Did not re-affirm 2nd in chapter 7

[badabing]

Let me first say the info on this is amazing. Thank You All!

We had Chapter 7 last year due to our business failing. We reaffirmed our 1st mortgage $320K with Chase but not our 2nd $85K with Wells Fargo. Our home was purchase for $425K in 05 and is worth about $370K today. The 2nd mortgage payment has become a real burden and we are upside down in the property.

I know we have no personal liability for the 2nd to W F if we walk away, but they have to convince Chase in the 1st position to agree as I understand things. With this being the case, do you think W F will forgiive a significant portion?

[Moe Bedard]

Sorry the thread was missed and we did not get back to you sooner and thanks for sharing your story that is all too common.

I have worked with many lenders and servicers on seconds and yes, they are more than willing to work with a borrower on their loan than a first in most cases. I have has principles cut in half and rates as low as 3% on a second to keep the homeowner in the home and so they do not lose it all if they get foreclosed on.

However, Wells Fargo is one of the WORST to deal with in loss mitigation. They play hardball a lot.

But, it is NOT impossible. So, I say go for it and be ready for the good fight. This is the art of negotiation and you need top be ready and with Loan Safes help, you will.

[badabing]

So where do I begin?

[badabing]

Moe - Here is some additional information to consider. My wife is the only borrower on the 1st w\Chase and 2nd w\ Wells. Her income is is $52K and the first is $2400 and 2nd is $640, which after tax, doesn't cover it. Whe she got the mortgages, her income was much higher and we did stated income on the loans.

I believe that since it was not reafirmed, the house is not worth what we paid, and I assume her income only would be considered since I was never on the note, this should put her in a good position.

My income goes to car payments, food, gas,college tuition, etc.. etc... So we live payceck to paycheck barely getting by.

Does this info help at all? Do we just contact them and initiate the proccess even if we're not behind on payment?

[Moe Bedard]

You need to start by contacting the Loss Mitigation Dept. of Wells Fargo.........
You need to put together a hardship letter explaining the reason you are not able to afford the mortgage.......(there are examples in the Homeowner Tool Box to the left of the forum)

When they do a modification they will ask for the total household income versus the total household expense and you would need to have a surplus of around $100-$250 left at the end of the month......

Wells Fargo Loss Mitigation:
1-866-261-5642
1-800-416-1472

Hope this helps get you started.......
Keep us updated on your progress......

[badabing]

After 2 months we finally spoke to someone at WF, only after I emaild the Vice President. We sent a hardship letter that was reviewed and this is what they said.

We have a Home Equity Loan and not a 2nd mortgage (what's the difference?) and since we filed bankruptcy, it is their policy not to make modifications unil it is gone. (I assume from our credit report).

Does this make any sense?????????????

[Moe Bedard]

A second is a mortgage used to purchase the house and a home equity loan is a credit line using the house as collateral...............

[badabing]

None the less it is a lean against the home. I believe we spoke to the wrong department anyway. I've been told by HOPE that unless we are behind on the payment that Wells Loss Midigation won't even speak with us and that the Mortgage bill Bush and Congress just signed isn't a good deal because if you sell your house within 5 years they take 50-100% of the profit. That's our goverment for you.

This logic makes no sense to me. I have a non-recourse loan that I am willing to convert to a recourse loan if they forgive half the debt. If I sell short, they will likely only get 40K of the 80K that I owe being in the 2nd position. If I let them foreclose, they have no recourse against me and after their cost will likely only get 20K.

Now I'm no economics major but I feel what we are trying to do is a win-win and they are total jerks. So insted of me trying my hardest to continue making the payment, I will now let it fall behind so I can get some attention.
If I don't get satisfaction, my plan is make it to next summer when the bankruptcy is 2 years old, buy basically the same home, in the same neighborhood for 100K less than I paid for this one and let Wells do whatever they want. My 1st is in good shape and I'll keep it that way so when Wells takes the home, my credit will not be affected at due to the fact we did not reaffirm and they can not put this on my credit report.

[beachymama]

When I stopped paying my 2nd, Chase Home Finance charged it off and sold it to a collection agency. I have yet to receive a call from a collections person. Chase just charged it off in June. They charged off approximately $150,000.

So now I have just the first with Indymac and I am trying to figure out if I should just rent the home out (and start paying the 1st again) or move back into it (just paying the 1st again) or just let it foreclose. I have not paid Indymac since December 2007. It is vacant, but I keep it up.

The lien is still there and I don't know how to get it off when I sell the home (or if I can sell it). I was trying to pursue a short sale when Chase just charged it off with no warning.

I doubt Wells will be able to foreclose in the 2nd position if there is nothing for them.

This is just what happened to me...