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

despritfreya

LoanSafe Member
Sep 8, 2011
369
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28
Manderik,

In response to. . .

"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".


I really cannot answer your question since that is not my area of expertise - negotiating outside of a bk. With or without a bk, what is the worst thing that can happen. . . Chase says "no deal". The problem is that the foreclosure is coming up very fast and if the lender does not postpone again and you have not filed bk before the property is lost to a foreclosure, it won't matter - since you are in California the foreclosure is non-judicial. There is no "redemption period" therefore, once that hammer falls and the "bid price" is paid, you will lose all strings to the property. Once all strings are lost a bk won't help.

Have you talked to a bk attny?

As a practical matter how are you getting $100k? Borrowing it from a friend or family member? Borrowing it from your retirement? Maybe closing out a 401k or IRA. Do you really want to sink that kind of cash into the home? Can the $$ be put to better use? Is the home really worth it? There are lots of things to think about and I always want my people (clients or potential clients) to really think about what they are doing before they do it.

Des.
 

Linsey

LoanSafe Member
Apr 5, 2014
6
2
1
39
Hi all,
Update on our settlement. After waiting 30 days and receiving a 3 modification packets and two phone calls from chase which I did not respond to I decided to call chase to settle. We got our tax refund and now can offer $8,500. When I called they connected me with the loss and mitigation department and said they would be the department that would handle a settlement on the charged off debt. Wow- for the first time they understand that I don't want to modify my loan I want to settle. I spoke with my lawyer last week and he agreed that a chapter 13 strip after our chapter 7 ( Chapter 20) would be a reasonable option if we have no equity but said a settlement would be easier. So I got the ball rolling and I was assigned to a customer assistance person and after a brief conversation about our intentions and option to file for chapter 13 to strip second mortgage I offered him $8,500 to settle. He took a few moments and said that the last drive by assessment of our home valued it at $419,000. I told him no way that it was worth that much. I spoke with a local real estate agent a few weeks back and she confirms that while most of California is recovering quickly out little town of 5,000 people is not bouncing back as quick and if our home would sell for top dollar the max it would get would be high 300's not $419,000. We owe 352k on the first and 44K on the 2nd for a grand total $396,000. Zillow reports our home is worth $340,000. I'm not sure if they are just trying to mess with me but their value and my value are $79,000 apart. Even if it is worth $400K , they are not going to get top dollar selling it as a foreclosure and they will have to pay foreclosure fees which will be 40-50K. I told him if my house was truly worth that much then the bank would have already been after me to foreclose. The last professional inspection was back in Jan 2010 when we did a HARP refinance and it was valued at $330,000 , approx. 37 K over what Zillow was reporting. If I make the same projection now, Zillow says $340 +37K the value would be $377. He said in order to proceed they would need to come and perform an interior 5-10 minute inspection to asses the homes value. He said they would contact me in the next 10 days. Not sure if I should let them perform an interior inspection (might just be more fuel for their fire)?? Should I pay for my own independent appraisal? Advice needed !!!
 

Barbapapa

LoanSafe Member
Sep 5, 2012
7
0
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I wouldn't waste effort with an independent appraisal. Chase is likely saying what they are in order to spook you and seems to be working. They have trained negotiators to deal with you and prefer to communicate by phone to keep that advantage. They can now sit back while you stew and are more receptive in 10 days.
 

Linsey

LoanSafe Member
Apr 5, 2014
6
2
1
39
I am happy to update you that we have agreed to a settlement !! I called today and we agreed to $12,170 ( which is 27%). I am very happy to have this over. I have been working on this for 1 year ! I asked for the settlement in writing and Chase said they would send a letter in the next 72 hours via the mail and I have until 6/16/14 to send the money. Any suggestions or advice on this next step. What should the letter say exactly? Suggestions on which method will be best to send the money ( cashiers check?). I'm so close I don't want to mess up now.
Thanks,
Linsey
 
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Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
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Congratulations Linsey!

The letter that Chase will send you should have the correct verbiage that you are looking for in regards to the loan payoff and release of lien. Just make sure you look over it carefully and if you want to run it by us when you receive it, then please do so. Yes, the best method to pay is a cashier's check.

