Getting Harrassed on the Second

[tmtbrian]

Hi,

I am currently trying to save my home and in the process of renegotiating with my first. My home is approx. 50% underwater and my wife lost her job 6 months back. I am hoping to have a principal reduction, but I am not sure at this point. BoA services the first and HSBC services the second. Bank of New York owns both notes. The loan originated as an 80/20 and was later resold to these 2 separate service companies.
I received a call yesterday from some debt collection agency call American Coradius International based out of New York saying they are working on behalf of HSBC.Now HSBC knows the situation I am in and I gave them an update a week ago, that hopefully I will find out in the next couple of weeks whether I will keep my home and workout the first.I called this ACI and noticed that they ran a hard credit inquiry on my account without my permission to look at what I have. They informed me that they are now trying to work things out for HSBC and that even if my home forecloses, I will still owe the second. I live in the state of CA and from what I have read, I have found this is only true if the second is part of a refinance which in my case has never happened. Can anyone shed some more light on this?

Thank You

[jayguy0710]

tmtbrian,

Since you are in California and have not refinanced the loans, they are indeed non-recourse, meaning that the bank (or the collection agency, or whomever) cannot pursue you for a deficiency judgment in the event of foreclosure. That being said, banks/collection agencies often times make an attempt to collect, preying on uneducated borrowers in an effort to scare them into paying. For now, I would do nothing. Do not call them back, do not correspond with them at all for now. Doing so will only cause you stress and will not help you accomplish what your goal appears to be which is to stay in the house.

If you are trying to work with the 1st loan and plan on staying in the home (only you know your own situation, but a 50% underwater home sounds like something I'd walk away from since you are in CA) just simply don't have any contact with the 2nd. As the 2nd lien on a massively underwater property, the 2nd cannot do anything yet (foreclosure, sue, etc.) and they know that - they are just hoping you don't and hence you cough up some $.

Eventually only after modifying the 1st to something you are comfortable with (get it in writing) then and only then you may want to consider settling your 2nd lien for cents on the dollar. There is a thread for that here, it's a "sticky" thread so shouldn't be too hard to find. The reason you may want to settle the 2nd is that if you plan to stay in your house eventually you may want to sell it, and if the 2nd lien is still on the property you will owe them that money plus all fees upon sale - unless you settle.

Good luck and keep us posted,

J

[tmtbrian]

Hi,

I am currently trying to save my home and in the process of renegotiating with my first. My home is approx. 50% underwater and my wife lost her job 6 months back. I am hoping to have a principal reduction, but I am not sure at this point. BoA services the first and HSBC services the second. Bank of New York owns both notes. The loan originated as an 80/20 and was later resold to these 2 separate service companies.
I received a call yesterday from some debt collection agency call American Coradius International based out of New York saying they are working on behalf of HSBC.Now HSBC knows the situation I am in and I gave them an update a week ago, that hopefully I will find out in the next couple of weeks whether I will keep my home and workout the first.I called this ACI and noticed that they ran a hard credit inquiry on my account without my permission to look at what I have. They informed me that they are now trying to work things out for HSBC and that even if my home forecloses, I will still owe the second. I live in the state of CA and from what I have read, I have found this is only true if the second is part of a refinance which in my case has never happened. Can anyone shed some more light on this?

Thank You

Thanks Jay

Currently right now. BofA sent me a letter in writing to fix my first to 2% for the rest of the loan with approx 350k owed on it. The second is around 82k, the house is maybe worth 215k. Im trying to get BofA to reduce principal but not currently sure how it will go. Dealing with HSBC has gotten me no where. Hence I am in a bind and am not sure what to do. Can you give me the link to that sticky you were talking about? I looked but cant seem to find it. Thanks for the help so far, and any further hellp would be appreciated. Thanks

[jayguy0710]

Strategy for Settling Your 2nd

That should take you there, although I'm not sure that should be your area of focus based on the amount you are underwater.

I will put in my two cents concerning the chances of obtaining a suitable modification of the 1st loan w/ BofA: slim to none. I hope for your sake that I am wrong, but as others can attest to, modifications do not solve the issue of the drop in value of the underlying asset, the house. Unless you can get a principal reduction that is, which are from what I have read very rare. Bank of America seems to be exceptionally tough from my memory. I'm not trying to change your mind on whether to work with the bank or not, but rather I'm just cautioning you that the odds are not in your favor. Short of a massive principal reduction, I just don't think any payment reduction modifications are going to help the overwhelming problem of value.

