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Wells Fargo HELOC Settled- Success

Discussion in 'Wells Fargo - American Servicing Company (ASC)' started by WellsWellsWells, Nov 1, 2009.

  1. WellsWellsWells

    WellsWellsWells LoanSafe Member

    Wanted to put a success story out. We have a Wells Fargo Home Mortgage 1st and Wells Fargo Equity Line 2nd. Although they are both under Wells Fargo Bank, NA. They are completely seperate divisions and to my knowledge do not engage each other.

    In early 2009 I had a loss of income of a W-2 job. In addition to the W-2 employment I also has self-employed 1099 income. My wife is W-2 and has been for some time. We own several properties and went from equity position in all of them to behind in all of them on I/O mortgages that were all adjusting. I put in a call to 1st and 2nd. Was asked to submit packages for modification on both. Started this process in November of 2008 by slow paying the 2nd but not non-payment. In April, after 5-6 months of slow pay, stopped paying the 2nd. House at the time was valued at 330K. Our 1st mortgage was 345K so our 175K 2nd was fully unsecured. We looked into a CH 13 BK, but with our income or payback schedule was going to be 5 years, with a 2 year period after that, we didn't wan't to be dealing with it for 7 years. Ch 13 is a great option for someone with high unsecured debts and little to no income. We got the number of the presidential office off the loan safe forum. Turns out when I called them the Wells Fargo Equity Solutions has a simialr phone number

    Wells Fargo Bank- Equity Solutions- Executive Office 866-828-9436

    I told them it was or intention to do a CH 13 BK, but before we went ahead with that we were looking to see if we could work out an equitable settlement which would be best for us both. He was able to get me in touch with a negotiator who speciilized in settlements. Their number is 515-324-8000. I submitted all paperwork and told them that a modification on the 2nd would not help b/c I was fully unsecured and under water on my 2nd and our only hope was to settle the 2nd and modify the 1st. They did BPO's on our property and found that I was correct in that the 2nd was unsecured (no equity position for 2nd) We intially made an offer of 10% which was 17K. They said they would not settle for less than 80%. After going back and forth for 60days they finally agreed on a 30% settlement. We cashed in some of our investements and other $$ we had and cut them a check for 60K, that fully satisfied the 175K we owed them. We spoke with ourt CPA and b/c of the negative equity positions on our real estate we were able to show we were insolvent at the time of settlement, which means there will be no federal tax consequences for foregivness of debt. It was a LONG HARD ROAD but we got our letter in the mail a few weeks back. It says Settled in Full for less than amount owed. They reported it to the credit bureaus that way but added on a statement they charged off the balance. Last week I was able to get with their credit dispute dept (which they have a direct line to as well) they re-reported it to the credit bureaus as settled in full for less than amount owed.

    We are no into our 3rd month of a trial modification on our 1st. Awaiting for them to lock in a more permanent modification.

    Overall it was a success but be ready to buckle down for a rocky ride.

    If you have any specific questions on what worked for us and what didn't don't hesitate to reach out. We were prepared to go all the way whether it be BK or short sale and it worked out ion our favor. We really wanted to stay in our home but were looking at the whoel thing as a business decision with some emotion involved but business 1st.
  2. rocpis01

    rocpis01 LoanSafe Member

    I have a couple questions, as I am, in somewhat of a similar situation with WFF holding the 1st and WFF holding the 2nd.

    The owner of the company I worked for over the last 3yrs decided to close the business in March...or offered to establish owner financing terms and sell out to myself and a colleague. That said we choose to go with the deal and become self-employed rather than unemployed in the worst economy since the depression. Anyway, my income now fluctuates up and down about 10% per month, thus I had got behind on both the 1st and 2nd mortgages by about a month.

    In July 2009, WFF 2nd mortgage put me on a temporary payment plan with reduced interest and payment for 6 months. WFF 1st mortgage put me on a repayment plan to help catch up.

