Help!!!! Second mortgage troubles - Loan Modification Forum

gigi321 · 05-11-2009, 02:19 PM

Okay....so, we have approval from the first mortgage and have been waiting on the second for some time. Today, I get this correspondence. I am so confused. My attorney advised me not to worry he was going to negotiate but, I can't help to worry. Is this even negotiable? Should I get an attorney? He said he was going to speak to an attorney himself..........he is experienced in short sales but was taken aback by this response.

"Please be advised that Wachovia Bank will accept a short sale offer of $3,000 towards the 2nd lien but the deficiency balance will be charged off and the customers will be contacted by our Recovery Department for re-payment options after settlement has taken place. This will not be considered a settlement or forgiveness of debt.

If you have any questions or concerns please feel free to contact me directly."

gigi321 · 05-11-2009, 02:32 PM

I meant to say my real estate agent is going to do the negotiating.......

HopingtoFind · 05-11-2009, 05:33 PM

In general everything is negotiable... but the question is will your RE agent be able to negotiate with your Bank complete release of liability. I guess that depends on your lender and how skilled your agent is with negotiating short sale.

If he is not able to get you a release you could either get an attorney to try, agree to what the lender wants or just walk away and not do a short sale.

amiesheikh · 07-26-2009, 02:38 PM

I don't think just walking away is the best answer. Try to get them to agree to an amount to settle the debt with (if you offer them another $1000 they may agree to settle). I am a real estate agent in VA and I actually have given up some of my commission to make the deal work so that my seller can have a settled account with their second trust. If you push the first trust, they may agree to give a little more towards the second.

You didn't say what state the property was in but if you walk away and they foreclose and are allowed to sue you for the deficiency then you'll be in a worse situation than if you agreed to let them charge of the smaller amount of the remaining balance of the second trust and proceed with the short sale. Saye you owe $500K between your first and second. If you foreclose then they can cme after you for the whole amount. If you do a short sale with the first agreeing to get what they get and the second agreeing to take $3000 and charge off the rest (say for example $75,000), then once the short sale is complete and the property is sold, that $75K is an unsecured debt. They'll have a harder time getting that money from you because they have no collateral (ie your property) to secure the debt. I'd rather be in the situation where I may only owe $75K instead of $500K.

playinthegame · 07-26-2009, 02:59 PM

We live in Calif. And are facing a similiar situation. The second is securred by the Home the 1st is carried on.What recouse do the servicers of the second have?

amiesheikh · 07-26-2009, 03:16 PM

As long as the home is still in your name and you own it, the second trust is second in line for payoff if the home gets foreclosed (that's how it is in VA anyway, probably similar in CA but look up the foreclosure laws). If you owe more to the first than the home is worth then the second will get screwed and get nothing if the home gets foreclosed. The first trust would be first in line to get any proceeds from the home at a foreclosure sale. If naything is left over it goes down the line to pay off debtors that have a lein against your property (ie the second trust, HOA's etc.) If they are allowed to (depending on the state laws), then the second may sue you for the deficiency.

Are you attempting a short sale?

playinthegame · 07-26-2009, 03:44 PM

Yes, we are lookin at a possible short sale on the property. But I was told to wait approx. 3-4 months before we do.We want to live in the house as long as possible with hopes to later purchase again in 2 years by doing the SS vs. foreclosure but this all depends on what the other bank trys to do on the second.This is why I am seeking advise early on.And yes we do owe more then the house is worth Approx. -330K ouch.

elgrancane · 08-20-2009, 05:02 PM

Hi. I'm in North Carolina and am buying a home that's under short sale with Countrywide. The seller's realtor finally got a hold of someone at Countrywide and they told her that the "short sale is now in Phase 2". Does anyone know what that means? Thanks

05-11-2009, 02:19 PM	#1 (permalink)
gigi321 Member Join Date: Feb 2009 Posts: 20	Help!!!! Second mortgage troubles Okay....so, we have approval from the first mortgage and have been waiting on the second for some time. Today, I get this correspondence. I am so confused. My attorney advised me not to worry he was going to negotiate but, I can't help to worry. Is this even negotiable? Should I get an attorney? He said he was going to speak to an attorney himself..........he is experienced in short sales but was taken aback by this response. "Please be advised that Wachovia Bank will accept a short sale offer of $3,000 towards the 2nd lien but the deficiency balance will be charged off and the customers will be contacted by our Recovery Department for re-payment options after settlement has taken place. This will not be considered a settlement or forgiveness of debt. If you have any questions or concerns please feel free to contact me directly."

