Ocwen & National Credit Inc. - 2nd Mortgage Help Please

#1
First and foremost, I have been using these forums since 2009, and they have been INCREDIBILY invaluable! I saved our primary residence with a HAMP mod, and received a loan mod on a rental property thanks to these forums. I could not have done it without everyone’s assistance. I have posted my journey along the way to pay it forward, and I find myself back again.
Summary – Primary residence that we plan to live in forever (at least for now).
  • 1st Mortgage Modified (after 5 years of fighting) with BOA – HAMP
  • 2nd Mortgage – stopped paying in July 2010 – originally with GMAC/ now Ocwen (Note is US Bank)
  • Located in Washington State
  • This home is our primary Residence which we live in and want to stay
  • Balance of 1st mortgage and 2nd mortgage is currently a little more than market value – little to no equity
We received a letter yesterday from National Credit Inc. regarding our second mortgage. This is after NO COMMUNICATION from GMAC or Ocwen, since GMAC charged off the loan in January 2011. At that same time (in 2011), GMAC offered us a settlement for 20 cents on the dollar, but we did not have the $$$.

Nationwide Credit Inc. letter dated 5/23/2016 states “Ocwen is the entity responsible for the servicing of your Loan; however, the name of the creditor to whom the debt is owed is SYNCORA. Unless you, within 30 days after receipt of this notice, dispute the validity of the debt, or any portion thereof, the debt will be assumed to be valid by NCI”

The timing is coincidentally suspicious, since our last payment was July 2010, and the statute of limitations for written contract law in WA state is 6 years. This would remove their ability to foreclose; however, that option is limited due to the value of the home is approximately the amount owed on the 1st mortgage and the 2nd mortgage combined so it would make little to no sense to foreclose. Also, I read in HAMP guidelines that second mortgages can’t foreclose on a HAMP modified first mortgage.

Since we plan on living in the home, I would like to settle/extinguish the debt (perfect world, of course), and I have a few questions so I can formulate my strategy:
  • Do I send a QWR (via certified mail) disputing the debt to NCI, per their letter or is it another type of letter? Or, do I ignore the letter altogether?
  • With a HAMP first mortgage, can a 2nd mortgage holder foreclose?
  • Next, originally I was going to wait until July 2016 to reach out to Ocwen to discuss 2MP, since I have a HAMP mod on the first mortgage. This letter states all communication goes through Nataional Credit; however, there is nothing on my county records indicating this has been sold to anyone. I would prefer to discuss settlement or full extinguishment with Ocwen directly, especially since my loan and circumstances fit well in the 2MP guidelines. Can/should I talk to Ocwen directly?
  • Does anyone have any advice on settling/negotiating using the 2MP?
Thank you for any feedback you may have.
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
#2
Hello and welcome back. Glad we could be of service and thanks for the kind words.

If I were you, I would wait until the statute of limitation expires and ignore the letter for now which may fall in July 2016. You can tell them to not contact you again, and it's a good idea to put your request in writing. Please keep in mind that if you pay anything, you may restart the statute of limitation. You could reopen yourself up to collection efforts, or even a lawsuit.

Yes, the 2nd mortgage can still foreclose with a HAMP first mortgage, but it is highly unlikely unless you have a lot of equity. If you do, then yes, you may want to settle and or see if they get aggressive with you.

Nationwide Credit is just the debt collector and Ocwen still owns the mortgage. Therefor, Ocwen owns the lien and will be on title.
 
#3
Moe,

This forum has been a lifesaver! Many thanks!

OK, I will wait until July to reach out to Ocwen, and I definitely WON'T make any payments because you're right, it restarts the clock as you said.

I will let National Credit Inc. know in writing to not contact me again.

Moe, since I have a HAMP mod on the first mortgage, do you have any words of advice for me with the 2mp with Ocwen. Everything I have read states that they are notified of the HAMP first mortgage, and then reach out to me. I have heard nothing from them and was waiting until July. Any words of advice would be appreciated.

Thanks again for all of your help!

Alwayshopeful
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
#4
Good morning Alwayshopeful!~

It is my pleasure to help and it is people like you that we created this forum for. We also appreciate you telling your story.

2nd mortgage are always tough and they hardly ever comply with loan modification and or short sale requests. The only thing that I have seen them really work with homeowners are settlement offers. Lump sum settlements at 5-20% of the mortgage balance.