Plus, you need a hardship to qualify for such things, and believe it or not job loss might not get you there! My wife lost her job a couple years ago and I went to the bank to ask for some sort of help (before I found this forum). Quite literally our income was cut in half... 50% gone and the bank(s) told me "I'm sorry sir, you don't have a hardship. Let's do a budget so you can better manage your finances" - I was pretty floored. The modification programs they have now are slightly different and you may have a better chance, I'm not sure.

I have used this calculator before, it's a good rough gauge of the mathematics behind walking away or staying, etc. It's www. pay or go . com - I think it's sponsored by some BK attorney, but whatever, it does the trick. You're basically 40% underwater on the 1st loan alone, not including the 2nd - that is a LOT, which makes walking VERY appealing, IMHO.

[lisamomof4]

we did a 1st mod with BofA, 3% for remainder of loan, no pricipal reduction....i don't know offhand of many who get that, but 2% is good. will it bring the payment to where you can handle it? the only other thing i've seen them do is take the overage and add it as a 'balloon' at the end of the mortgage. if you can make the numbers work i would stay, a home is not just an investment and at least in my area the cost of rentals is going through the roof. i would ignore the 2nd for now, they are full of it in reguards to threts

[gettinout]

Im trying to get BofA to reduce principal but not currently sure how it will go.

I don't mean to be a negative nellie, but principal reductions are incredibly rare. I have heard it suggested that the major banks allow a few slip through here and there just to keep other hoping and talking to the bank. Smaller banks like Fifth Third in Ohio are a bit more reasonable, but basically, if you are dealing with BofA, you should not count on getting one.

I'm with the others: let the house go. Even if you get a mod (which is far from a sure thing), you're looking at 135k underwater. You could pay on that thing forever and just break even. No telling if home prices will ever recover to that point. Whereas if you walk away, you can do far better things with the money you'd pay into that house and the second would be wiped out altogether. You'd be free and clear to start over, maybe go find a nice rental nearby for cheap.

You gotta do what you gotta do, but I'd look at all the options if I were you.

[tmtbrian]

Hi,

As an update, still trying to negotiate with BoA, so its not in foreclosure yet, but now got a letter from this debt company threatening to ruin my credit more if I dont pay up or dispute in 30 days. I was wondering if they can do this, considering HSBC is already reporting this on their own.

[SurfwhenUcan]

Hi,

As an update, still trying to negotiate with BoA, so its not in foreclosure yet, but now got a letter from this debt company threatening to ruin my credit more if I dont pay up or dispute in 30 days. I was wondering if they can do this, considering HSBC is already reporting this on their own.

The most they can do is report you late for up to six months and then charge off the loan. Ignore them. With the lates you already have on the 1st anything they report good or bad will make absolutely no difference at all in the long run. They are a debt collector and most of what they tell you is going to be geared toward scaring you into doing something you don't need to do. Ignore them. Or mail them a one line letter return receipt - Just type KI$$ MY A$$.

[TomEason]

The most they can do is report you late for up to six months and then charge off the loan. Ignore them. With the lates you already have on the 1st anything they report good or bad will make absolutely no difference at all in the long run. They are a debt collector and most of what they tell you is going to be geared toward scaring you into doing something you don't need to do. Ignore them. Or mail them a one line letter return receipt - Just type KI$$ MY A$$.

Hi Surf
My thoughts and sentiments exactly. I especially enjoyed your last suggestion!

[NegativeValue]

I do love this website )

[SurfwhenUcan]

We do have fun don't we? As long as it's at the lender's expense, I'll keep on posting

[Ready2Run]

Hi,

As an update, still trying to negotiate with BoA, so its not in foreclosure yet, but now got a letter from this debt company threatening to ruin my credit more if I dont pay up or dispute in 30 days. I was wondering if they can do this, considering HSBC is already reporting this on their own.

Take a look at these two PDFs from Legal Guides at California Department Of Consumer Affairs
http://www.dca.ca.gov/publications/l...uides/dc_1.pdf
Fair Debt collection Practices Statues: Legal Guide DC-2 - California Department Of Consumer Affairs

They will be able to help you know your rights. The others are right as far as the 2nd and debt collector but these might help you shut them up.

[ddonnas21]

Hi,

As an update, still trying to negotiate with BoA, so its not in foreclosure yet, but now got a letter from this debt company threatening to ruin my credit more if I dont pay up or dispute in 30 days. I was wondering if they can do this, considering HSBC is already reporting this on their own.

HSBC is terrible to deal with! They do not participate in any of the government programs and they very rarely do permanent mods. I have heard of a few settlements but not many. So it would not surprise me that they would resort to this type of chicanery to try and get payments. As far underwater as you are and being in CA I agree that walking away would be something I would consider if it were me. Good luck!