Wells Fargos 2nd Settlement - newbie

[gmendoza]

First off all let me start by saying that I can't believe this site exists! I wish I would have come across this about 8 months ago. Anyway, my story:

I have been with Wells Fargo for my 1st and my 2nd for about 10 years now. I hadn't been late on either until I stopped paying my 2nd back in December of last year. I owe about $215K on my 1st and $86K on my 2nd. I decided to stop paying the 2nd because I knew I was underwater and was hoping to wipe that out clean. A friend of mine referred me to a modification guy and he started the process for me.

Well, the modification people that I am working with seem to have started the process for me but they have been so bad with communicating with me and keeping me in the loop. I received a settlement letter from WF about 3 weeks ago for the common 40% and when I called my modification guy, he didn't even know about it. Needless to say, I think I need to handle this on my own at this point. So I never responded to the letter and now I am thinking I should be doing the counter offer call or letter that everyone talks about. No need in waiting for my modification guy to handle this for me. It's probably something I should do on my own anyway.

So I've read both sides with some people saying to call and others saying not to call and just send a letter. I'm thinking of offering about $4-$5K to start and see what happens.

Any thoughts? Thank you so much in advance. You guys are awesome.

[Evan Bedard]

So I never responded to the letter and now I am thinking I should be doing the counter offer call or letter that everyone talks about. No need in waiting for my modification guy to handle this for me. It's probably something I should do on my own anyway.

So I've read both sides with some people saying to call and others saying not to call and just send a letter. I'm thinking of offering about $4-$5K to start and see what happens.

Any thoughts? Thank you so much in advance. You guys are awesome.

Thanks for joining gmendoza and I'm glad you are enjoying the forums.

You seem to be in a perfect position to settle your 2nd mortgage and it is a good idea taking matters into your own hands because this is definitely something you can accomplish on your own. At this point you are really in no rush to settle the account because they are in no position to pursue foreclosure on this mortgage since it is underwater. I suggest you take a look at the first posts in the following thread, it will show you everything you need to know (including strategies) to help settle this account..

[gmendoza]

Thank you Evan. Do you mean the how to settle your 2nd thread? I didn't see a link in your response.

[bigshan1]

Follow it and it WILL work. It did for me.

Shane

Strategy for Settling Your 2nd

[gmendoza]

Thanks Shane! I was hoping to find you in these forums. I did read your story and it sounds so much like my situation. Very happy for you to have settled for a good % rate. Congrats!

Based on all the tips in "Strategy for Settling Your 2nd," it looks like I am already at step 3. Now is when I should contact the lender to counter offer right? The letter WF sent me with the 40% offer was dated August 6th and the 15 days expired on the 21st. Should I wait a little longer before counter offering or would you recomment I send my offer letter now?

Thank you again!

[bigshan1]

Thanks Shane! I was hoping to find you in these forums. I did read your story and it sounds so much like my situation. Very happy for you to have settled for a good % rate. Congrats!

Based on all the tips in "Strategy for Settling Your 2nd," it looks like I am already at step 3. Now is when I should contact the lender to counter offer right? The letter WF sent me with the 40% offer was dated August 6th and the 15 days expired on the 21st. Should I wait a little longer before counter offering or would you recomment I send my offer letter now?

Thank you again!

If I remember correctly, when I got my %40 offer, I immediatley countered (via mail) with an offer below 10%. I don't recall if I ever got a rejection letter on my offer, but after a couple months, I got a %20 settlement offer from WF. Once I received that letter, I called the WF collections dept. There should be a name and number of the agent handling your charge off. I was very fortunate and had an agent who seemed like she cared and returned phone calls. We went back and forth with percentages until we agreed on 17 perecent. If your charged off second is still with WF collections, the person sending you the letters who is assigned your case can personally give you a settlement offer no lower than 30%. To go below that, they have to ask thier supervisors then call you back. Remember to start off low and work your way up.

Good Luck
Shane

[gmendoza]

I just received a voicemail fromm the recovery department at Wells Fargo. I guess I will be giving them a call to see what they have to say.

