Heloc Loan As A First In Default..... Only Loan On Home.

db760

LoanSafe Member
Nov 25, 2009
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I have a heloc with B of A and 3 plus years ago it burned down and I stop making my payment a year and a half ago. I tried two short sales but they where not approved because house has damage. They would not do a Dee in lieu either because house is damaged. The house is in there system starting foreclosure but no date set.

They just sent out a appraiser to the property also. I can not find anything on the internet on how to deal with them? The loan is for $195k and the first two appraisal's came in at $50k and $20k last year and the short offer was $50k. Will they do a payment reduction or will they let this go to foreclosure?
 
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Moe Bedard

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Hello,

I do not know how you can do a loan modification on a home that is not habitable. This is a first for me and I have counseled thousands of people. Now I know why you cannot find any information because your situation is unique.

My thoughts are that you are essentially stuck and at their mercy. Most likely they will charge of the loan and it will just go into foreclosure.
 

db760

LoanSafe Member
Nov 25, 2009
12
1
3
Hello,

I do not know how you can do a loan modification on a home that is not habitable. This is a first for me and I have counseled thousands of people. Now I know why you cannot find any information because your situation is unique.

My thoughts are that you are essentially stuck and at their mercy. Most likely they will charge of the loan and it will just go into foreclosure.
I live in California and the Heloc I did back in 2008 I think? If they foreclosure on the home would they charge off the Heloc and write it off or would they come after me to pay pack the difference after the sale? Or would a collection company try to negotiate a pay off?
 

Moe Bedard

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If they charge the HELOC, it would then become a personal debt and they would most likely sell the debt to a collection agency who will then try to pursue you for collections. At that time, you can either

A. ignore them and hope they do not sue you

B. work out a payment plan

C. work out a lump sum settlement

D. claim bankruptcy

E. if you have no money after normal living expenses and they sue you, you can claim insolvency which means they could not collect from you because you have no money which means you are insolvent.
 

db760

LoanSafe Member
Nov 25, 2009
12
1
3
If they charge the HELOC, it would then become a personal debt and they would most likely sell the debt to a collection agency who will then try to pursue you for collections. At that time, you can either

A. ignore them and hope they do not sue you

B. work out a payment plan

C. work out a lump sum settlement

D. claim bankruptcy

E. if you have no money after normal living expenses and they sue you, you can claim insolvency which means they could not collect from you because you have no money which means you are insolvent.
If they charge the HELOC, it would then become a personal debt and they would most likely sell the debt to a collection agency who will then try to pursue you for collections. At that time, you can either

A. ignore them and hope they do not sue you

B. work out a payment plan

C. work out a lump sum settlement

D. claim bankruptcy

E. if you have no money after normal living expenses and they sue you, you can claim insolvency which means they could not collect from you because you have no money which means you are insolvent.
Do you think BofA would do a principal reduction or a lump sum settlement instead of a foreclosure?
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,851
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Southern California
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I do not think they would reduce the principal, but they would most likely entertain a settlement offer.
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,851
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Southern California
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Meaning you settle for less than what is owed on the HELOC with a lump sum cash offer. For example, say you owe $50,000, you can offer them $5,000 and negotiate a settlement.
 

db760

LoanSafe Member
Nov 25, 2009
12
1
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Meaning you settle for less than what is owed on the HELOC with a lump sum cash offer. For example, say you owe $50,000, you can offer them $5,000 and negotiate a settlement.
Before or after the foreclosure? I would like to handle something before the foreclosure.
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,851
466
1,000
49
Southern California
www.loansafe.org
You can work on a settlement before foreclosure and release your liability by settling. This would legally take you off the mortgage as well so you would not have a foreclosure on your record.
 

Lory

LoanSafe Member
Apr 2, 2016
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Hi there,
I posted in another thread but it is much older than this thread. We are trying to settle our charged off BOA equity line. My husband offered $5,000 for $90k. It is still with BOA's recovery department. She said no way but did say she could do half. My husband is fine just waiting but I am a worry wart. Have you heard of BOA doing a lot of wage garnishing over these charged off equity lines? Or lawsuits? We just want to settle and move on but I'm afraid of what they may do as most of what I have read here is quite a bit older than 2016...I guess I'm wondering if they are no longer settling. Thank you so much
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,851
466
1,000
49
Southern California
www.loansafe.org
Hi there,
I posted in another thread but it is much older than this thread. We are trying to settle our charged off BOA equity line. My husband offered $5,000 for $90k. It is still with BOA's recovery department. She said no way but did say she could do half. My husband is fine just waiting but I am a worry wart. Have you heard of BOA doing a lot of wage garnishing over these charged off equity lines? Or lawsuits? We just want to settle and move on but I'm afraid of what they may do as most of what I have read here is quite a bit older than 2016...I guess I'm wondering if they are no longer settling. Thank you so much
Hello,

Yes, I have heard they have, but I have not had many reports here in the LoanSafe forum. Most members settle in the 10-20% range.

I think they will settle, but they are just playing games. This is a lot like poker. Lots of bluffing and posturing. You have to just play a bit stupid and keep in the game. Always act like poor me we have no money and if we settle, we will give you everything.

I would try not to worry and stay calm. Things almost always work out sooner or later.
 

Lory

LoanSafe Member
Apr 2, 2016
18
2
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48
Thank you for having this place for everyone to explore and learn from. It makes us feel less alone in all of this.
 
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Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,851
466
1,000
49
Southern California
www.loansafe.org
You are welcome Lory :)
 

db760

LoanSafe Member
Nov 25, 2009
12
1
3
The bank approved the deed in lieu. They want to give me a 1099c in the amount of $171k because they did a appraisal that came in at $28k. I have owned this house since 1997 has been a rental for 7 years except the last 3 it has been vacant because of the fire and is in California. I had a $40k and $50k offer during the short sale and both were turned down. The home is worth $60k now but the appraiser did it as land only. Two questions do you think I can get the bank to raise the value and in turn lower the deficiency.....I don't want to rock the boat and them cancel the deed in lieu that they want finished in 14 days. How much tax will I owe the IRS........and will the full amount be owed for 2016 tax year?
 

db760

LoanSafe Member
Nov 25, 2009
12
1
3
My DIL was assigned to a closing specialist yesterday. How do I negotiate to have my DIL reported on my credit as paid and all my late payments removed?