How To Settle 2nd Mortgage When Chase Won't Negotiate - Help !!

Linsey

LoanSafe Member
Apr 5, 2014
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Please help. We are trying to settle our underwater 2nd mortgage of $44,000 with Chase. Our home is ~$50,000 underwater (home value around $345,000). We owe $353,000 on our 1st also held with Chase. We filed Chap 7 Bankruptcy in Dec 2013 and both loans have been charged off. We are current on our 1st mortgage but have not paid our 2nd in 1 year. We tried to get a settlement before (and during) the Chap 7 Bankruptcy but we were told we would have to wait until Chap 7 Bankruptcy was completed. Just this past month I contacted Chase with a settlement offer of $5,000 for our 2nd. I called to reach the settlement department so we could negotiate and they told me due to the new "Regulation-X" laws (effective Jan 2014) I could not speak with the settlement department and they would send a letter in the mail. I even spoke with the escalation department to confirm I could not speak with settlement department. The escalation department even made me send a letter opting out from all modification options other than settlement but in the end they told me my $5,000 offer was denied. I follow up to see what number they would agree to settle for and they would not give me a number but said I would get a letter in the mail. I received a letter today indicating that I have the option to reinstate the loan ( pay the total amount I owe in one lump sum by a specific date) and the next step would be to call and find out the amount I would need to send to reinstate. In no way would I reinstate the loan since it has already been discharged in Chap 7 Bankruptcy. Right? My Chap 7 Bankruptcy lawyer specifically said to try and get a settlement. What is the next step to obtaining a settlement since they will not negotiate with me and are just trying to get me to reinstate. Should I just not make contact with them and see if they come around? Offer a slightly higher settlement of $6 or $7,000? Get a lawyer to help settle?
Thanks, Lindsey
 
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Moe Bedard

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Hi Kinsey,

This is just part of the negotiation game. This is common.

My understanding is that the Chapter 7 discharges any deficiency debt if they were to take back the house and sell it at auction for less than the mortgage. If you didn't and don't sign a reaffirmation agreement, the Chapter 7 protects you against the deficiency even if you filed bankruptcy prior to any foreclosure action. When your house is underwater, Chapter 7 can really work in your benefit because it puts you in a better position with a 2nd mortgage to settle.

You just have to be patient with the process. But also, nothing is guaranteed.
 
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Manderik

LoanSafe Member
Nov 8, 2012
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I have a similar problem with my Chase 2nd but have not filed for BK.

California... 1st Ocwen for$136,000 and 2nd Chase HELOC for $158,000
Haven't paid in 16 months. They want approx. $9,000 to re-instate the loan.
Approximate Value of home is $300,000

They have scheduled a sale date for the property 4/30/14.. I verified by locating it on the aution.com website.

The foreclosure rep at Chase said settlement may be an option but only if there is not equity in the property.
They asked me to send an offer letter, hardship letter, financials, and proof of funds.

I tried following the settlement guidelines on my 2nd but since values went up the strategy didn't work.

They asked me to make a worthwhile offer but not sure how much that would be since I owe what the home is worth.

Any help would be appreciated
 

duderino

LoanSafe Member
Feb 2, 2010
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Manderik,

Appreciate the update. Im still underwater but there is equity after the first and they have threatened my with foreclosure but they have not set a sale date yet. I havent paid in 12 months and I am also current on my first. They keep saying that they could just sell it and make more money after paying off the 1st mortgage than my offer. I just keep calling their bluff. They want 30 percent and all I have offered is 5 percent and thats all I can really afford. They keep sending me loan mod financial docs and I just dont send them back. I have never got a settlement offer from them. Their offer of 30 percent was over the phone after my hardship email to chase executive offering the 5 percent. I wish I would have done this 2 or 3 years ago but just was not in the mindset to do this sort of thing.

So I am just waiting it out. I think in your scenario you just have to think how much you like your home. What I find interesting is that your dang even on the value vs what you owe and financially it does not make sense for them to send it to auction unless you are grossly under valuing your home.

For me im roughly the same behind to bring current but I owe about 60 k more than what zillow says its worth. The last BPO done which i still think is high im 140 upside down as a whole but after the first about 90k equity and that before what it would cost for chase to foreclose which the folks on here estimate to be about 40-50k. So you take that same 40-50k and at that to your home it just does not make sense.

So I wish the best of luck to you. Perhaps a lawyer may help. You have got me curious on what may happen in my scenario.

the dude
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
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I have a similar problem with my Chase 2nd but have not filed for BK.