[Evan Bedard]

Shane has given excellent advice and that was the exact post I meant to provide a link to lol. Personally I would counter the offer with a settlement as low as 3-5 percent and negotiate up to an agreeable amount from there. Remember the ball is in your court here!

[gmendoza]

So I wanted to give an update after calling WF today and following the strategy that you've all talked about. I called the recovery number and spoke to a guy that sounded like he was just a young kid answering phones. I gave him my account info and he stated the 40% offer that I had already been given via mail. I told him that I was not in a position to pay that and he quickly said, well let's see what we can do. He left for a few seconds and came back with, how about 35%? I told him that was not in my ballpark either and then he said he could go as low as 30%! It was pretty amazing how quickly he went down without even attempting to ask any other questions. He was ready to go down to 30% without much of a fight. I told him that I was looking to settle for about 10% of the original 40% offer, so basically for about $3k-$4k. He said that was impossible and that he could only offer 30% without supervisor approval. I told him that he should ask his supervisor about my offer. He said they couldn't go lower. He then stated that he could take my $3k-$4k as a down payment and the rest could be spread out over 12 months. I told him I didn't have that kind of money which is why I was in my financial situation. DUH! At this point he asked how much I made a month and I told him that I had already provided that information before. He said that the info was from March and thus old. I told him nothing had changed. He then tried small talk with me asking why I had fallen behind on payments, etc. I politely told him I needed to go but that I would entertain a settlement more in my range if he could come up with it. I really did have to hang up since I was at work but the weird thing is he sounded almost bummed that I was getting off the phone. I told him that I would try calling him back and he asked "when?" I really felt like I had the upper hand at this point.

So, long story short, it sounds like the strategy you all talk about is right on! The bank seems like they are desperate for you to settle and are hoping that you will take one of their higher offers. I feel pretty good right about now and I am wondering, do I just wait now? Should I follow this up with a letter reiterating my lower % settlement? Even though I am still far from done, I can almost already smell victory!

Thanks again everyone!

[bigshan1]

So I wanted to give an update after calling WF today and following the strategy that you've all talked about. I called the recovery number and spoke to a guy that sounded like he was just a young kid answering phones. I gave him my account info and he stated the 40% offer that I had already been given via mail. I told him that I was not in a position to pay that and he quickly said, well let's see what we can do. He left for a few seconds and came back with, how about 35%? I told him that was not in my ballpark either and then he said he could go as low as 30%! It was pretty amazing how quickly he went down without even attempting to ask any other questions. He was ready to go down to 30% without much of a fight. I told him that I was looking to settle for about 10% of the original 40% offer, so basically for about $3k-$4k. He said that was impossible and that he could only offer 30% without supervisor approval. I told him that he should ask his supervisor about my offer. He said they couldn't go lower. He then stated that he could take my $3k-$4k as a down payment and the rest could be spread out over 12 months. I told him I didn't have that kind of money which is why I was in my financial situation. DUH! At this point he asked how much I made a month and I told him that I had already provided that information before. He said that the info was from March and thus old. I told him nothing had changed. He then tried small talk with me asking why I had fallen behind on payments, etc. I politely told him I needed to go but that I would entertain a settlement more in my range if he could come up with it. I really did have to hang up since I was at work but the weird thing is he sounded almost bummed that I was getting off the phone. I told him that I would try calling him back and he asked "when?" I really felt like I had the upper hand at this point.

So, long story short, it sounds like the strategy you all talk about is right on! The bank seems like they are desperate for you to settle and are hoping that you will take one of their higher offers. I feel pretty good right about now and I am wondering, do I just wait now? Should I follow this up with a letter reiterating my lower % settlement? Even though I am still far from done, I can almost already smell victory!

Thanks again everyone!

