Expertise needed on HELOC issue

[indefault]

Hi everybody would really appreciate some of your expert guidance on this one. I have a primary loan at 100K and had a heloc with my primary bank for 66k. For the past 2 years the heloc was autodrafted from my checking account with the same issuing bank. I won't go into long details, but I'm from RI and our economy is awful.

The heloc loan was amortized over 15 yrs. I called and asked if I could have the 2nd loan reammortized to a 30yr heloc to help off set my financial situation. This would have cut my payment from 600/mo to 300/mo. I was current at the time. I was told that I couldn't do it because I was current and the only available programs were for those who had defaulted. Two months had passed and for the first time in my life I overdrafted my account. Then it happened again and then again. I decided to stop the automatic withdrawal from my account so I went to the bank and signed the form. I also stopped paying my loan and wala, the remodification dept called me, said we could work something out and sent me a package. I filled out the information and sent it back with a great sense of relief. 3 days later I see the bank took it upon themselves to auto draft the $600 as soon as my direct deposit hit. I was livid that this happened. I called and said I thought we were going to work this out and to my surprise I went from working with them to a complete dirtbag, nonpaying criminal customer.

I called my primary lender who I have been current with all along to see if they could roll the heloc into my primary loan. I got quite the surprise when speaking to their loan modification dept. It was their opinion that since my home is now only comping in the 120k range than (1) they couldn't do it but (2) it was highly doubtful that the heloc bank would foreclose because they are in second position and would have to come up with 100k to foreclose only to lose 40k. Kinda made sense to me.

So based, on this how would you all recommend I proceed with the loan remod. Supposedly, I am going to receive something in 10days outlining what they are willing to do for me. Any input would be appreciated. THX

[Evan Bedard]

Hi indefault welcome and thank you for joining.

So based, on this how would you all recommend I proceed with the loan remod. Supposedly, I am going to receive something in 10days outlining what they are willing to do for me. Any input would be appreciated.

I have not really seen any HELOC loans get modified from a 15yr to a 30yr mortgage. You are better off requesting a lower interest rate on the loan maybe at a 1-2%. Also some lenders may even settle the loan with you for about 5-10% of what you owe. It is also unlikely for them to foreclose since the property in underwater and they will collect nothing from the proceeds..

By the way who are your lenders?

[indefault]

Hey Evan,

Thanks for your response. I am so in "ready to fight" mode. I was fully planning on going the route of settlement, however 5-10% of my total balance is something interesting. I was thinking of just being a jerk and hopefully settling at around 50% or 33k, but if you have heard of settles that were as low as 10% I'm ready to brawl for it. My primary is Indymac and the heloc is with sovereign the heloc was already at 2.49 so interest change wouldn't make a difference.

[Moe Bedard]

Yes, Evan is spot on.

The HELOC is down $ creek without a paddle.

They will either get nothing, sell your account to collection agency or settle at 5-20%. Depends on how good you are at poker and brawling till the end.

And I would go for the loan mod on the first but they most likely will do nothing until you are late. You can fight it out and we have seen a very few success stories, but in reality, not so much with Indymac.

[indefault]

Update
First, let me thank you guys for your support and knowledge.

Round 1 - Received the mailing from them. As you had already called it no modifications on Heloc's. They were willing to do interest only payments for 6 months and then resume full payment. Same day I got a call asking if I had recieved the mailing. I point blank told her that I am not paying one penny to them and that until they are willing to settle the debt for 3k (what I have in the bank) not to call me.

She threatened foreclosure, I responded I would love you to lose even more money so please do. She countered with your credit score is being severely impacted, I responded credit scores are only a number if you want to reduce me to a number then call me Mr. 3k cuz that's the only way your going to settle this debt.

Last resort she said they would file suit to garnish my wages. I said awesome I hate my job anyway and been looking for a reason to quit.

[Sacdude]

Originally Posted by indefault

Update
First, let me thank you guys for your support and knowledge.

Round 1 - Received the mailing from them. As you had already called it no modifications on Heloc's. They were willing to do interest only payments for 6 months and then resume full payment. Same day I got a call asking if I had recieved the mailing. I point blank told her that I am not paying one penny to them and that until they are willing to settle the debt for 3k (what I have in the bank) not to call me.