Most people just wait it out until they are contacted. If you reach out, it is a sign of weakness and will put you in the weaker position.
 

morgan2015

LoanSafe Member
#5
I received the almost same letter from NCI but I just modified in January of this year on my first mortgage and I got my first letter from NCI on 4/12/2016. I stopped paying on my second mortgage in August of 2015. So is my statute of limitations 6 years from that date in the state of Michigan? I'm still way underwater so from this post I am assuming I should just do nothing at this point and some day down the road someone will approach me with a settlement offer?? Is that correct? Thank you!!!
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
#6
I received the almost same letter from NCI but I just modified in January of this year on my first mortgage and I got my first letter from NCI on 4/12/2016. I stopped paying on my second mortgage in August of 2015. So is my statute of limitations 6 years from that date in the state of Michigan? I'm still way underwater so from this post I am assuming I should just do nothing at this point and some day down the road someone will approach me with a settlement offer?? Is that correct? Thank you!!!
Yes, my understanding is that it is 6 years statute of limitation. The strategy is to just sit tight and be patient. No need to rush. Just wait for them to contact you.
 

morgan2015

LoanSafe Member
#7
Ok thanks for the response! BUT...I got another letter from them today with an offer of $15,999 on a total of $54,000. I'm not planning to pay that much but should I contact them at this point or wait for the next offer that is closer to what I want? Thanks for your input!
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
#8
Not a problem.

Sure, I would contact them with a counter offer that is maybe a bit below what your maximum offer would be.
 
#9
Good morning Alwayshopeful!~

It is my pleasure to help and it is people like you that we created this forum for. We also appreciate you telling your story.

2nd mortgage are always tough and they hardly ever comply with loan modification and or short sale requests. The only thing that I have seen them really work with homeowners are settlement offers. Lump sum settlements at 5-20% of the mortgage balance.

Most people just wait it out until they are contacted. If you reach out, it is a sign of weakness and will put you in the weaker position.
I have some new information, and I would like your feedback/input.
Good morning Alwayshopeful!~

It is my pleasure to help and it is people like you that we created this forum for. We also appreciate you telling your story.

2nd mortgage are always tough and they hardly ever comply with loan modification and or short sale requests. The only thing that I have seen them really work with homeowners are settlement offers. Lump sum settlements at 5-20% of the mortgage balance.

Most people just wait it out until they are contacted. If you reach out, it is a sign of weakness and will put you in the weaker position.

Summary –
  • 1st Mortgage Modified (after 5 years of fighting) with BOA – HAMP
  • 2nd Mortgage – stopped paying in July 2010 – originally with GMAC/ now Ocwen. GMAC charged off in January 2011, after last payment was received July 2010. (Credit report to substantiate the last activity date & charge off date. Short pay letter received January 2011 from GMAC for 20% of loan balance)
  • Located in Washington State- non-recourse, and 6 year Statute of Limitations
  • This home is our primary Residence which we live in and want to stay
  • Balance of 1st mortgage and 2nd mortgage is currently a little more than market value – little to no equity
  • NCI Collection Letter Received 5/2016 for a balance of $343K+
New Activity:
  • MERS MIN Status = “inactive”
  • Received letter from OCWEN in December 2017 stating “Please note that the charge off was completed on May 23, 2016.” That is a lie, since I have my credit report and it shows the charge off date from GMAC is 1/2011.
Questions:
The same loan can’t be charged off twice, can it? I recently read an article where they are trying to jump ahead of these SOL’s in Washington state. (https://dsnews.com/uncategorized/10...mp-coasts-hitting-pacific-northwest-southwest
In the December 2017 OCWEN letter, they are clearly ‘trying’ to establish a new charge off date of May 23, 2016, instead of the GMAC charge off date of January 2011. The loan is no longer showing on my credit, but is still on title, of course.
What are my next steps? I want to take care of this so it is no hanging over me, but I want to be smart about it as well.
 

Turtle

LoanSafe Member
#10
Not a problem.

Sure, I would contact them with a counter offer that is maybe a bit below what your maximum offer would be.
Dear MOE,

I want to thank you for this forum... it has helped me quite a bit. I have a couple questions for you on my situation which is the following:

- I took out a 2nd TD on my principal residence in 2006 which is in California. I stopped paying the loan in 2008 when the market crashed
- In 2011 I received a letter from the servicer that the loan was charged off and that I would be receiving a 1099, which I did. They loan also is not showing up on my credit report any longer as well. I have never been contacted by them again or contacted by a collection company.

Questions:
1. Will this lien ever legally be deemed invalid due to SOL or lack of the creditor to protect their interest? If the lien will remain in perpetuity, does the interest on the loan keep being added to the payoff or does the fact that they charged it off in 2011 affect the accrued interest or stop it in any way?
2. Do you have any similar stories like mine you can share that would help me figure out what to do? The equity in the property has skyrocketed so at this point the value is sufficient to satisfy the 2nd TD in full ... can they still foreclose even though they charged it off?
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
#11
Hi Turtle,
Thank you for explaining your situation and I hope we can provide you the answers you are looking for.

I'm going to list your questions below and answer them to the best of my ability.