Very well handled. DO NOT send them any more financial info. If they ask for more again, continue to tell them that nothing has changed and kindly decline. It may take another month or so, but you will likely get that %20 offer in the mail. Until then, just keep hanging out and wait. You have the total upper hand. Once that letter comes, cold hard cash speaks volumes. Within a week of me getting my %20 letter, I called, negotiated a settlement because I agree to one payment. My collections rep (who was awesome) said the supervisors are more willing to settle on a lower amount if you make one payment. Also, when you negotiate your bottom line, they WILL ask you where your money is coming from. Tell them its a gift from family. You'll be good to go.

Shane

[fredflinstone]

I've got a quick question for you folks. I'm about to miss my 4th payment on my 2nd with WF - I am working the strategy for settling a 2nd. I've had no communication with WF since. They sent a notice intention to foreclose after the 2nd missed payment and have been calling incessantly. For the last few weeks I've been having messages left from the same gal at WF saying 'it is imperative you call us back, I've been trying to reach you, etc.'

The wife is not freaking out a bit over the messages, I just wanted to see if you folks got the same messages left to put our minds at ease.

Thanks!

[bgriff]

Yes - everyone gets those messages and letters. The big letter you'd get is the NOD, and you'll get several copies regular mail and several copies certified mail. That's how you'll know it is the real deal. Until then, everything else is routine crap from these people and you can ignore them. FYI - after six months, they will charge off the account. Don't get excited though, the debt is still there and you'll have moved on to phase II were you can patiently wait until they offer you a settlement. It may even get sold to a CA.

[bigshan1]

I've got a quick question for you folks. I'm about to miss my 4th payment on my 2nd with WF - I am working the strategy for settling a 2nd. I've had no communication with WF since. They sent a notice intention to foreclose after the 2nd missed payment and have been calling incessantly. For the last few weeks I've been having messages left from the same gal at WF saying 'it is imperative you call us back, I've been trying to reach you, etc.'

The wife is not freaking out a bit over the messages, I just wanted to see if you folks got the same messages left to put our minds at ease.

Thanks!

i too recieved a few of those "intent" letters. Place them in the round file. You've only missed three (soon to be 4) payments. Your loan likely hasn't even been charged off yet. That usally occurs after 180 days of non payment. There is ZERO reason to worry...especially if your second is completely underwater. The second will not foreclose because not only would they not get jack from the sale (the 1st would get it all), it would cost WF thousands to foreclose. Keep on keeping on!! You still have another 6-8 months before you possibley settle. It took me a bit over a year.

Shane

[Evan Bedard]

I've got a quick question for you folks. I'm about to miss my 4th payment on my 2nd with WF - I am working the strategy for settling a 2nd. I've had no communication with WF since. They sent a notice intention to foreclose after the 2nd missed payment and have been calling incessantly. For the last few weeks I've been having messages left from the same gal at WF saying 'it is imperative you call us back, I've been trying to reach you, etc.'

Like the members above stated it is very common to be sent this notice when behind on payments and they will be very persistent to call because there is really nothing they can do once the account is charged off. Plus these reps are trained to try and ring all the money out of you they possibly can. I'm assuming your 2nd mortgage is under correct? Also which state is your property located?

[gmendoza]

So I just received a letter from Triburon Financial stating that my balance is due in full. I am guessing this is the company that my balance was charged off to? It does say that I can dispute the debt within 30 days but I figure this is part of the process. It's also funny that I haven't received any other voicemails from Wells Fargo since I spoke to them a little over a week ago with my settlement offer. I have received random 800 number calls but no voicemails.

Just sit and wait?

Thank you all!

[Evan Bedard]

So I just received a letter from Triburon Financial stating that my balance is due in full. I am guessing this is the company that my balance was charged off to? It does say that I can dispute the debt within 30 days but I figure this is part of the process. It's also funny that I haven't received any other voicemails from Wells Fargo since I spoke to them a little over a week ago with my settlement offer. I have received random 800 number calls but no voicemails.

Just sit and wait?

Yes this is the collection firm now handling your 2nd mortgage. I'm sorry but what state are you located in again?

[gmendoza]

I'm in the state of California.

[Evan Bedard]

Oh yeah sorry about that I figured it was CA but it had slipped my mind. Yes I would just sit back and wait for them to offer a settlement amount since they are not going to foreclose on your property.