She threatened foreclosure, I responded I would love you to lose even more money so please do. She countered with your credit score is being severely impacted, I responded credit scores are only a number if you want to reduce me to a number then call me Mr. 3k cuz that's the only way your going to settle this debt.

Last resort she said they would file suit to garnish my wages. I said awesome I hate my job anyway and been looking for a reason to quit.

Good job! I have been doing the same. I stopped paying on my WF HELOC of 80K. They threatned me with all the same nonsense. I put a settlment offer in for 3k. The negotiator calls me with an offer of 50% or 40K. I just told her go ahead and foreclose or sue me if you want (mine is a purchase money HELOC). Now I am at about 6 months late.....this is the time when they start thinking about charging it off....and thats when you have the maximum leverage. I highly doubt that they will settle for 3K (they might be able to sell the account for more than that) so I raised my offer to 6k. This is the ceiling. I am waiting to see what they say. Hold your line till the end.....they will budge once they realize they have nothing to get out of you.

Good luck and keep us posted,

[Evan Bedard]

Indefault and sacdude,

Great job both of you! Stand your ground and do not give up this fight. They will realize soon how much they will be losing if they foreclose...

When you call in I suggest to request to speak with only managers/supervisors because they will be much more knowledgable..

[indefault]

Originally Posted by Sacdude

Good job! I have been doing the same. I stopped paying on my WF HELOC of 80K. They threatned me with all the same nonsense. I put a settlment offer in for 3k. The negotiator calls me with an offer of 50% or 40K. I just told her go ahead and foreclose or sue me if you want (mine is a purchase money HELOC). Now I am at about 6 months late.....this is the time when they start thinking about charging it off....and thats when you have the maximum leverage. I highly doubt that they will settle for 3K (they might be able to sell the account for more than that) so I raised my offer to 6k. This is the ceiling. I am waiting to see what they say. Hold your line till the end.....they will budge once they realize they have nothing to get out of you.

Good luck and keep us posted,

Hey Sac -- your a bit ahead of me. I'm only at the 2 month mark, but hey they are already down 50% for you. I think of our fellow member who had settled the 125k heloc for 15k.

I am focused on doing the same and don't plan on budging. I went from wanting to work something out to just being angry when they autodrafted that money from my account.

[indefault]

Originally Posted by Evan Bedard

Indefault and sacdude,

Great job both of you! Stand your ground and do not give up this fight. They will realize soon how much they will be losing if they foreclose...

When you call in I suggest to request to speak with only managers/supervisors because they will be much more knowledgable..

Thanks Evan -- Phone has been quiet last 2 days since that altercation. I say we pool all the successes on this forum and tour nationwide speaking at conventions

[Sacdude]

InDefault,

I just had a conversation with the specialist today over the HELOC. I am almost at 180.....kinda pushed it to see if they will settle. He was a very nice guy and he said he will put in the written request as I am asking the bank to essentially forgive 94% of the loan. Will keep you guys updated as to what happens. Also once I am through it, I will open up a new thread to describe what to expect during a loooooong windy road to heloc settlement. I am hoping my ordeal will come to end in a few weeks. Also my advice - be patient. Do not call them too often and let it run its course....that way you have the best chance to settle. Look at your tax issues with settling HELOC in your state. Consult a CPA and if its better to settle it next year tax wise than just sit tight.

[indefault]

Originally Posted by Sacdude

InDefault,

I just had a conversation with the specialist today over the HELOC. I am almost at 180.....kinda pushed it to see if they will settle. He was a very nice guy and he said he will put in the written request as I am asking the bank to essentially forgive 94% of the loan.

I'm hopin for ya!!!!!!!!!!!!!!!

I still haven't had a call since that conversation, think my attitude let them know their bully tactics won't work.

[brokemama]

I wish you the best of luck Sacdude. I modified my first and would like to do the same with my 58K HELOC with BofA. Keep us posted.

[givemeabreak]

I really love this thread. If I could get rid of my second mortgage it would be sooo great. My lender was very underhanded, yes I should have been more wary in hindsight, but I was trying to stave off bankruptcy hindsight is 20/20. I am following his thread with enthusiasm.

