2nd mortgage settlement

[lv317]

I've looked all over on here and every link I find has an error so I'm starting over. Sorry!

Goal: Settle 2nd mortgage as low as possible but within a year

1st Mortgage: 370K
1st Lender: Wells Fargo
1st Last Paid: 2015

2nd Mortgage: 112K
2nd Lender: Shellpoint
2nd Last Paid: 2010

Value: 415 max, believe much lower

Valuation issues: Online estimates says about 415K, jumped up 20K in the past month. House needs foundation repair, new roof, mold remediation, and numerous other repairs just to be a small 1960s rancher with no updates. It is likely a tear down. The house will most likely go into foreclosure or short sale and would be bought by an investor who would tear it down, split the property into two lots, build two houses, just like every other older property in my neighborhood.

Lender History: The 2nd mortgage was initially with Greentree/Irwin, and is now with Shellpoint. The loan hasn't been paid since about 2010. Ex filed bankruptcy in 2010 but I wasn't included. Equity loan was discharged and passed time limit to take any action, but they still hold a lien on the property. When I spoke with them several years ago (about 2013) about settling, the house was underwater and they said they'd just wait for the house to have equity. I spoke with them a couple of months ago and they said 30K (27%). I don't have anywhere close to that. I could probably come up with 5% (5600) but even that would be difficult.

Backstory: Bought a house in 2004. Ex refinanced to include his debt (motorcycle and credit) shortly after. Ex did equity loan for 120K in 2006 to remodel house to prepare for renting it out while we were stationed overseas but didn't use the money for remodeling and repairs, bought motorcycles and tattoos instead. Separated and divorced 2010-11. Stopped paying the 2nd mortgage. I lost my job in 2011. I was able to pay the 1st mortgage until about 2015. I tried a business but failed and have been unable to find work. I'm currently receiving disability, a portion of ex's pension, and child support - all awarded recently.

It is possible, with my new income, to do a loan modification on the 1st mortgage but I would need the lien released first. Wells Fargo was about to foreclose but the loan is in COVID forbearance for up to a year so I have about that long for a settlement. Even with the lien released, the house isn't really a good investment as it needs so much work. It would be like buying a 370K lot in an area where you can get waterfront for that. It would be easier to just let the house foreclose and walk away but I figured I'd at least try.

 

[Jzone]

I've looked all over on here and every link I find has an error so I'm starting over. Sorry!

Goal: Settle 2nd mortgage as low as possible but within a year

1st Mortgage: 370K
1st Lender: Wells Fargo
1st Last Paid: 2015

2nd Mortgage: 112K
2nd Lender: Shellpoint
2nd Last Paid: 2010

Value: 415 max, believe much lower

Valuation issues: Online estimates says about 415K, jumped up 20K in the past month. House needs foundation repair, new roof, mold remediation, and numerous other repairs just to be a small 1960s rancher with no updates. It is likely a tear down. The house will most likely go into foreclosure or short sale and would be bought by an investor who would tear it down, split the property into two lots, build two houses, just like every other older property in my neighborhood.

Lender History: The 2nd mortgage was initially with Greentree/Irwin, and is now with Shellpoint. The loan hasn't been paid since about 2010. Ex filed bankruptcy in 2010 but I wasn't included. Equity loan was discharged and passed time limit to take any action, but they still hold a lien on the property. When I spoke with them several years ago (about 2013) about settling, the house was underwater and they said they'd just wait for the house to have equity. I spoke with them a couple of months ago and they said 30K (27%). I don't have anywhere close to that. I could probably come up with 5% (5600) but even that would be difficult.

Backstory: Bought a house in 2004. Ex refinanced to include his debt (motorcycle and credit) shortly after. Ex did equity loan for 120K in 2006 to remodel house to prepare for renting it out while we were stationed overseas but didn't use the money for remodeling and repairs, bought motorcycles and tattoos instead. Separated and divorced 2010-11. Stopped paying the 2nd mortgage. I lost my job in 2011. I was able to pay the 1st mortgage until about 2015. I tried a business but failed and have been unable to find work. I'm currently receiving disability, a portion of ex's pension, and child support - all awarded recently.

It is possible, with my new income, to do a loan modification on the 1st mortgage but I would need the lien released first. Wells Fargo was about to foreclose but the loan is in COVID forbearance for up to a year so I have about that long for a settlement. Even with the lien released, the house isn't really a good investment as it needs so much work. It would be like buying a 370K lot in an area where you can get waterfront for that. It would be easier to just let the house foreclose and walk away but I figured I'd at least try.

Yes, walk away from this. Why would you want to keep this house if it needs all those repairs?

