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Anyone experience something like this?

Discussion in 'Stop Foreclosure and Tell Us Your Story' started by kaymonster, Aug 22, 2013.

  1. kaymonster

    kaymonster LoanSafe Member

    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?
  2. Evan Bedard

    Evan Bedard Call 1-800-779-4547 Loan Safe Mortgage

    That's a great question, if your 2nd mortgage was paid in full and forgiven you should have received a letter stating you've been released from the liability of the mortgage - such as a "Full Reconveyance" notice. What does your credit report now list for this account?
  3. TomEason

    TomEason LoanSafe Guide Staff Member

    kaymonster

    Thanks for sharing this interesting and inriguing story. I recommend you check with your county recorder's office to ascertain whether the 2nd lien has in fact been reconveyed. If a deed of re-conveyance has been recorded, you're probably in the clear. To be certain, I might suggest you find and read a copy of your USAA HELOC note. It's possible the note contains info about mortgage insurance, but PMI normally pays a lender should a borrower default. It's possible that, regardless what you've been told, the debt still remains. Who knows? Good luck.
    Last edited: Aug 23, 2013
  4. kaymonster

    kaymonster LoanSafe Member


    Credit reports pulled last thusday. All state that the account is closed.

    Equifax: shows a balance of $0 and has a current status of "pays as agreed"

    Experian: shows a balance of $0 and has a status of "Paid, Closed"

    Transunion: shows a balance of $0 and has a status of "Current; Paid or Paying as Agreed"
  5. kaymonster

    kaymonster LoanSafe Member

    Thanks, that is great advice...i was not aware i could check with the recorders office. I will do that and report back what i find. I will also double check the heloc note, but im almost positive i was not paying pmi. Matter of fact, i recall being surprised that the loan was paid by an insurance claim and asking the usaa rep on the phone how that was possible since i did not pay mortgage insurance.
  6. kaymonster

    kaymonster LoanSafe Member

    So i just logged onto the county recorders website and found an "ASTG Trust Deed" filing from USAA to United Guaranty. Not what i was hoping for. I guess its a matter of time before United Guaranty attempts to collect or sells it off to a collection agency.

    Well....not sure what to do now.
  7. Erik Sandstrom

    Erik Sandstrom Mortgage Expert - Call 1-800-779-4547

    This is quite the interesting story! It sounds like the best thing to do is leave everything alone and not rattle any cages if it's been a year. The only time it's going to come up is if you sell the home or they open up your case and start trying to collect on the bad debt. I highly doubt a lien would just disappear but I guess you never know nowadays.
  8. kaymonster

    kaymonster LoanSafe Member

    Agreed. I guess best case is the former and worst case the latter.

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