underwater in CA; just want to strategic default on (2nd) HELOC with Chase, NERVOUS!!

[meggood]

Here's the skinny: I own a cute house I want to stay in, but I owe $235,000 and presently it's worth about $150K. I have a $30K HELOC, non-purchase, fixed 8.25% with scoundrel bank Chase who won't return my calls so that I can reduce to prime. Suddenly it occurs to me, why not stop paying the HELOC? I'm easily underwater on this otherwise affordable house, probably for about the next 7 years. What can Chase do? I have followed the posts about defaulting on HELOC and understand the chronology of events, harassing phone calls, fall in credit, etc., but since my HELOC is non-purchase money, DOES THAT MEAN THAT CHASE CAN COME AFTER MY HOUSE IN 7 YEARS WHEN WE ARE ABOVE WATER? If I settle with chase in 6mos, IS THAT IT? DONE? I've already paid them $10K in interest and I still owe the original loan amt, so I am looking to be done with it so that we aren't still in this house in 10 years. (It's cute but small!) PLEASE ADVISE!! thanks!!

[Cat Damiano]

Hi meggood,



Welcome to the forum and thank you for joining..............

If you have not already done so, I would recommend you visit the following thread as it has the answers to your questions there.

Strategy for Settling Your 2nd

[meggood]

Cat, thanks for your response. I know the "Strategy for Settling your 2nd Loan" very well. In fact, I printed it out and re-read a couple times. Still, I have some questions. Exactly what does "charge off" mean? Will Chase still own the loan, but just have sent it to THEIR collections dept? If the debt gets sold to an OUTSIDE collections agency, is the the possibility for settlement with Chase over? WHat happens to the lien? I very much want that eliminated/reconveyed. I guess I'm worried that I will miss the opportunity for settlement (as I have read 1 person did!) if I "ignore all calls." Or, worse, that settlement offers may never come and they go straght to wage garnishment. I thought I read something from TomEason (and I can't find it now) that in the state of CA, secured debt is protected from deficiency judgements, so that would mean Chase couldn't take me to court? Do I understand this correctly? I cannot show hardship, so I plan not to disclose any financials. HAMP is not in my future either. My house is way underwater-- by 60-70K, just for the first. so I'm not worried about them foreclosing. And, as I mentioned, I don't want to "walk away" from my house either, since we like it and can afford it. But clearing the HELOC would be a great relief. . . and I 'd be willing to endure some credit blow if I could make the HELOC go away.

[Cat Damiano]

You may want to repost your questions right in that thread as there are a group of members going through the process of settlement that would be better equipt to answer.