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Wells Fargo HELOC settlement question, underwater,bankrupt, and first mortgage modified

Discussion in 'Debt Settlement' started by underwatertnt, Nov 10, 2012.

  1. underwatertnt

    underwatertnt LoanSafe Member

    I would appreciate advice settling with Wells Fargo home equity line 2nd.

    My BK was discharged 6 months ago in 2012 and I have not paid on Wells Fargo home equity line since 2008. I chose not to reaffirm the equity line when I filed bankruptcy. My home value is approx 900,000 and the first mortgage balance is $900,000. The equity line is $250K. Therefore, the toatl liens are $1,150,000 and I am underwater. My first mortgage has been modified through another lender and I am currently paying the first mortgage only and keeping the home.

    I have seen some posts about full extinguishment letters after loan modifications and DOJ settlments.

    I am not sure if I should ask for a full extinguishment of the 2nd equity line since I filed bankruptcy or offer a 2% settlement offer-($5000). I have not heard from Wells Fargo equity line since 2010 when they offered to settle for 10% ($25000). Its a challenge each month to pay the first mortgage and I have never had the $25,000 for the settlement that Wells equity line offered 2 years ago.
  2. Evan Bedard

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

    Welcome and thanks for joining the forum.

    Full extinguishments on 2nds are not too common but we have been seeing them happen more and more even on charged off accounts. Did you happen to receive a modification under your 1st under the DOJ settlement program? If you have not done so already, you will definitely want to read through the first posts in the following thread:

  3. underwatertnt

    underwatertnt LoanSafe Member

    I received a modification of my first mortgage in the Fall of 2011 but not sure if it falls under DOJ settlement program. My first mortgage is a jumbo loan $900k with Chase and is not owned by Fannie Mae or Freddie Mac. Would the DOJ settlement ever apply to a Jumbo loan?

    My other concern is that I do not want to my negotiation with Wells Fargo to be construed as reaffirmation of the debt that has been discharged in BK.
  4. Evan Bedard

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

    The DOJ settlement came out this year so you probably received a traditional in-house modification as that is typically the only program available for jumbo mortgages. If your 1st mortgage was modified and is at an affordable amount you may not be eligible for assistance under the settlement. However, you do not have to worry about your debt being reaffirmed after the modification because this cannot be done. Your loan would be reaffirmed if you happened to go through a refinance, but a loan modification is completely different from a refi and this will not change the status of your account.


    This particular expanded modification program, which began March 1, is for qualified borrowers with:

    • Financial hardship

    • A first and/or second loan on their primary residence

    • A loan that is owned and serviced by Wells Fargo — that means it is not an FHA, VA, Fannie Mae, or Freddie Mac loan, nor is it a loan owned by a private investor

    Any further detail would be based on each customer’s loan status and financial situation, and dependent upon the completion of a review.
  5. bionicle

    bionicle LoanSafe Member

    If I can't talk back and forth negotiation via telephone, how do I know settle amount?

    Are they gonna write a settlement letter?

    what they said is They can't counter my offer because I'm a chapter 7 bankruptee.

    even I send consent form with settlement offer.

    Do I still not talk to them? just wait?

  6. Evan Bedard

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

    Hey bionicle,

    You are referring to your 2nd mortgage and settling that account correct? If you have an active BK and the mortgages have been included, you will need to send them a letter from your BK attorney stating they can negotiate on the account. Once the mortgage(s) is under the automatic stay the lender will not continue negotiations or collections on the account until this has been done.
  7. bionicle

    bionicle LoanSafe Member

    chapter 7 and wf 3rd debt was included and discharged 2010.

    I was, am trying to settle 3rd heloc wf

  8. HopetoMove

    HopetoMove LoanSafe Member

    Hello, I am in a similar situation as you are. I have been trying to reach a settlement with WF on a HELOC that is in charge-off status that was included in Chapter 7 BK that was discharged in 2008 (yes it has taken this long and the process still isn't completed). From what Wells Fargo is telling me, because my HELOC is in charge-off status and was part of a bankruptcy, it is not eligble for any of the government modification or assistance programs. I asked for full extinguishment, they rejected. I asked for 1%, 2%, 3%,... etc over the course of two years I've worked up my amount to 5%. I am still waiting to hear feedback on this offer. Good luck!
  9. bionicle

    bionicle LoanSafe Member

    I just settle.

    Dear HopetoMove


    check there~

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