    The November payment is due the 25th, which I am going to miss by about 7-10 days, thus falling off their repayment agreement. At the same time, I contacted WFF 2nd mortgage to see if I could get them to extend the reduced payment and interest for another 6 months, which would help buffer my overall income fluctuation and give me a better chance of catching up. They told me to send a hardship letter and tax returns for the business I now own (I have yet to file an actual schedule-K on my own personal return as the business ownership just took place this April), which I have just done. They also told me about the HAMP plan for the 1st mortgage.

    I just sent a hardship letter to WFF 1st mortgage, which is where everything stands at this moment. I guess I've just started the overall process with both the 1st and 2nd.

    What can I expect out of WFF both 1st and 2nd mortgage departments/groups? What might happen since I am going to miss the payment on the 1st by about 7-10 days? Will something like this ruin my chances of a HAMP for the 1st?

    I am scared to death to disclose my monthly expenses for fear they'll tell me I can't afford the house....which is not the case. My situation has changed this year primarily due to the economy which has cause the income fluctuation. We've cut almost everything out of the household budget we can.

    Any advice as to the process, disclosing the expenses, etc., would be greatly appreciated.
  3. *abc123

    *abc123 LoanSafe Member

    Hi WellsWellsWells
    I am trying to settle with WF on my second as well. Hope i get the settlement. I had to call the executive office because those small guys won't do anything for me. My questions are: were you late on your payment at all? how long after you called the executive office that they offered the initial settlement? Can you give me the credit report number of WF just in case i need to correct my credit report?
    Thanks. and Congrats on your success. Keep us posted on your first.
  4. cahomeowner

    cahomeowner LoanSafe Member

    just wondering if anyone has considered lien stripping through chapter 13 versus trying to offer a settlement on your 2nd or 3rd?
  5. isitbuss

    isitbuss LoanSafe Member

    Has anybody found WF HELOC success stories with settlements?

    Does anybody have a fax number, or address, for contacting a settlement division for the WF HELOC dept? I don't like talking on the phone.
  6. DecentHuman

    DecentHuman LoanSafe Member

    I tried this number and it said it was for the Wells Fargo Consumer Credit Division. Also, it would not let you transfer anywhere without knowing the extension or last name of a party. When I pressed 0, it said I was transferred to a non-working number. When it said if I don't have a touchtone phone, wait on the line, I tried that, but it said if I don't press something soon, I'll be disconnected, which is exactly what happened.:eek:

    LOOKING LoanSafe Member

    please reply me -- please reply me
    I am very similar situation -wells Fargo is 2nd , and 1st is US bank and wells Fargo is my servicer-- I have 50k equity not 100% underwater but not sure till BPO
    appraisal - I have 540k 1st and 2nd 300k now reviewing for loan md for 1st

    1) what kind of information did you you send for settlement ???- someone posted here said " don't send anything -be careful what you are sending"
    2) can I have email address for VP second mortgage wells Fargo executive office -I have phone number
    3) how long you didn't pay second
    4)can you give to me wells Fargo credit dispute dept phone number
    5)so it took 2 months to settle.
    6) how did the BPO appraisal to make sure you have -no equity underwater
    7) did you do while doing 1st loan mod and same time 2nd to settle all to gather same time.-- what is you suggestion

    I really do appreciate if you share me your information

    LOOKING LoanSafe Member

    try this one 866 834 7949
  9. rockraider3

    rockraider3 LoanSafe Member

    the fax number I have for the Loss Mitigation department is:


    Loss Mitigation is the settlement group for pre - charge-off. I didn't have much luck dealing with them, personally.

    After I charged off, they sent me to the Recoveries Department. I don't have a fax number for them, but their phone number is:


    In the end, I settled my WF HELOC for 17% the balance.
  10. isitbuss

    isitbuss LoanSafe Member


    Did you send them any info before the charge off?

    Please share your story in more detail as this is the info many are looking for.

    Did you apply for a mod first? Some have said that Wells won't settle if you do not apply for a mod, or did you ignore them until it charged off?

    Did you negotiate with Wells after charge off, or did they sell it to another company who you negotiated with?

    How long did the negotiations go on until you reached an agreement?

    What did they base 17% on?
  11. rockraider3

    rockraider3 LoanSafe Member

    I wrote a lot of my story at the debtconsolidationcare.com forums, under the mortgage sub-forum, so you could probably read some more about it there... Not that I'm trying to spam with another website, so I won't link the thread (not sure what's allowed or not allowed here).

