National City Heloc Settlement Advice

[Finally at peace in CA]

Hello everyone,

I bought my house in March 2005 for $629K with an 80/20 loan split.

The first is a 10/1 Interest-only ARM with Wells Fargo for $504K.

The second was a HELOC with National City for $125K.

In March of 2006 I paid off the second. At that time I also asked National City to increase my line of credit. They agreed and closed my first line of credit and gave me a new one in the amount of $225K. We currently have a balance of $15K on the line of credit.

I live in the greater Sacramento area where house prices have plummeted. The current value of my house is now between $350-$400K. Our income is about 50% of what it was when I originally purchased the house. We have exhausted our savings trying to stay current on the mortgages but have finally come to the decision that we need try for a Loan Mod from Wells Fargo or walk. I've had the initial discussion with Wells and have started the process but we're not optimistic. We basically need Wells to slash our payment by 50% in order to make it viable for us to stay. I don't think that is likely so we are preparing ourselves for foreclosure.

I made my last payment to Wells in January 09, so I am now 2 months late. I have been keeping up with my payments on the Heloc to National City but I would like to negotiate a settlement with them. My question is how should I go about this? Should I stop making payments first and then contact them? What is realistic as far as a settlement? 10%? Any advice would be greatly appreciated. I want to walk away from this house clean without any other debt following us around. We just want a fresh start.

Thanks in advance!

[The Professor]

Sorry but I need some clarification. Is the current unpaid balance on your HELOC (now a LOC) only $15K?

Daniel

[Finally at peace in CA]

Yes, it's only 15K.

[Finally at peace in CA]

Hi Prof Shays! Would love to get your advice on how best to approach the LOC I have with Nat City.

Thanks!
Cathy

[The Professor]

It is a challenge to effectively phrase a response, frankly because with what people who frequent this forum are often facing (a financial meltdown in many instances that will force them into filing bankruptcy), I view $15K as an insignificant problem. Your home is underwater and you can expect your first lender to foreclose non-judically, which effectively means that you walk away from that debt without liability based upon the fact that it is a purchase money loan and even if it wasn't, the lender following the path of non-judicial foreclosure would give the same result.

That leaves a $15K outstanding unsecured obligation. I'd schedule and make regular monthly payments to retire the debt.

Daniel

[Finally at peace in CA]

Daniel, thank you for your response.

~Cathy

[dg008]

Fianally at peace, that's a good question. I have a HELOC with National City, live in the same area. I submitted my package to them, I am waiting a response. I'd be curious to know your outcome. Did you offer the 10%?

[Finally at peace in CA]

Hi dg008,

I read in some other threads National City won't really entertain any offers until you are delinquent. So I'm going to contact them next month after I miss my first payment. This should coincide with Wells filling a notice of default on the property. I'm two months late with them now. I've sent them my package and I'm awaiting a negotiator to be assigned. In the meantime they've sent me a notice to accelerate the mortgage. They've been really on top of things so I have no doubt that they will file the NOD next month.

With National City, my plan is to offer them 10%. I'll post my progress here on this thread for you and anyone else that may find it helpful.

Have you had a response with National City? Are you late or current with them?

Cathy

[dg008]

I haven't heard anything back, Finally at Peace, not even a received your packet. It's been a week! Update me please on what they say and I will do the same...fingers crossed...I heard a lot of good things that I hope work out for us....I am current but I can be late any day now.

At work I ran into a man that bought the house right across the street from him for $250K less than he bought it. They've got to be doing something major to minimize complete loss.....I hope!

[markmc2000]

Once the first lender forcloses maybe you can call the second, or they will probably call you at which point maybe you can tell them you are broke except for maybe a couple thousand? Either that, or try and do a short sale in the mean time which will let the realtor work out a deal. I'm in the same boat and my strategy is to do a short sale as a first plan. Second order will be to stay in communication in a polite manner and let them know I rally don't have any money, but am doing my best to resolve the issue. And third, hopefully they will make an offer for much less after foreclosure to settle instead of court where outcome may result in bankruptcy.

Good luck! and keep us posted.

