WELLS FARGO 2nd loan charged off

[hanginginthere]

Hello everyone!
I hope someone can enlighten me with this. We live in California and purchased a home in 2006 with an 80/20 loan - 1st loan is with ING (435k) and 2nd (118k) is with Wells Fargo (HELOC). If we never refinanced, does the 2nd loan considered 'purchase' money?
I was working with ING for a loan mod. and had stopped paying my mortgage (both 1st & 2nd) for 8 mos. Then a month ago, I found out through my credit report that my 2nd loan was charged off by Wells. Next came the letter from the Collection Agency (Primary Financial Svcs. based in AZ.)... My 2nd loan was 118k and the collector wants me to pay 47k and was only given a few days to come up with the money (like I can just pick 47k from my trees in the backyard!)..Anyway, we called them and was trying to settle the debt for 6k as this was the maximum amount we can borrow from our relatives and friends. The collection Agency declined it and insisted we should pay 47k. What happens if we can't pay it? Will they foreclose our home although the loan mod. for the 1st has been completed? - will they garnish our wages? file judgement deficiency? I am worried, please help!

Thank you.

[cahomeowner]

I have seen some separate threads where people are not paying their second, filing chapter 7 and then hoping to negotiate a settlement with the 2nd. in your case you may also want to research lien stripping through chapter 13.

if you don't pay the 2nd then they have a lien on your property that has to be satisifed if you ever sell or refi now the question is whether or not they can proceed with foreclosure being in 2nd position....still researching

[hanginginthere]

Thank you cahomeowner.
Can't qualify for Chap. 7 & 13 because of our income and we own (2) properties though both are underwater.
In the meantime, we'll keep calling friends/relatives and see if we can come up with more money to settle it. Based from what I read, some people were able to settle those for 10cents/$1.

[gz9gjg]

Usually an 80/20 implies the 2nd is purchase money. What was the timing of signing the 1st and 2nd? I see they are with different banks.

If they were done the same day I believe you can win the argument that the 2nd is purchase money.

If you originally had your 2nd same day / same bank as 1st, I wonder if the 2nd would still be considered purchase money.

Good luck . . .

[Daisy Cutter]

I believe your second is purchase money, and consequently, all they can do is foreclose on you. They can't garnish your wages or any of that. And realistically, they can't foreclose either. All they will do is harass you, and they do hold a lien on your property.

I would try to meet in the middle between $47K and $6K. Offer them $15K and see if they take it. I think your $6K offer is a little too low for $118K in original debt. But don't worry about wage garnishment, and if they threaten this, remind them that your 2nd is purchase money under 580b and if they try to pull some kind of technicality and say it isn't, you will contact Jerry Brown (who will certainly not side with the banks).

[cahomeowner]

how long do you have to wait to settle with your 2nd? anyone have any guidelines (based on experience) of what they have been able to settle for? please share your experience

[isitbuss]

wellswellswells posted a 30% settlement on another thread.

Does anybody have a fax number, or address for WF Home equity solutions?

I don't like talking on the phone and want to make a settlement offer on the HELOC.

[csburg]

wellswellswells posted a 30% settlement on another thread.

Does anybody have a fax number, or address for WF Home equity solutions?

I don't like talking on the phone and want to make a settlement offer on the HELOC.

Try contacting Richie Scholes, he works for WF Home Equity.

richard.a.scholes@wellsfargo.com

[rockraider3]

Usually an 80/20 implies the 2nd is purchase money. What was the timing of signing the 1st and 2nd?

That is true, but the poster should read their HELOC loan document as it will state whether it is recourse or non-recourse.

[rockraider3]

wellswellswells posted a 30% settlement on another thread.

Does anybody have a fax number, or address for WF Home equity solutions?

I don't like talking on the phone and want to make a settlement offer on the HELOC.

Well, from my experience, they aren't going to just take your written/faxed settlement offer and jump on it. That's not how they work. Their system is designed to get you on the phone and pump you for information. I went round and round with them on this (via phone because I got no repsonse from my faxes), because I wouldn't provide them with specific figures or information.

And I don't think I ever did provide them with any information that I can recall (other than my hardship story which I told any and everyone that would listen), but I had to wait until after charge-off before they'd settle with me at roughly 17% of the balance.

Also, there are numerous departments, depending upon what stage you are in... The Loss Mitigation Group (pre- charge-off) Fax Number: 866-593-3578.

I don't have a fax for the Recoveries Group (post charge-off), but their phone number is 800-361-9985. I thought Joe Poenta was really nice to work with... x15958.

[rockraider3]

how long do you have to wait to settle with your 2nd? anyone have any guidelines (based on experience) of what they have been able to settle for? please share your experience

They wouldn't settle with me until about 60 or so day after charge off, which happened at 180 days past due. So all in about 240 days or thereabouts.

I settled my balance at 17% of the original principal. In my experience, having settled both a Wells HELOC and Credit Card, they stop accruing interest and fees after charge-off, which isn't necessarily typical of other lenders.

I've heard of some folks settling as low as 5-10% on their HELOC's, but I think every situation differs and can vary greatly based upon how much under water the house is compared to the loans. And it will differ by state depending upon the anti-deficiency laws and if the loan is recourse or non-recourse.

My loan was recourse so I was very active in trying to get it settled. The home actually foreclosed a few weeks after I settled the HELOC, but I was happy because I resolved what would have been a future lawsuit against me for .17c on the dollar...