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ball park cost for getting sued by bank?

Discussion in 'Debt Settlement' started by Michigan?, Apr 19, 2012.

  1. Michigan?

    Michigan? LoanSafe Member

    We're about to start the "strategy" for the 2nd .

    From what I understand the worst case is if Chase would sue us for it (we're in Michigan - recourse state), but if there are no assets (cars, cash, etc.) what could they achieve?
    first mortgage (just refi'ed with HAMP to different bank - was Chase) in my case is right around even with the second right around 100 percent underwater.

    I am just trying to get a potential worst case scenario.

    Does anybody have an idea also what court costs could be? Are we talking 2-5 Grand or more like $25k?

    I know these questions are kinda vague. But I bet there is a few people nervous about this before starting the "strategy". At least that's why we have been dragging our feet for over a year now :-(
  2. Evan Bedard

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

    It seems very rare for a servicer to pursue a judgement on a homeowner who has settled their second, but in a recourse state this may be possible. What are the current balances of your mortgages?
  3. Michigan?

    Michigan? LoanSafe Member

    I just want to understand what would be the worst case. I feel fairly confident, especially since Chase seems to be a good candidate for this.
    My wife is just very, very nervous about doing this. I don't want to do it either, but we also depleted most of our savings and now finally need to do something.
  4. TomEason

    TomEason LoanSafe Guide Staff Member

    Michigan

    Thanks for your post. I'm not clear on your situation. If you did you refi with a new lender, the old Chase loan would have been either paid off or subordinated to the new 1st, putting them in 2nd position. But if they did subordinate, why would they have done that?

    Very confusing. Please clarify. No one here can help unless you give us your numbers, to include the home value, the balances of the 1st and 2nd, and identify the lenders.

    Thanks.
  5. Michigan?

    Michigan? LoanSafe Member

    ok, fair enough - beginner mistake...

    1st just refi'ed from Chase to different bank ~250k
    2nd subordinated during refi - still with chase ~65k (purchase money - but I believe MI is recourse anyway)
    zillow value 275k, but comps look more like ~250

    2nd is in my wife's name only (she's not working). So again I am just trying to get a feel for what could be the worst case situation.
    We're out of savings, so I am not sure what they could go after if we do get sued, no assets in her name only, no wages to tarnish...
  6. TomEason

    TomEason LoanSafe Guide Staff Member

    Michigan?

    Thanks for that update.

    From the numbers you've given, your 2nd is underwater and won't FC. Nor can Chase lawfully sue you on that 2nd until it becomes a recourse SOJL.

    Unless you believe your real estate micro-market will soon recover (very unlikely), you shouldn't worry; you have no compelling reason to settle in the near future.

    I recommend you get a current handle on your home's value with a CMA (usually no charge) or a BPO. Zillow values won't cut it.

    Good luck!
  7. Michigan?

    Michigan? LoanSafe Member

    I guess that was one thing I hadn't picked up in my countless hours browsing through here! So is there anything Chase could do when we apply "the strategy" while we still have a first mortgage that we are current on? other than wait and do nothing?
    Or do they literally have to wait until we want to sell the house or if it gets FC'ed?
  8. TomEason

    TomEason LoanSafe Guide Staff Member

    Michigan?

    Thanks for your post. Chase won't FC on their 2nd while it is underwater. So, they get to watch and wait (for a long time) until your RE market recovers enough that they're no longer underwater. You can figure about $50K additional costs (add $50K to your 2nd's loan balance) to handle and re-sell that REO property. The additional $50K in costs adds to your cushion, i.e. your home's value will have to appreciate that much more before your Chase 2nd is no longer underwater.
  9. Michigan?

    Michigan? LoanSafe Member

    Thanks for all your feedback. I guess I didn't realize that they can't sue us until we would attempt to sell of FC the first.
    We plan on staying there for a while and would be able to stay current on the first. So nothing should happen there and considering the $50k cost for them to FC that won't happen for the next 10-20 years ;-)

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