Lawyer said possible to acheive "paid in full" status w/DIL - ?

[spj3210]

Could that be right? I finally talked to an attorney today who sounded really knowledgeable, able to help where we actually need help, etc. He was highly rec'd by the real estate agent who may be handling a short sale - or attempt at a short sale - for us. We set up a time to meet later this week for a free consultation type meeting, and on the phone w/him today I was describing our situation and talked about how really what we want is a DIL, but he was saying since it has to be listed first for 90 days for them to consider a DIL, that we might as well try the short sale first and after 90 days then go for DIL if that is what we decide.

Anyway what intrigued me was that he said in some cases, if the homeowner can offer some cash, the bank can report the deal as "paid in full" on your credit report. Not settled or settled for less than owed, but "paid in full." I've never ever heard of this and I've been reading like crazy on DILs. I asked like how much $ we're talking and he said often somewhere in the range of like 10 percent of the deficient amount. Has anyone heard of anything like that? I know/thought banks are required by law to report certain things a certian way, like in the case of foreclosures, but I really don't know. Any idea what he might be referring to or if this is possible? Something anyone here has tried?


Also I told him how we're in the process of trying to settle our 20 percent loan w/GMAC so that any short sale process could be easier, and so that a DIL would be possible if that's the route we chose (my understanding is there must not be any second lien holder for a DIL). Anyway he said no, don't settle that one, that it can be done as part of one whole deal at the same time, they shouldn't be handled separately, etc. Partly b/c the first lender won't want to see you handing money to the junior lien holder since they should be first priority (but I'm confused - they are first priority, they get the house, second might otherwise get nothing). And he said in case of short sale, the first can offer money to the second, and let them take care of that. That was a surprise - thought it'd be a good thing to get that second loan out of the way asap.


Obviously we'll discuss it all further when we meet but any thoughts on all this in the meantime? Thanks!

[CWMATT]

I am (hopefully) at the end of my DIL process. I had the attorney for the bank send me a copy of the release of mortgage that they are filing with the county this week. My mortgage was for $375,000 and it says that it was paid in full.

When this is totally resolved and everything is filed with the county, I will pull my credit to see what that tradeline says.

[spj3210]

Wow, CWMATT, that is interesting huh? Did you end up paying any cash to make the DIL happen if I may ask?

[CWMATT]

We agreed on a settlement to be paid over 2 years. They originally wanted a lot more than what we settled on. I was surprised, since they had all of my financials, that they would ask for any kind of settlement. Can't get blood from a stone kinda thing, but they said that since I was paying all my other creditors and had a credit rating of 640 that I should pay them. I had to laugh since I had NO other creditors I was paying. The only debt I had was the mortgage which I told them but since you are dealing with a glorified telemarketer and not the person who has the ability to make decisions, it falls on deaf ears.

When I said I couldn't afford their original amount, they asked what I think I could afford and before I could answer, he wanted to be sure that I knew that upper management would not accept 'nothing' as an amount and the DIL would be dead.

[spj3210]

Gosh, what a headache! I'm glad it sounds like you're about done w/the process though.

[CWMATT]

Thanks.

According to the attorney yesterday, it is done and over with, they even congratulated me on the lender paying off the lein.

It has been almost 10 months so I am going to hold off with my official celebration until I see the recorded Release of Lein online at my County Records office. Hopefully sometime next week.

Just for giggles I had the attorney send me a copy of what they are recording, it is comforting to read paid in full over and over again.