Home Loans and Support

1st Sold From Chase To Sps...2nd With Wells And Can't Get 2nd Modded

Discussion in 'Ask the Attorneys?' started by jlh911, Jul 4, 2014.

  1. jlh911

    jlh911 LoanSafe Member

    Hello,

    Our 1st mortgage was with Chase and Chase sold it to Select Portfolio Servicing(SPS) and SPS was able to modify our 1st(Not much of a change and it included a balloon payment with no reduction of principal) through the HAMP program.

    Our 2nd(HELOC) is with Well Fargo and they told us that since our 1st was modified under the HAMP program, that WF could modify us under their version called the 2MP program.

    The problem is this: In order for WF to modify us, SPS had to have reported that our 1st was modded under the HAMP program and in turn, report that to the U.S. Treasury Department.

    That was over a year ago and we can NOT get modded with WF because when they go to look in the system they use to see that our 1st was modded under the HAMP program, they see nothing.

    I don't know who's telling the truth. SPS says they did everything as they should per the HAMP guidelines and WF says they cannot move on without seeing that fact that it's been modded under HAMP.

    Our credit is getting screwed because we are behind about 6 months with WF and cannot continue to make the regular payment. I've called them both many many many times and I keep getting bounced back and forth between them saying neither of them can do anything or have done all they can.

    Our home is worth about 400K (depending on what website you look up with) and we owe 484K and our second mortgage balance is about 52K.

    What would you suggest doing in our situation?

    Thanks!
  2. Moe

    Moe Call 1-800-779-4547 Staff Member Loan Safe Mortgage

    Hello,

    This happens often. They are starting to play hard ball on these 2nd mortgages.

    What state are you in and what other debts as far as credit cards etc do you have besides the mortgage? Does your current income cover these creditor debts?
  3. jlh911

    jlh911 LoanSafe Member

    Hello Moe,

    Thanks for getting back to me. We're in CA and we do have credit card debt and we can barely cover these debts with what we're making now, but not if we have to pay what we're supposed to be paying on the 2nd.

    Thanks
  4. jlh911

    jlh911 LoanSafe Member

    Any other thoughts?
  5. Moe

    Moe Call 1-800-779-4547 Staff Member Loan Safe Mortgage

    Yes, sorry for the late reply. You may want to follow one of our member's strategy for settling your 2nd mortgage. The strategy is to not pay the 2nd, and eventually settle the debt at 5-15% of what is owed. The reason being is because the 2nd will most likely never foreclose on an underwater home and the fact that they cannot recoup their money if they do foreclose.

    Here is a link to that strategy - http://www.loansafe.org/forum/threads/strategy-for-settling-your-2nd.37996/

    In addition, based on your statements you are what the U.S. legal system may call bankrupt. Your debts, regardless of what they are cannot be fully paid per your income. Hence, your debts have bankrupted you.

    If you qualify, you may qualify for a chapter 7 bankruptcy wiping out the credit card debt and later through a chapter 13, you may be able to wipe out your 2nd mortgage entirely through what is called a mortgage cram down where the courts simply wipe out your 2nd mortgage because it is underwater. When you do a chapter 7 and then a 13, this is called a chapter 20.

    You may want to talk to a great bankruptcy lawyer who understands mortgage and real estate law if you are thinking this may be a route you want to take so you can get expert legal advice.

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