[BadBobMo]

The 2MP program has the funds provided to the lenders to pay-off your 2nd & HELC, but guess what all the Government people know about the program and had plenty of meetings and sent out letter to every one of them, but for some UN-know reason all of the lenders know nothing about it. If you have not paid them in the last 6 months the offer from the 2MP program is (.03 cents) on the dollar. I'm going to make some calls and find out what's-up and why they are not signed up for the program. I think it's another software problem that just got solved by (Third Party) New Program "Lender Processing Services" (LPS)
http://www.lpsvcs.com/HASP/Documents/HASPWhitePaper.pdf
Services are to sign up for this LPS for a small fee.
If your home is way under water you should be able to use the 2MP to pay-off your 2nd & HELC. " I need this program period." I will post new info after I make some calls!

[brokemama]

Thank you, Badbomoe! I will look forward to your findings anxiously. It sounds almost too good to be true

[indefault]

Update

Round 2 - Phone call came into today. Missed it but left v-mail asking to call back and any team member could assist me. Called back after getting the normal can I verify your account and permission to access your account nonsense, the gentleman asked me how I would like to make the payment today...HAHHAHAA.. Ummm what payment? Are you talkin about the payment in full I offered last week? You offered a pay off? Yes I did. Who did you offer it to?

Ok we're playing games again...I see.. Call me back when your ready to be serious. Sir, we are very serious and attempting to collect this debt that you have agreed in writing to pay. And what happens if I do not pay? Are you refusing to pay? Are you answering a question with a question? Who is playing games now? I don't know who?

Ok, I am going to go ahead and forward this to our escalation dept. Really? Yes. Ok can you do me a favor when you do? What's that? Can you have them ask for my son Jack, he's 4 and he just loves escalators, I mean we go to the mall this kid just goes banana's up and down..you should see him it's a great time.

[Sacdude]

Originally Posted by indefault

Update

Round 2 - Phone call came into today. Missed it but left v-mail asking to call back and any team member could assist me. Called back after getting the normal can I verify your account and permission to access your account nonsense, the gentleman asked me how I would like to make the payment today...HAHHAHAA.. Ummm what payment? Are you talkin about the payment in full I offered last week? You offered a pay off? Yes I did. Who did you offer it to?

Ok we're playing games again...I see.. Call me back when your ready to be serious. Sir, we are very serious and attempting to collect this debt that you have agreed in writing to pay. And what happens if I do not pay? Are you refusing to pay? Are you answering a question with a question? Who is playing games now? I don't know who?

Ok, I am going to go ahead and forward this to our escalation dept. Really? Yes. Ok can you do me a favor when you do? What's that? Can you have them ask for my son Jack, he's 4 and he just loves escalators, I mean we go to the mall this kid just goes banana's up and down..you should see him it's a great time.

Lol...Indefault you are having fun with this process. A word of caution from my experience, I was rude to a couple of HELOC reps who talked to me rudely. I gave it back to them right away. I noticed that after doing that my effort went no where for a while. Then again, I got a chance to talk to a realyl nice rep from another dept who took some time to request settlement for me ( from the underwriters) So you might want to go a little easy on them....Sometimes you can't help it though....I've had rep's who would call me and threaten to sue me and I would say " I appreciate that you work for the Bank and that you will do what is in the bank's best interest...I will do what is in my best interest" and leave it there.

Anways, there isnt much update. I called to find out whats up with the settlement offer and the guy said no one has submitted my settlement offer to the underwriter. He went over the stuff again with me on the phone and promised that he will cal back in 5 days to give me a status update. That guy seems to be nice and said he has about 14 settlement offers going on currently. If he is really nice as it seems and gets my stuff done, I will post his information on the website so anyone with Wells Fargo can directly call him.

3 cents on the dollar from the govt program is good.....but not all lenders are agreeing to enroll or follow those guidelines. I am not sure but I think the lenders might double dip...settle with us for x% on the dollar and then take 3 cents on the dollar from govt. Make sure you get everything in writing that the lien will be released and it will be reported as paid in full before you make a payment.

Another thing that I did was - in my settlement offer I put a date after which the settlement offer expires. You do not want to be liable for settling a purchase money heloc in case the first forecloses. Give them 30 days to respond and if they don't depending on the situation either fax a new settlement offer or forget about it.

Good luck to everyone,