[Finally at peace in CA]

dg008,

I sent my package to Wells via certified mail and it was delivered on 4/20. I called them on 4/20 to confirm that they'd received it. They said it could take a couple days to get it entered so call back in a few. I called again on 4/24 and still no record. They said if I faxed it it would be entered withing 48 hours. Good to know, would have been more useful the week before. Anyway, I faxed in on Sunday and called them today. They've received both now and I'm now waiting to get a negotiator assigned. They told me to call frequently to check progress. I think that is the route to go so I'm going to call them every week to track progress. If it seems like things are not moving along I will call the executive number provided by *** on other threads.

Mark, thanks for your suggestions. I plan to Nat City next month after my first missed payment and gauge their willingness to work with me at that point. Do you know if you agree to do a short sale with your lender, do they hold off on the foreclosure process or proceed while the house is on the market?

[ldelrosa]

Hi, my 2nd was with NC for 96k. Before the house was fc'd, we negotiated to pay 13% (they looked at our remaining assets and figured we could pay). Accdg to NC they will only accept 20% once it gets discharged. At least now we wont have to worry about it. hope this helps.

[markmc2000]

Hi finally,

Each lender I think operates differently. I have been told on the phone by one lender that they will somtimes delay if they get a hardship letter from you and are considering a short sale. However, I have no idea how long. I think the lender would definitely delay if you have an offer for them to review. I think they still may drag their feet, but it is in their best interest to consider an offer on the table rather than the hassles of forclosing. I know I have an offer on the table with countrywide and they are jerking me around by not loggin in my deal, and saying the have orderd a BPO when they have not. I would consider a really agressvie price on the short sale. I had my place priced at market value and no traffic. I have dropped it another 15%. I want to get an offer to work with and get the ball rolling, I don't really care if the banks get $50k or $$75k. I just want to get this monkey off my back...

[tc4gold]

Hi,
I am trying to work with national city now, I have a large 2nd, am current on my first. Property is worth about 300k less than what is owed. I am unemployed but have other rental property and I am behind on 3 other mortgages and about to be on another. Late on 4 credit cards too all due to non payment by tenants, former buyers and losing jobs. National city don't beleive I am behind on all those as my credit report they say only shows 2 mtgs 30 days late. THey asked me to find someone to see if they would settle the debt for me but the offer had to be for at least 10% of the loan all the while pressuring me for a payment saying they could work better with me if i was caught up. I said if I could afford to pay the mortgage I wouldn't be asking for help. I got a friend who had some money and would offer them the 10%, he faxed an offer but they refused to answer him. Now they transfer me to some other account rep and they say they will only accept 90% of the debt which is ridiculous. What can anyone suggest I do now?

[dg008]

just wanted to give you an update Finally in Peace...NC called and said they need additional information. I am a little late with them but not 30 days. They have been really helpful so far said I should have something resolved in less than 30days....we will see. Anywho, I am waiting for a negotiator also. I will forward you their name hopefully to speed up your process, if they respond before yours do. I am calling them tomorrow. Not sure what to expect.

As far as Wells, I heard they started a new program for loan mods....some new things coming down the wire from now till June (I have an inside track) I'm not sure about the number *** gave, I haven't read any other threads but let me know if it works. I'm sure I can help out with that.

[tc4gold]

HI,

They told me that too but then pressured me for a payment saying that they could do more if I wasn't late. I am now in the next phase they say with another account rep starting again. THey will not speak with me if I have a tape recorder to record the conversation and insist that all their settlements are at 90% which is a big fat lie. Let me know if you get somewhere. Wells Fargo is being bad too, they keep saying my phone numbers are disconected which is not true, they are the same one's I have always had but I cannot get the to understand this. I am trying a supervisor tomorrow.

[dg008]

tc4gold....you never want to let them know that you are recording. Try repeating back their phase, "this call is being monitored for quality services" that might not alarm them...most call centers are told to disconnect if someone is recording...try a different approach. They are risking a lot by saying a blanket statement of 90%. The 2nd is not primary so does not have a strong berring on what takes place. At wells someone probably notes # disconnected so they didn't have to call.. try going inside and speaking with a consultant....see what happens when you put in on their plate. Just ask that they put your current number in the notes so this mix up wont happen again.