Are you on the mortgage/deed? Were both the first and second mortgage included in the bankruptcy and discharged? If they were, you are under no legal obligation for the debt. You are walking away from a nearly $500,000 mortgage debt.

It sounds like you haven't made a mortgage payment since 2015. Count your blessings for living rent free for five years and use the money you should have saved during that time to purchase another house.

 

[lv317]

Yes, walk away from this. Why would you want to keep this house if it needs all those repairs?

Are you on the mortgage/deed? Were both the first and second mortgage included in the bankruptcy and discharged? If they were, you are under no legal obligation for the debt. You are walking away from a nearly $500,000 mortgage debt.

It sounds like you haven't made a mortgage payment since 2015. Count your blessings for living rent free for five years and use the money you should have saved during that time to purchase another house.

Yes I'm on the mortgage and deed. Ex's name is still on the mortgage but not the deed. I don't think either were discharged in his bankruptcy. I don't really know anything about his bankruptcy. The equity company sent bills until the last one had a letter saying their time was up and they couldn't take any action. The 1st mortgage company sent a letter last month saying I needed to make a 170K payment or they would start foreclosure. I filled out a COVID form so that's on hold for now but it won't stay like that for long.

I haven't lived rent free for five years and haven't saved anything. I didn't have income until now and lived with family. I tried renting the house but ended up with squatters who didn't even pay one month's rent and caused thousands in damages. I couldn't fix the damages so I wasn't able to rent it to anyone else (my old roommate did the rental and the house turned into a drug den but that's another story).

Why try to stay in the house? My kids live 400 feet from this house (their father bought a house 4 houses away from this one - that's it's own hell). The house also has a basement apartment that can be used for income if needed - I used to run a childcare or I could use it as a rental. With the damages, I can't do either. I have bad credit and low income. I won't be approved for another home loan. Rentals in this area are higher than the 1st mortgage. A friend works in construction and said he'd help me with some of the work, nothing requiring permits but as much as we could to get the house back up to code. So if I could modify the loan, get help fixing things, reopen the day care or rent the room, I could get back on my feet and could be with my kids.

I would actually love to move out of state and start over but I doubt a judge would let me move my kids and I don't have the money to fight him.

I didn't get into any of this before since I don't think it's relevant when asking for advice on how to settle the equity loan quickly and for a low amount.

 

[Jzone]

Yes I'm on the mortgage and deed. Ex's name is still on the mortgage but not the deed. I don't think either were discharged in his bankruptcy. I don't really know anything about his bankruptcy. The equity company sent bills until the last one had a letter saying their time was up and they couldn't take any action. The 1st mortgage company sent a letter last month saying I needed to make a 170K payment or they would start foreclosure. I filled out a COVID form so that's on hold for now but it won't stay like that for long.

I haven't lived rent free for five years and haven't saved anything. I didn't have income until now and lived with family. I tried renting the house but ended up with squatters who didn't even pay one month's rent and caused thousands in damages. I couldn't fix the damages so I wasn't able to rent it to anyone else (my old roommate did the rental and the house turned into a drug den but that's another story).

Why try to stay in the house? My kids live 400 feet from this house (their father bought a house 4 houses away from this one - that's it's own hell). The house also has a basement apartment that can be used for income if needed - I used to run a childcare or I could use it as a rental. With the damages, I can't do either. I have bad credit and low income. I won't be approved for another home loan. Rentals in this area are higher than the 1st mortgage. A friend works in construction and said he'd help me with some of the work, nothing requiring permits but as much as we could to get the house back up to code. So if I could modify the loan, get help fixing things, reopen the day care or rent the room, I could get back on my feet and could be with my kids.

I would actually love to move out of state and start over but I doubt a judge would let me move my kids and I don't have the money to fight him.

I didn't get into any of this before since I don't think it's relevant when asking for advice on how to settle the equity loan quickly and for a low amount.

I don't see how you could settle the mortgage. You've said you have bad credit and your income is from disability, your ex's pension and child support. What settlement could you offer? The days of settling debt for 10-20% of the balance are long gone. But you never know until you offer. What can you offer to settle?

Check with your county register of deeds. Verify who holds the lien and offer a settlement to them. Your lien could of been sold/assigned to a debt collector by now.

One other thing you could do is file bankruptcy yourself. You said your ex did but you didnt and your name is still on the mortgage. Bankruptcy will get rid of the mortgage debt. If you dont file bankruptcy, you will still be legally responsible for the balance. Even if the bank sells your home, you will be responsible for the differance without bankruptcy protection. Bankruptcy will cost you around $2,000 but you will be debt free and it gives you a fresh start.

Good luck.