[Georgiahome]

Does it make a difference what state I am in when it comes to settling a 2nd. I live in GA my 1st Mortgage balance is $107K my sendond with WF balance is $41K the CMA for my area is $105K. I was discharged from chapter 7 7/2010 and did not reafirm second I have not paid 2nd for 1 year and have not recieved a settlement offer but I recieved a letter my loan was charged off.

[fredflinstone]

Like the members above stated it is very common to be sent this notice when behind on payments and they will be very persistent to call because there is really nothing they can do once the account is charged off. Plus these reps are trained to try and ring all the money out of you they possibly can. I'm assuming your 2nd mortgage is under correct? Also which state is your property located?

Evan & Bigshan,

Thanks for the response...sorry for the slow reply on my end.

My house is worth $295,000 or so
My first with BOA is $220,000
My 2nd with WF is $165,000

We are in NJ. I now have 6 missed payments at this point on the 2nd. The 1st is current and was modified in house by BOA.

[gmendoza]

So it's been 2 months since my last communication and I still have not received any offers from anyone. No mail correspondence, nothing. I do get the occasional 800 phone call but I don't answer and they don't leave a message. Is this still part of the process? Should I still just wait it out?

Thank you!

[gmendoza]

So it's been 2 months since my last communication and I still have not received any offers from anyone. No mail correspondence, nothing. I do get the occasional 800 phone call but I don't answer and they don't leave a message. Is this still part of the process? Should I still just wait it out?

Thank you!

So is this normal? I have not received any mail correspondence or voicemails from WF in over 2 months. I'm wondering if this is just part of the process because I know for sure they have not forgotten about me!

Thank you.

[Eruban]

I posted on another thread and still dont understand.. To make the math simple.... 1st with BOA $275,000 2nd with WF 500,000 house value $525,000 why wont the 2nd forclose and assume payments on the first? then sell my house themselves and make the $200k...of course that is a $300K loss for them but $200k thats alot more than what I'm Offering

[bgriff]

It's for many reasons but first off, your home as a FC won't sell for $525 - discount it by at least 15% - so it would sell as a FC around $450.

Also look at this way, they are out $500 already - do they really want to push that to almost $800 ? To put $800 in, with plenty of risk, to possibly get back $450 - plus, like Tom said, they probably have it insured so there's no need to tie up $800 in capital.

For a bank to foreclose, they would have to be very certain that they would be able to recover ALL monies, not just a portion. That's why you'll only see a 2nd FC when there is more than enough equity to cover the 1st and 2nd loans + any fees and discounts to FMV.

[Eruban]

thanks for your response...Big question is why cant they just assume the payments on the first? ("forclosure subject to the first")then sell the property?

[bgriff]

I believe the FC triggers the "due on sale" clause -included in most mortgages.

[Eruban]

thanks again for your answer...I am still being told the first BOA would accept the 2nd offer to take over the first payment because the 5.35% intterest is better than nothing/profitable for them to keep thus the 2nd can take over current payments, sell the house and still make at least $100k on the sale

[bgriff]

Who told you BOA would agree to that ? If you are current on the first then I doubt they go for it. Wouldn't that clear you of the liability (and recourse) ?

[Eruban]

The first is at 5.35% and current..... Which is much more than they could loan it to another for!
The "due on sale" (aka "acceleration clause") is a provision in a mortgage document that gives the lender the right to demand payment of the remaining balance of the loan when the property is sold.

It is a contractual right, not a law. This means that if title to the property is transferred, the bank may (or may not), at its option, decide to "call the loan due."

[bgriff]

Yes, the 1st has the right to and would (and should) call the loan at FC. If they will be made whole at FC, there not going to let another bank pay them a monthly payment while their asset is at risk of vandalism etc. They would hold all the risk while the second is out looking for a buyer. You never stated who told you the first would agree to that arrangement.