Please keep us posted on your progress.
 

Linsey

LoanSafe Member
Apr 5, 2014
6
2
1
39
Hi,
Ok I finally got the letter today. Here is what the letter says:
"Settlement agreement confirmation
account: ######
balance: $44,000
Property address: #### street
Dear Mr. Smith,
We are writing to confirm our agreement to accept a settlement on the account referenced above.
As agreed, the total amount due is $12,170.00. We must receive this amount no later than June 16, 2014 or this offer will be withdrawn.
After we receive the required funds, we will release our lien on the property and forgive any remaining deficiency balance on your account. You can send payments by wire transfer using the following information:
Wire Number :#####
Include your full account number and the word " recovery" on payment.
Please be aware that the completion of this transaction is reported to various consumer reporting agencies as "settled" and may have an adverse effect on your credit rating.

Sincerely,
Loan officer name "​

Does everything look legit? Should I send it via wire or get a cashiers check? Since we claimed Chapter 7 will it matter that my credit report will say "settled" ?
Thanks,
Linsey
 

Hopefull2009

LoanSafe Member
Feb 21, 2009
458
10
18
Hi,

Does everything look legit? Should I send it via wire or get a cashiers check? Since we claimed Chapter 7 will it matter that my credit report will say "settled" ?
Thanks,
Linsey
If it was already discharged in your Chapt 7, they shouldn't be reporting anything as far as your credit report. It was the lien that survived the BK, not the debt responsibility. They should just release the lien as it states and leave your credit report alone.
 

bobinwa

LoanSafe Member
Nov 23, 2013
28
4
3
Here is an update on my Chase HELOC experience. I would appreciate any advice on tactics to get the settlement down more towards $14K, thanks. (see the Update par below my initial post at http://www.loansafe.org/forum/threads/help-current-w-1st-strategic-default-on-2nd-heloc-w-chase-ca.37745/page-5#post-508086

Bob


I've been reading through many of the threads on this board and thanks to all for the great info and experience. I'm just starting my journey with a Chase HELOC in 2nd position with a balance of $140,000. This is totally underwater since my firs with Wells Fargo barely covers my home's value. I'm now 3 months late and getting the "starter kit" of collection letters and phone calls. Not answered the phone nor responded to the letters. Following TomEason's post on how to handle this with my goal to negotiate this down to 5% of balance owed. Being a self employed real estate investor with most of my properties underwater, cashflow has been dismal. I stopped paying my $980/month health care insurance bill as well since the new healthcare act qualifies me as poverty level so we will get Medicaid starting in January. :^)


Update:
I just got an offer from Chase on my HELOC delivered via UPS. The UPB on my loan is $140,712, their "LET"S SETTLE" offer is $21,106 if I remit payment by 10/28/14. I don't have that cash but could probably find/borrow it to settle. My goal was to go down to $14K to settle. Does anyone have thoughts on what tactics to deploy at this time to negotiate-down the payoff? Fyi Im current on my first with Wells Fargo and the HELOC is under water based on my current market value. Any thoughts or suggestions are appreciated.
 

clakeca

LoanSafe Member
Oct 22, 2009
153
3
18
Here is an update on my Chase HELOC experience. I would appreciate any advice on tactics to get the settlement down more towards $14K, thanks. (see the Update par below my initial post at http://www.loansafe.org/forum/threads/help-current-w-1st-strategic-default-on-2nd-heloc-w-chase-ca.37745/page-5#post-508086

Bob


I've been reading through many of the threads on this board and thanks to all for the great info and experience. I'm just starting my journey with a Chase HELOC in 2nd position with a balance of $140,000. This is totally underwater since my firs with Wells Fargo barely covers my home's value. I'm now 3 months late and getting the "starter kit" of collection letters and phone calls. Not answered the phone nor responded to the letters. Following TomEason's post on how to handle this with my goal to negotiate this down to 5% of balance owed. Being a self employed real estate investor with most of my properties underwater, cashflow has been dismal. I stopped paying my $980/month health care insurance bill as well since the new healthcare act qualifies me as poverty level so we will get Medicaid starting in January. :^)