California... 1st Ocwen for$136,000 and 2nd Chase HELOC for $158,000
Haven't paid in 16 months. They want approx. $9,000 to re-instate the loan.
Approximate Value of home is $300,000

They have scheduled a sale date for the property 4/30/14.. I verified by locating it on the aution.com website.

The foreclosure rep at Chase said settlement may be an option but only if there is not equity in the property.
They asked me to send an offer letter, hardship letter, financials, and proof of funds.

I tried following the settlement guidelines on my 2nd but since values went up the strategy didn't work.

They asked me to make a worthwhile offer but not sure how much that would be since I owe what the home is worth.

Any help would be appreciated
It looks like you have just a tiny bit of equity, but that would be quickly eaten up in a foreclosure. It costs a bank on average $50,000 or so to take back a home, sell, pay fees, upkeep, commissions to agents etc.

What state are you in Manderik?
 

Manderik

LoanSafe Member
Nov 8, 2012
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Moe, State of California... any insight is appreciated.

Dude... Looks like they are pursuing the Auction route on my home... They have my home valued close to $260,000 based on my conversation with the foreclosure representative. Foreclosure figures don't make sense according to this thread.

I believe they will get approximately $220,000 at an auction (from an investor) for my home and after paying the 1st they will have left over $84,000.

The second is almost $160,000 and I don't believe they will be able to get the market value of $300,000 at an auction.
 

Moe Bedard

Call 1-800-779-4547
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Aug 10, 2007
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Sure Maderik, and have you looked into bankruptcy? A chapter 13 bankruptcy will allow you keep your property and repay your debt over 3 or 5 years. This will allow a payment plan approved by the court and not the bank.
 

duderino

LoanSafe Member
Feb 2, 2010
79
1
8
update on my situation. Similar to Manderik. Got 9 certified letters today.

Chase/Northwest trustee services has filed a NOD.

My first 165000 refied with a HARP 2.0 last year with GMAC,

My second with chase 250k.

Last BPO of 270k.

Have not paid in just at a year and they filed a NOD. It goes against everything that the settlement strategy says about when a second lien holder will actually foreclose on the property.

I think I am going to just apply for an in house modification at this point. If they say no to that then bring the loan current and hope values rise enough. I really do like where I live but hate being sooo underwater but Im not going to uproot the kids at this point. I have successfully settled a majority of my credit cards so thats a positive I was just hoping this could happen too. It was poor timing on my part. Should have done this back in 2010.

the dude
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
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Interesting Dude, and thanks for sharing. Times are changing....

I wish you the best on your loan modification and with being 140K under water, hopefully that should be on your side during the loan modification process.
 

duderino

LoanSafe Member
Feb 2, 2010
79
1
8
thanks moe. got an appt with the mod center for tommorow afternoon. see what they say as far as a mod goes.

there have been in house mods other members have received like having forebeared a certain percentage of their loan and then locking up another portion until sold or refinanced and then taking the balance over 30 years at a low fixed rate. At this point i would love one of those.
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
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Southern California
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My pleasure Duderino.

Yes, there have been some sweet loan modifications here on LoanSafe. Focus your thoughts on exactly what you want and make it happen.

Please keep us posted on your progress.
 

TomEason

LoanSafe Guide
Jun 18, 2009
12,390
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SF Bay Area CA
Please help. We are trying to settle our underwater 2nd mortgage of $44,000 with Chase. Our home is ~$50,000 underwater (home value around $345,000). We owe $353,000 on our 1st also held with Chase. We filed Chap 7 Bankruptcy in Dec 2013 and both loans have been charged off. We are current on our 1st mortgage but have not paid our 2nd in 1 year. We tried to get a settlement before (and during) the Chap 7 Bankruptcy but we were told we would have to wait until Chap 7 Bankruptcy was completed. Just this past month I contacted Chase with a settlement offer of $5,000 for our 2nd. I called to reach the settlement department so we could negotiate and they told me due to the new "Regulation-X" laws (effective Jan 2014) I could not speak with the settlement department and they would send a letter in the mail. I even spoke with the escalation department to confirm I could not speak with settlement department. The escalation department even made me send a letter opting out from all modification options other than settlement but in the end they told me my $5,000 offer was denied. I follow up to see what number they would agree to settle for and they would not give me a number but said I would get a letter in the mail. I received a letter today indicating that I have the option to reinstate the loan ( pay the total amount I owe in one lump sum by a specific date) and the next step would be to call and find out the amount I would need to send to reinstate. In no way would I reinstate the loan since it has already been discharged in Chap 7 Bankruptcy. Right? My Chap 7 Bankruptcy lawyer specifically said to try and get a settlement. What is the next step to obtaining a settlement since they will not negotiate with me and are just trying to get me to reinstate. Should I just not make contact with them and see if they come around? Offer a slightly higher settlement of $6 or $7,000? Get a lawyer to help settle?
Thanks, Lindsey
I recommend you follow the guide at post #1 of the following thread. Pay particular attention to the last part pertaining to bankruptees.