05-11-2009, 02:32 PM	#2 (permalink)
gigi321 Member Join Date: Feb 2009 Posts: 20	Re: Help!!!! Second mortgage troubles I meant to say my real estate agent is going to do the negotiating.......

05-11-2009, 05:33 PM	#3 (permalink)
HopingtoFind Senior Member Join Date: Oct 2008 Posts: 556	Re: Help!!!! Second mortgage troubles In general everything is negotiable... but the question is will your RE agent be able to negotiate with your Bank complete release of liability. I guess that depends on your lender and how skilled your agent is with negotiating short sale. If he is not able to get you a release you could either get an attorney to try, agree to what the lender wants or just walk away and not do a short sale.

07-26-2009, 02:38 PM	#4 (permalink)
amiesheikh Member Join Date: Jul 2009 Location: Northern VA Posts: 22	Re: Help!!!! Second mortgage troubles I don't think just walking away is the best answer. Try to get them to agree to an amount to settle the debt with (if you offer them another $1000 they may agree to settle). I am a real estate agent in VA and I actually have given up some of my commission to make the deal work so that my seller can have a settled account with their second trust. If you push the first trust, they may agree to give a little more towards the second. You didn't say what state the property was in but if you walk away and they foreclose and are allowed to sue you for the deficiency then you'll be in a worse situation than if you agreed to let them charge of the smaller amount of the remaining balance of the second trust and proceed with the short sale. Saye you owe $500K between your first and second. If you foreclose then they can cme after you for the whole amount. If you do a short sale with the first agreeing to get what they get and the second agreeing to take $3000 and charge off the rest (say for example $75,000), then once the short sale is complete and the property is sold, that $75K is an unsecured debt. They'll have a harder time getting that money from you because they have no collateral (ie your property) to secure the debt. I'd rather be in the situation where I may only owe $75K instead of $500K.

07-26-2009, 02:59 PM	#5 (permalink)
playinthegame Member Join Date: Jul 2009 Posts: 14	Re: Help!!!! Second mortgage troubles We live in Calif. And are facing a similiar situation. The second is securred by the Home the 1st is carried on.What recouse do the servicers of the second have?

07-26-2009, 03:16 PM	#6 (permalink)
amiesheikh Member Join Date: Jul 2009 Location: Northern VA Posts: 22	Re: Help!!!! Second mortgage troubles As long as the home is still in your name and you own it, the second trust is second in line for payoff if the home gets foreclosed (that's how it is in VA anyway, probably similar in CA but look up the foreclosure laws). If you owe more to the first than the home is worth then the second will get screwed and get nothing if the home gets foreclosed. The first trust would be first in line to get any proceeds from the home at a foreclosure sale. If naything is left over it goes down the line to pay off debtors that have a lein against your property (ie the second trust, HOA's etc.) If they are allowed to (depending on the state laws), then the second may sue you for the deficiency. Are you attempting a short sale?

07-26-2009, 03:44 PM	#7 (permalink)
playinthegame Member Join Date: Jul 2009 Posts: 14	Re: Help!!!! Second mortgage troubles Yes, we are lookin at a possible short sale on the property. But I was told to wait approx. 3-4 months before we do.We want to live in the house as long as possible with hopes to later purchase again in 2 years by doing the SS vs. foreclosure but this all depends on what the other bank trys to do on the second.This is why I am seeking advise early on.And yes we do owe more then the house is worth Approx. -330K ouch.

08-20-2009, 05:02 PM	#8 (permalink)
elgrancane Member Join Date: Aug 2009 Posts: 5	Re: Help!!!! Second mortgage troubles Hi. I'm in North Carolina and am buying a home that's under short sale with Countrywide. The seller's realtor finally got a hold of someone at Countrywide and they told her that the "short sale is now in Phase 2". Does anyone know what that means? Thanks

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