I will post if I get good news from them :_)

[Moe Bedard]

If you are recording phone convesations.............make sure that you first check your state laws................in some states it is illegal to record a phone conversation without the consent of all parties.
"Can We Tape?"

[tc4gold]

Thanks, I am now repeating back to them that this call is being recorded for quality control purposes and so far they haven't caught on or said anything. I request everything i writing and was advised by bank of amercia who worked with me on my settlement to just submit the same settlement offer once a month saying this is all I have. She says the longer it goes the more likely they are to settle. Trying to hang in there but not having much luck and getting frustrated.

[Finally at peace in CA]

Thanks for the update dg008. I think I am going to call National City tomorrow to begin the discussion. I'm still current but considering Wells Fargo will likely file the Notice of Default next week that should lend some urgency to the conversation. I'll update on how that goes.

I'm actually pretty suprised so far at the pace things are moving with Wells Fargo. They received my package early last week and had assigned a negotiator by the end of the week. My status is they are reviewing options available to me and they should get back to me within 30 days. I plan to call twice a week to follow up. Hopefully I won't hit a brick wall. If I do I will use the Exec number provided by ***, but as long as things are progressing I won't pull it out of the arsenal. I am feeling cautiously optimistic. I would love to hear anything you know about what they are rolling out.

For anyone interested, Wells Fargo has a website where you can check the status of your Loan Mod: www.wellsfargo.com/assist. It just gives very high level info but it's something. And you don't get harrassed for a payment. :-)

[Finally at peace in CA]

Here's an update:

1st Mortgage:

Wells Fargo filed the Notice of Default on June 24th. The grace period ends Sept 24th so I anticipate an auction sale date to be set late Sept/early Oct. We plan to stay and hopefully negotiate a Cash for Keys deal. I also don't feel comfortable leaving the house vacant so I want to stay until they take it over.

2 HELOC:

I sent a Settlement Offer package to National City on July 6th. I offered 10% of our balance. Last week they denied the offer and suggested we do a short sale. Considering the property is worth at least 25% less than I owe, not sure how that would help. But we're past that point anyway. So we're going to wait for the foreclosure to go through and resubmit our settlement offer. We'll see what happens.

Hope everyone else is having more success.

C~

[tc4gold]

Please don't give up, I managed to get my Heloc with National City settled for 20%, keep persevering, keep sending in an offer in writing and stating it is all you can afford, cite the comps in the neighborhood. Without mentioning my name, try to get hold of Scott Walker Account Specialist negotiator, he was at least pleasant and easy to deal with unlike all the others previously. 866-622-2657 x 63492. After they did an appriasal they came back to me with 30% and thanks to the person who was paying this debt for me we came back at 20% and they accepted. I was lucky because now I can at least pay my friend back over the next 10 years. It is a releif to have that taken care of. Then you can move onto Wells Fargo. I am now going to work on getting my first into a fixed rate now.

Let us know what happens. Good luck

[Walker12]

HI TC..if you don't mind me asking..what was the outstanding balance on your 2nd with Nat City?
Did you have to show them bank stmets, paystubs to prove you didn't have the $??

[tc4gold]

Hi,

Sorry, I didn't notice this reply until today. My outstanding balance with NC was $347k. I had to show them bank statements earlier in the game and they showed I didn't have but a pittance left over each month. They are looking at what goes in and what goes out. I had a couple of large deposits they asked about which I could correctly tell them were personal loans from a friend that were keeping me afloat to pay for food, gas, utilities etc.

If you are worried about that< I suggest you keep cash on hand not in the bank.

I am still not out of the woods as I am working on the rental properties which are going under. I will be glad when all this is over, I have been adding up what tenants owe me for back rent and damages plus some business loans, so far tenants owe me 68k and still counting, business deals $400k I would be fine if everyone had paid me. Lesson learned, go to work for the government and collect a steady paycheck with benefits.