Bottom line upfront: Instead of going into foreclosure and/or being charged off, my home equity loan ($200K+) was paid in full via an insurance claim my lender made and i owe nothing!? Seems to good to be true, but i cant find any evidence suggesting otherwise. Here is the full story.
After a divorce in 2011, i could no longer afford my home loans (consisted of a 1st $390K @ 7% and a HELOC 2nd $200K @ 9%, both with USAA, but managed by another company). After a 9+ month long (and stressful) process, the First modified my loan to 30 years fixed @ 2% and i have been current ever since. Throughout the process i attempted to work with the heloc lender but they wouldnt budge an inch. The day before my heloc was set to foreclose, i called them up and attempted to make one payment and delay foreclosure by 30 days. That is when they informed me that they actually had an insurance policy on my home, had filed a claim two weeks prior, and that the insurance company had paid that claim the day before. As far as USAA was concerned, my loan was paid in full and i was in good standing with them. I immediatly called the insurance company (United Guarranty, USAA gave me their info) and they were more than willing to offer me a low, fixed rate. No paperwork, nothing, just a quick phone conversation. I never signed anything. In the months thereafter, i would receive simple looking one page bills in the mail. I made the payment for about 5 months. After that, my financial status changed again and i was no longer able to afford the 2nd loan. I stopped paying and there was almost no pushback at all...matter of fact, they sent me an unsolicited settlement offer. A few months later...correspondance from them stopped almost completely. Now, fast forward to today
more than a year later. I have been curious as to what happended so i pulled my three credit reports to see if there are any clues. Absolutely none. So what happended? Seems to me like the insurance company paid my loan off and i am free and clear...? Has anyone experienced anything like this?