Update:
I just got an offer from Chase on my HELOC delivered via UPS. The UPB on my loan is $140,712, their "LET"S SETTLE" offer is $21,106 if I remit payment by 10/28/14. I don't have that cash but could probably find/borrow it to settle. My goal was to go down to $14K to settle. Does anyone have thoughts on what tactics to deploy at this time to negotiate-down the payoff? Fyi Im current on my first with Wells Fargo and the HELOC is under water based on my current market value. Any thoughts or suggestions are appreciated.
Bob,
I got the same letter, same timeline, different amount. I couldn't get the money until March. I spoke with the Rep and she told me that it was a "one time offer." She then told me that, if I were to pay later, it would cost more and I would have to provide financials. I also had asked her to send me a revised offer letter which would state that the lien would be extinguished, not "may be extinguished." I have asked twice for this type of letter, which they told me they would do, like they have had to do for many others..never received that letter. So, just in limbo, wondering about the future etc.
Thanks
 

bobinwa

LoanSafe Member
Nov 23, 2013
28
4
3
The rep at Chase called me yesterday after I left a message with him. I told him that the $21K offer was great but I did not have the funds, and I can put together $9500 to pay off the debt. He said that the $21K was their bottom line offer and that decision was made 2 levels above him so his hands are tied. Basically did a pushback using the "I don't have the authority to negotiate with you" tactic. I basically said that Chase may want to consider getting a portion of something rather than 100% of nothing and we basically left it at that and closed the call. He did mention that if I wanted to pay the $21K off over a few months they would charge an additional 10% fee. I mentioned that my property taxes have not been paid for the past 2 years and any funds in addition to the $9500 that I have will be used to pay down my prop tax liability so the county does not foreclose and wipe out both Chase and the senior lender. So on we go in limbo....

Bob,
I got the same letter, same timeline, different amount. I couldn't get the money until March. I spoke with the Rep and she told me that it was a "one time offer." She then told me that, if I were to pay later, it would cost more and I would have to provide financials. I also had asked her to send me a revised offer letter which would state that the lien would be extinguished, not "may be extinguished." I have asked twice for this type of letter, which they told me they would do, like they have had to do for many others..never received that letter. So, just in limbo, wondering about the future etc.
Thanks
 

clakeca

LoanSafe Member
Oct 22, 2009
153
3
18
The rep at Chase called me yesterday after I left a message with him. I told him that the $21K offer was great but I did not have the funds, and I can put together $9500 to pay off the debt. He said that the $21K was their bottom line offer and that decision was made 2 levels above him so his hands are tied. Basically did a pushback using the "I don't have the authority to negotiate with you" tactic. I basically said that Chase may want to consider getting a portion of something rather than 100% of nothing and we basically left it at that and closed the call. He did mention that if I wanted to pay the $21K off over a few months they would charge an additional 10% fee. I mentioned that my property taxes have not been paid for the past 2 years and any funds in addition to the $9500 that I have will be used to pay down my prop tax liability so the county does not foreclose and wipe out both Chase and the senior lender. So on we go in limbo....
Bob,
I too was told, over the phone, that I could pay the amount over time, but, the amount would increase from $10,000 something (I told them that I could pay the total this coming March) by another $4,000 or so--and they would need to see my financials. I plan to start negotiating, stressing that, if they want to settle, I am willing to cash out a retirement account--and lose money in the deal. I can't understand why they need to "punish me" by "requiring sanctions" if it takes me a few months to get the funds. I wonder who is setting the parameters regarding payback scenarios.
 