[leaning]

Hello Everyone,

I am following the strategy and only 5 months into it. I stopped paying the first ($130K) and 2nd with WF ($492K) in July 2012. I am trying to modify the first in the next 30-60 days to lower my payments and completely ignoring the 2nd with WF. Today I got a "Notice of Right To Cure Default (Real Estate)" letter from WF and I get about 4 phone calls a day which go to voice mail. The house is in CA and worth around $400K (if that). Is this NOD letter it was mentioned above or will I get another one in December (which makes it 6 months into it)? Did anyone get this letter before the NOD?

My situation is similar to Eruban such that my 2nd with WF is much larger than my 1st and the house is worth about $230K less than what I owe for both banks. The explaination provided make sense.
Thanks

[Eruban]

Let me know what happens (leaning)...Heres my plan right now
house value $500k first BOA $275 HELOC $500 WELLS... both refused to modify I figure if i can get rid of the second then the 1st would gladly modify..Wells asked me for a settlement offer and tons of papperwork..I offerred 50K(family gift) they wanted more and put nothing in writing..By the way I'm current on both never late..so I offerrerd 72K and same thing..they want more....I am now going to withold payments on the second and hope for a settlement....seems like the saying is "if your current then why should they bother"

[leaning]

Eruban, I will keep you updated. I am surprised you were able to make Wells Fargo an offer to settle while you are still currnet. Why would they settle for less if they can get the whole amount. I am waiting to hear on my first to see if they would lower the interest rate and lower the payments. I was out of a job for a long time and used all of my savings/401k. Now I have a job but pays much less than what I used to make (half). I can start paying the 1st again if they lower the payments. As far as the 2nd with WF, it is interest only HELOC and with my current salary, no way I can pay it. I did not even bother to apply for modification with WF. I hope they will charge off the loan and settle in the next 6 months. By the way, thanks to Tom Eason and Evan Bedard for their exceptional contribution.

[Eruban]

My Wells is a HELOC also..I asked them to modify because of the loan to value and as soon as rates increase I'm dead meat..even at 4.2%; adj I'm paying almost $1800 interest only... after they turned down my request for a mod/refi or rate reduduction they asked if i wanted to make a buyout offer... they also offerred to put my adj into a fixed for 10.5% nice of them

[leaning]

Hello Everyone, I have not seen much activities or postings. Did we miss the boat for settling with the banks?

Quick update on my situation and a question: I was aproved for a trail period on the first of $130K with Met (they lowered the interest rate and extended the loan period). As far as the much larger HELOC with WF ($490K) I get daily calls on my internet line which I dont answer; however I did get a 3 page letter from them yesterday saying they can't help me unless I contact them and that I have not made a payment for 6 months and owe $11K in back payments. They did threaten to move forward with the foreclosure process. I am in CA and the house is worth $400K and I owe between the 1st and 2nd $630K. My goal is to settle with WF but so far it seem they have not charged off the loan. My question: I have never spoke with WF at all since I stopped paying 6+ months ago. Never called them or sent anything to them. Does it matter if I even talk to them to tell them I am not working and have no money to pay the loan or just wait until they send something in writing about settling? I guess what I am asking is: by contacting them to tell them my situation will it impact the outcome (charge off the account any faster)? Will they persue foreclosure if I dont contact them? Should I call them?

[leaning]

Hello Everyone, I have not seen much activities or postings. Did we miss the boat for settling with the banks?

Quick update on my situation and a question: I was aproved for a trail period on the first of $130K with Met (they lowered the interest rate and extended the loan period). As far as the much larger HELOC with WF ($490K) I get daily calls on my internet line which I dont answer; however I did get a 3 page letter from them yesterday saying they can't help me unless I contact them and that I have not made a payment for 6 months and owe $11K in back payments. They did threaten to move forward with the foreclosure process. I am in CA and the house is worth $400K and I owe between the 1st and 2nd $630K. My goal is to settle with WF but so far it seem they have not charged off the loan. My question: I have never spoke with WF at all since I stopped paying 6+ months ago. Never called them or sent anything to them. Does it matter if I even talk to them to tell them I am not working and have no money to pay the loan or just wait until they send something in writing about settling? I guess what I am asking is: by contacting them to tell them my situation will it impact the outcome (charge off the account any faster)? Will they persue foreclosure if I dont contact them? Should I call them?