http://www.loansafe.org/forum/threads/strategy-for-settling-your-2nd.37996/
 

Linsey

LoanSafe Member
Apr 5, 2014
6
2
1
40
Thanks TomEason. I had my lawyer send a letter authorizing Chase to contact me back in October 2013. In January I had someone call about modification which I informed them I was not interested in. They informed me that due to the new Regulation X laws that I could not speak with the settlement department. I though that this was crazy since just last august before our chapter 7 I spoke with the settlement department and they said they would settle for 13K. At that time I did not have 13K and just starting the process of filing chapter 7. After probing a bit more they said I could send in a settlement offer but would also have to send in a written letter saying I would opt-out from all other options including modification in order to comply with regulation X. Does anyone have experience with regulation X laws? After 3 months I finally got a letter saying my offer was declined but that I could reinstate the loan. The letter said I should respond by April 11th. I have not responded or called. Yesterday they left a message saying they were calling from Chase home finance and for us to call immediately. I have not called. I am curious as to what they will say. I wonder if they are following up with the letter offering reinstatement or if maybe, just maybe they are willing to start settlement negotiations. Advice appreciated and welcomed. Thanks !!
 

Manderik

LoanSafe Member
Nov 8, 2012
32
0
6
Manderik,

Appreciate the update. Im still underwater but there is equity after the first and they have threatened my with foreclosure but they have not set a sale date yet. I havent paid in 12 months and I am also current on my first. They keep saying that they could just sell it and make more money after paying off the 1st mortgage than my offer. I just keep calling their bluff. They want 30 percent and all I have offered is 5 percent and thats all I can really afford. They keep sending me loan mod financial docs and I just dont send them back. I have never got a settlement offer from them. Their offer of 30 percent was over the phone after my hardship email to chase executive offering the 5 percent. I wish I would have done this 2 or 3 years ago but just was not in the mindset to do this sort of thing.

So I am just waiting it out. I think in your scenario you just have to think how much you like your home. What I find interesting is that your dang even on the value vs what you owe and financially it does not make sense for them to send it to auction unless you are grossly under valuing your home.

For me im roughly the same behind to bring current but I owe about 60 k more than what zillow says its worth. The last BPO done which i still think is high im 140 upside down as a whole but after the first about 90k equity and that before what it would cost for chase to foreclose which the folks on here estimate to be about 40-50k. So you take that same 40-50k and at that to your home it just does not make sense.

So I wish the best of luck to you. Perhaps a lawyer may help. You have got me curious on what may happen in my scenario.

the dude
Dude, I got am in settlement negotiations, gave them financials and they want 120k and don't want to budge... negotiator said home is valued at 309,000. I owe 295k between both loans, 157,000 on 2nd alone.

What is the email to the executive team to see if they can help.. I countered 70k but can't come up with more, negotiator said they will not accept less than 120k and didn't want to submit the offer.

Help? Foreclosure set for month end 4/30/14
 

Michael Naz

Michael Naz
Jan 9, 2011
2,965
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48
Southern California
Manderik, tough situation to be in, your home is worth more, the executive team 800-853-8516 will not help you postpone the sale. i suggest preparing for bk 13 by getting an attorney, then getting a full appraisal and working it out in bk based on home value. bk 13 is reorganization of debt you may get a better deal in bk 13. if you need a bk referral contact local state or county bar association. - michael
 

duderino

LoanSafe Member
Feb 2, 2010
79
1
8
manderik,

your home is worth more than you owe. Plain and simple.

For me. The "strategy for settling your second" does not work if you have substantial equity past your first. These need to be treated like "in the money" loans. It did not work for me even though all the long folks on the site said Chase wont foreclose. They have files a NOD.

Im currently working with LoanModHelpCenter for a in house modification. I like where I live an have stabilized the situation with my family over the past two months. Even if nothing can be done from LoanModHelpCenter I still should be good for awhile.