clakeca

LoanSafe Member
Oct 22, 2009
153
3
18
Bob,
I too was told, over the phone, that I could pay the amount over time, but, the amount would increase from $10,000 something (I told them that I could pay the total this coming March) by another $4,000 or so--and they would need to see my financials. I plan to start negotiating, stressing that, if they want to settle, I am willing to cash out a retirement account--and lose money in the deal. I can't understand why they need to "punish me" by "requiring sanctions" if it takes me a few months to get the funds. I wonder who is setting the parameters regarding payback scenarios.
Bob and Others,
My first and second are with Chase. After filing Chapt. 7, and successfully modifying my first with Chase, my second with them is still out there and was "charged off" and in Five Lakes Agency's hands. But, a couple of months ago, Chase took back management of the second and began to contact me via mail and an "Offer to settle." I have a great modification on my first mortgage with them..but afraid they may fc because they own the first. Any thoughts?
Thanks
 

clakeca

LoanSafe Member
Oct 22, 2009
153
3
18
The rep at Chase called me yesterday after I left a message with him. I told him that the $21K offer was great but I did not have the funds, and I can put together $9500 to pay off the debt. He said that the $21K was their bottom line offer and that decision was made 2 levels above him so his hands are tied. Basically did a pushback using the "I don't have the authority to negotiate with you" tactic. I basically said that Chase may want to consider getting a portion of something rather than 100% of nothing and we basically left it at that and closed the call. He did mention that if I wanted to pay the $21K off over a few months they would charge an additional 10% fee. I mentioned that my property taxes have not been paid for the past 2 years and any funds in addition to the $9500 that I have will be used to pay down my prop tax liability so the county does not foreclose and wipe out both Chase and the senior lender. So on we go in limbo....
Actually, I'm not sure what kind of boat I'm in:
A few years ago, I received a HAMP and HAMP2. These helped, but the HAMP2 was interest only and I couldn't see every paying the debt off.
Then, a couple of years later, I filed BK13, primarily to strip the second mortgage. Yet, I couldn't afford the $900 per month payments to the county trustee. So, my BK13 was converted to a Ch.7. So, I still have the second totally $67,000.

During the BK process, I applied for a Chase modification, due to new laws/national settlement. Chase, who holds my first and second mortgage, did an "in-house" killer modification of my first mortgage:
2% for remaining loan, and principal reduction of $60,000 each year for 3 years..totaling $180,000.
This meant that I could actually afford my dream home and retire in a few years. Truly a lotto win of my life! I am very, very grateful.
Thus, I have been religiously on time with my first, since obtaining my modification.
Yet, the Chase second had been charged off and sent to Five Lakes Agency, and then sent back to Chase. I received a settlement letter to settle the second for $10,000. in Sept.--due by end of Oct. I was told that their offer was a "one-time deal." I called and told them, that I could do this in March of 2015. They told me that, if I were to pay later, that it would cost me more, and that, they would need to obtain financial information from me. I will have to cash out a retirement account, losing money on the deal, yet keep my home, which is money well placed. Yet, values are increasing...I just want to affordably and effectively stave off any foreclosure by Chase's second.
  • After the next principal reduction (second one) of $59,600 next month, my principal first balance will be $359,900.
  • My second mortgage is still $67,500 (not including accrued interest over years of not paying).
  • Home is now "valued" between $400-$475,000. (Zillow/Chase Home Valuation)
I have read the strategies about settling seconds. I have read that foreclosure costs the lender approx. $50,000.
I have even read the cool stories about seconds being extinguished. So, I may be still underwater..but getting close. My second was a purchase money second, and I am in California, if that matters. I planned to start dealing with this...but I am nervous of course about how to do this correctly. I don't want to mess this up. I also wonder about Chase owning both loans. They gave me a great deal on one, and the other is still out there, unresolved.
Any advice would be welcome.
Thanks
 

Sandra Marine

LoanSafe Member
Mar 17, 2015
1
0
1
50
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
 

driftwood

LoanSafe Member
Sep 17, 2012
315
38
28
So if the 2nd is FC'ing then Chase must believe the value of the property is clear of the remaining balance as well as the fees/cost associated with a FC sale. I would try to see if Chase will tell you what they believe the property is worth. By your statement I would say Chase is going to lose money with a FC since they will not recover fees and expenses which is roughly in the neighborhood of $40-50K. I would also get a local real estate agent to give you a BPO to see how it compares. This will be the most current approximation of the value. You might even tell the agent you want to know what the home would go for as a FC sale.

Once you know this you may have some leverage if the BPO shows the property would sell much less than the outstanding balances of the loans plus cost to FC. You can use that to help negotiate.

From there how you handle it will likely depend on your goal and if you want to stay in the home or eventually walk away.