    No, I never attempted to modify the loan (the first or the HELOC).

    No, I never provided any information, other than my hardship story which I repeated adnausem... in writing and every time I was on the phone with them. This is really why I got nowhere with the Loss Mitigation group. They were unwilling to really work with me because I wouldn't provide them with my income, pay stubs, tax return, bank account statements, etc. My point to them was that every time I called, I get the message saying that any information collected will be used to collect a debt, and therefore I wouldn't provide them with any information. I also said I wasn't sure what their "black box" formula was going to say when I gave it to them, but I knew what I could afford, so there was no need to give them the information.

    But to be fair, I wasn't angling for a modification, I wanted to settle the HELOC because it was a recourse loan and I was pretty certain the home would foreclose with nothing for the HELOC lender. And it did foreclose.

    Wells kept it after charge-off. I ended up settling it around August of last year when it charged off in June. The Recoveries group did negotiate with me, but it took about a month to 45 days of back and forth to work them down to 17%.

    No idea what they based their settlement on, and I don't think anyone can really explain how creditors decide this stuff... in my experience having settled over $100k of credit card and HELOC debt. I think it was more based upon what I was offering and the progression of the settlement dialog.

    The biggest things in settling HELOC debt, in my opinion, are to know the laws. Here in California it's California Code of Civil Procedure 580(a)-(d)... and there's the One Action Rule too. It's imperative to understand how to use these to your advantage.

    For example, my firend is a mortgage broker and owns a bunch of rental properties. Long story, but he was leveraged to the hilt all his rental homes foreclosed... In multiple cases, he had to keep paying the 1st mortgage current to force the HELOC (recourse loans) to foreclose the house.... the result is that the HELOC lenders can't come after him for a deficiency judgement. But the laws differ by state...
  12. isitbuss

    isitbuss LoanSafe Member


    When you said that you turned in all paperwork before you negotiated, weren't you afraid they would just look at your balance sheet, see all of your liquid assets that you used in the settlement, then ask for all of it?

    Also, were you late at the time on either the first or second?

    Was it charged off when you negotiated it?
  13. ssanthan

    ssanthan LoanSafe Member

    In case of properties which foreclosed was there equity in the home. Do you mean to say that even with 1st loan underwater, HELOC foreclosed. I wonder what they would have got in this case and why they would foreclose, by buying out the first and end up loosing money. If you can elaborate on your friends situation that would be great.

    The reason i am asking is, there are folks who are staying current on the first and letting the second charge off to come to a settlement with HELOC.

  14. Angels

    Angels LoanSafe Member

    wow Rockraider, very helpful! I don't know if we took the right approach as we provided WF with everything they asked for, called them regularly to see if they needed anything else and have been proactive this whole time. but they are only our servicer, Fannie is our investor so we have no idea on what to expect.

    Can you provide a more detailed example on using the laws to your advantage? I dont really understand that because if it is a recourse loan, then your pretty much at a disadvantage, right?
  15. angelino

    angelino LoanSafe Member

    Question for WellsWellsWells and anyone else who have similar experience. When WF settled the HELOC for less than full payment, did they issue COD for 1099-C? From what I read, OP's home never went to foreclosure. Can banks issue 1099-C in such a case?
  16. Chloe8231

    Chloe8231 LoanSafe Member

    Started Settlement Process

    Because of your post I have intiated the same request through the settlement department at Wells. Thank you very much for your information. I am in very similiar circumstances with a 1st, 2nd and 3rd, however, my wife and I still have jobs with decent income. Affter all is said and done though, we have very little at the end of the month after paying all of our bills. I am about 2 months behind now on my equity. I have been trying to get modifications on my 1st, 2nd and 3rd since the end of 2008. Always denied because they said we make too much? Yea right, try living in Southern California. We now feel backed into the corner and all that is available now seemed like BK 13 or short sale.

    I have a couple of questions if you don't mind:

    How long does it take to get assigned a negotiator?
    Is there a certain profit/loss they are looking for?

    Thanks for you consideration in anwering my questions.

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