Folks quick update. I called WF for the first time since I stopped paying over 6 month ago today to see the status of my loan (i.e. has been charged off etc). The woman I talked to was from the collection dept within WF. So she said she is not sure about the status of my loan and she must transfer me to the foreclosure dept. I asked repeatedly if she can give me any status and she said I must call the foreclosure dept. I said do you have a sale date, yes at the end of the month (Jan. 2013). She could not transfer me because that dept already closed. she said to call the foreclosure dept at 866-992-0984. I will call them tomorrow but I thought I get an opinion from the experts/others here as far as what to expect. I know WF has to buy the first loan (see my story in the quote above) before they can foreclose since it is the junior loan etc. Could they be working with the first loan bank with out my knowledge? I made the 2nd trial payment for the 1st after agreeing to modifying the loan. The fact my case is not handled in the collection dept but in the foreclosure is that a concern or does it mean they will charge off the loan? Any help is appreciated!!!

[TomEason]

Hello Everyone, I have not seen much activities or postings. Did we miss the boat for settling with the banks? Quick update on my situation and a question: I was aproved for a trail period on the first of $130K with Met (they lowered the interest rate and extended the loan period). As far as the much larger HELOC with WF ($490K) I get daily calls on my internet line which I dont answer; however I did get a 3 page letter from them yesterday saying they can't help me unless I contact them and that I have not made a payment for 6 months and owe $11K in back payments. They did threaten to move forward with the foreclosure process. I am in CA and the house is worth $400K and I owe between the 1st and 2nd $630K. My goal is to settle with WF but so far it seem they have not charged off the loan. My question: I have never spoke with WF at all since I stopped paying 6+ months ago. Never called them or sent anything to them. Does it matter if I even talk to them to tell them I am not working and have no money to pay the loan or just wait until they send something in writing about settling? I guess what I am asking is: by contacting them to tell them my situation will it impact the outcome (charge off the account any faster)? Will they persue foreclosure if I dont contact them? Should I call them?

Thanks for your post. Your WF HELOC is way underwater, so WF won't FC. I recommend you seek to eventually settle by following the guide at post #1 of the following thread. There's definitely no hurry; your patience is required. I recommend you NOT communicate with WF. Good luck to you. Strategy for Settling Your 2nd

[Eruban]

I'm 2 months in to not paying WF HELOC 500k I still don't understand why they won't payoff my fisrt at 275k when the house is valued at 600k... the leftover equity seems to be worth doing than not to me.??? Eruban@aol.com

[TomEason]

I'm 2 months in to not paying WF HELOC 500k I still don't understand why they won't payoff my fisrt at 275k when the house is valued at 600k... the leftover equity seems to be worth doing than not to me.??? Eruban@aol.com

Here's why: 600K - 275K - 500K = - 175K. WF would have to pay out real cash $$ to pay for something that's worth less than what their acquisition cost. And that's without figuring the average $50K expenses that a lender will incur to resell that REO. Banks just don't do that - ever.

[leaning]

Thanks for your post. Your WF HELOC is way underwater, so WF won't FC. I recommend you seek to eventually settle by following the guide at post #1 of the following thread. There's definitely no hurry; your patience is required. I recommend you NOT communicate with WF. Good luck to you. Strategy for Settling Your 2nd

Tom thank you so much. I was hoping to hear from you. I plan to follow the strategy for settling the 2nd and I am just waiting for them to charge off the loan and start making offers to settle. Not in a hurry. So far I have followed your recommendations for the two loans for this house with WF, rental house, and creditcards. So far so good I also freed myself from the credit score stigma. I guess I was wondering what WF meant by saying "the sale date is set for end of the month". Are they basing this on the first loan filing for foreclosure with the county court which I am in a trial period now? Regardless of the answer is I plan to move forward with your suggested strategy.

Thanks again for your immense contributions.

thanks again