Sorry to hear about your issues Manderik but perhaps a short sale is your best option or a BK.
 

despritfreya

LoanSafe Member
Sep 8, 2011
369
53
28
gave them financials and they want 120k and don't want to budge... negotiator said home is valued at 309,000. I owe 295k between both loans, 157,000 on 2nd alone. I countered 70k but can't come up with more, negotiator said they will not accept less than 120k and didn't want to submit the offer. Foreclosure set for month end 4/30/14
I have said this a couple of times before but I am going to say it again. Folks who either ignored their 2nds or who thought "no big deal, I will just cash it out" are now in trouble - and, quite frankly, as an attny, I rolled my eyes each time I read how folks were simply doing nothing. Like any investment, value goes up and down. This Country is on the upswing in the housing market (no different from any other down-turn and then recovery - your typical bell curve that happens every 7 to 10 years) and lenders are going to become more and more reluctant to allow homeowners to wheel and deal at the lender's expense - right or wrong.

If you cannot come up with the funds the lender wants there is nothing you can do to force it. Some have suggested filing a Chapter 13 which can help you save the home BUT (and assuming the property is your principal residence). . .

1. You MUST file the case BEFORE the foreclosure;
2. Your Chapter 13 Plan MUST provide for the curing of ALL arrears (1st and 2nd); and
3. You MUST resume BOTH mortgage payments (1st and 2nd) as of May 1, 2014.

That's the law. You will not be cramming down or stripping off that 2nd mortgage since there is equity in the property well over what is owed to the 1st mortgage. You will simply resume regular payments as though you were current and use the Chapter 13 Plan to bring the missed payments current over the next three to five years.

You now need to meet with a bk attny since your foreclosure is just days away.

Des.
 
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Linsey

LoanSafe Member
Apr 5, 2014
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I have said this a couple of times before but I am going to say it again. Folks who either ignored their 2nds or who thought "no big deal, I will just cash it out" are now in trouble - and, quite frankly, as an attny, I rolled my eyes each time I read how folks were simply doing nothing. Like any investment, value goes up and down. This Country is on the upswing in the housing market (no different from any other down-turn and then recovery - your typical bell curve that happens every 7 to 10 years) and lenders are going to become more and more reluctant to allow homeowners to wheel and deal at the lender's expense - right or wrong.

If you cannot come up with the funds the lender wants there is nothing you can do to force it. Some have suggested filing a Chapter 13 which can help you save the home BUT (and assuming the property is your principal residence). . .

1. You MUST file the case BEFORE the foreclosure;
2. Your Chapter 13 Plan MUST provide for the curing of ALL arrears (1st and 2nd); and
3. You MUST resume BOTH mortgage payments (1st and 2nd) as of May 1, 2014.

That's the law. You will not be cramming down or stripping off that 2nd mortgage since there is equity in the property well over what is owed to the 1st mortgage. You will simply resume regular payments as though you were current and use the Chapter 13 Plan to bring the missed payments current over the next three to five years.

You now need to meet with a bk attny since your foreclosure is just days away.

Des.
Thanks Des,
You pointed out a very good fact. I live in California and house values are rising. Currently we are underwater but only slightly. My concern is that the reason they are not willing to start settlement negotiations with us is that Chase knows eventually the home worth more. Since they have a lien on the home (despite being charged off in Chapter 7 ) they will preceded with foreclosure once it makes financial sense. In our case the home would need to rise another 60 K ( 10K to make us even and 50K for foreclosure costs) assuming I have an accurate appraisal. Many of the forums suggest just waiting it out but I do worry that by delaying settlement that I might not get a settlement at all. Times are changing. We got out tax refund and so now I can offer them $10,000 on our $44,000 second which is 22%. I was debating on waiting another few months to offer this to them especially since it has been nearly impossible to speak to a settlement negotiator. Not sure what to do ? Avoid them, contact them, get a lawyer to help settle?
Thanks,
Linsey
 

despritfreya

LoanSafe Member
Sep 8, 2011
369
53
28
Linsey,

This certainly is a tough call. I do not like the idea of waiting unless you are willing to recognize that should no settlement be reached you are willing to walk away or spend the financial resources to save the home through a Chapter 13. (You doing the 7 does not preclude you from filing a 13 in most instances - you simply won’t get a discharge but, since you probably recently did your 7, you should not need a discharge - discuss this with a local attny.)

Further, having the cash to put a proposal on the table now is good. Waiting means you may have spent that little nest egg and not have the bargaining chip in the future. On the other hand, if you milk the property for all it is worth by not paying the mortgage(s) and then walk away you will save a ton of money.

Des.
 
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Manderik

LoanSafe Member
Nov 8, 2012
32
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Some very good points have been brought up.

Based on all the success stories I thought Chase would be willing to negotiate... I never fell behind on 1st just my 2nd.

Des, bases on your experience, without a Bk, will chase negotiate on the 120k they are asking for. I may be able to get 100k.

Auction sale date was postponed until the end of next month.