for payment relief" and I feel like they might try to foreclose since there is some equity in my property now.

Zillow estimates my property at $300,000, the first with WF is $235,000, the second is $50,000 and there's a $20,000 tax lien..... it's been a rough 5 years, but I feel I can finally get back on track. (Last year the 1st went into foreclosure, I was able to cure the debt and keep my home, I've been here for 10 years)

I wanted to know if you thought the new collection company would try and foreclose, or if they can?

Can I offer WF 10% of the $50,000 and settle the debt, or should I wait to see if the new CA tries to foreclose?

I'm so close, but so stressed!

Thank you for your feedback, I really appreciate it!

Berk

[TomEason]

Thanks for your post. A CA can't foreclose unless the oufit owns the loan. BTW your 2nd is still underwater and the lender won't FC. To the balance of your 2nd you should add about $50K, (the national average cost to resell an REO property}. If it were me, I'd wait for the lender to make an offer, then I 'd counter at a price below my target number. I wouldn't communicate with the lender unless and until they make an offer. I suggest you get a more accurate valuation. Zillow valuations use an AVM service. I recommend you get CMA from a local RE agent who farms your neighborhood. A CMA views the interior of the property and coompares your property with similar recent comps. It's probable that value appreciation will be flat in the near future in most markets.

[TomEason]

Please view this updated post. A CA can't foreclose unless the oufit owns the loan. BTW your 2nd is still underwater and the lender won't FC. To the balance of your 2nd you should add about $50 K(national average costs to resell REO properties}. If it were me, I'd wait for the lender to make an offer, then I 'd counter at a price below my target number. I wouldn't communicate with the lender unless and until they make an offer. In the meantime I suggest you get a more accurate valuation. Zillow valuations are based on an AVM model, and Zillow has no idea about the condition of the property's interior. I recommend you get CMA from a local RE agent who farms your neighborhood. The agent performing the CMA will view the interior of your property and coompare it with similar recent comps. It's probable that value appreciation will be flat in the near future in most markets. However if your market's forecast is for fast appreciation, I recommend you stay on top of the market. When it becomes evident that your property's valuation will put you at risk of FC, you might take a more aggressive stance in settling. When your property's value puts your "2nd in-the-money" you will have lost your leverage in settling. When that occurs you'll need to take a more proactive stance in settling with your lender. You might visit the following thread for more info. Settling with "in the money" 2nds