1. Will this lien ever legally be deemed invalid due to SOL or lack of the creditor to protect their interest? If the lien will remain in perpetuity, does the interest on the loan keep being added to the payoff or does the fact that they charged it off in 2011 affect the accrued interest or stop it in any way? - The lien will still exist and when you sell or refinance you will have to pay it off unless they seek out recovery of the debt via a foreclosure. In order for them to do this they have to satisfy the first lien or get them to agree to foreclose. In regards to the interest, from my knowledge they do have the ability to continue to collect interest after the loan is charged off but that is going to be creditor specific and I'm not sure if yours will or won't continue to accrue interest. It's really up to them unfortunately.

2. Do you have any similar stories like mine you can share that would help me figure out what to do? The equity in the property has skyrocketed so at this point the value is sufficient to satisfy the 2nd TD in full ... can they still foreclose even though they charged it off? The forum is getting more and more people in your situation and we have seen where the lien holders have been threatening homeowners recently due to the increase in home values. They want to be paid back and at some point they will come back to haunt you whether it's sooner or later. Yes they can still foreclose, see my comment above about how they would be able to do so.

Ultimately the great part about your situation is the lien has been charged off. If it was not charged off it would leave you with limited options to satisfy the debt. I have been able to successfully refinance many people within the LoanSafe community with charged off 2nd liens. In some cases borrowers have been able to get them to agree to a settlement, others we end up paying off in full.

If you have any questions directly related to refinancing a charged off 2nd lien, please feel free to e-mail me directly at [email protected] or give me a call at 619-379-8999. I work for a Federally licensed mortgage bank and can originate home loans across the country.
 

Turtle

LoanSafe Member
#12
Hi Turtle,
Thank you for explaining your situation and I hope we can provide you the answers you are looking for.

I'm going to list your questions below and answer them to the best of my ability.

1. Will this lien ever legally be deemed invalid due to SOL or lack of the creditor to protect their interest? If the lien will remain in perpetuity, does the interest on the loan keep being added to the payoff or does the fact that they charged it off in 2011 affect the accrued interest or stop it in any way? - The lien will still exist and when you sell or refinance you will have to pay it off unless they seek out recovery of the debt via a foreclosure. In order for them to do this they have to satisfy the first lien or get them to agree to foreclose. In regards to the interest, from my knowledge they do have the ability to continue to collect interest after the loan is charged off but that is going to be creditor specific and I'm not sure if yours will or won't continue to accrue interest. It's really up to them unfortunately.

2. Do you have any similar stories like mine you can share that would help me figure out what to do? The equity in the property has skyrocketed so at this point the value is sufficient to satisfy the 2nd TD in full ... can they still foreclose even though they charged it off? The forum is getting more and more people in your situation and we have seen where the lien holders have been threatening homeowners recently due to the increase in home values. They want to be paid back and at some point they will come back to haunt you whether it's sooner or later. Yes they can still foreclose, see my comment above about how they would be able to do so.

Ultimately the great part about your situation is the lien has been charged off. If it was not charged off it would leave you with limited options to satisfy the debt. I have been able to successfully refinance many people within the LoanSafe community with charged off 2nd liens. In some cases borrowers have been able to get them to agree to a settlement, others we end up paying off in full.

If you have any questions directly related to refinancing a charged off 2nd lien, please feel free to e-mail me directly at [email protected] or give me a call at 619-379-8999. I work for a Federally licensed mortgage bank and can originate home loans across the country.
Hi Erik,

Thank you for your thoughts on this issue! I have one follow up question if you don't mind. I ended up in 2013 modifying the 1st TD and the loan has been paid on time since then. Above you mentioned that the 2nd TD would need the 1st to be satisfied or need cooperation with the 1st to foreclose ... question is why would the 2nd need to satisfy the first when the loan is current or even need the 1st's agreement to foreclose? Can't the 2nd Foreclose without any agreement or cooperation from the 1st TD? Please clarify ...
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
#13
That is what I have always known to be the case, however I'm not an attorney and I would definitely advise speaking with one.
 

Jzone

LoanSafe Member
#14
Hi Erik,

Thank you for your thoughts on this issue! I have one follow up question if you don't mind. I ended up in 2013 modifying the 1st TD and the loan has been paid on time since then. Above you mentioned that the 2nd TD would need the 1st to be satisfied or need cooperation with the 1st to foreclose ... question is why would the 2nd need to satisfy the first when the loan is current or even need the 1st's agreement to foreclose? Can't the 2nd Foreclose without any agreement or cooperation from the 1st TD? Please clarify ...
Both the 1st and 2nd mortgage holders/lien holders must file a foreclosure action together in most states. The second can initiate proceedings, but if the 1st doesnt want to foreclose, they are not forced to.

Priority of liens establishes who gets paid first following a foreclosure and determines whether a lien holder will get paid at all. The first lien has a higher priority than other liens and gets paid first from proceeds of the sale.

That's why its sometimes risky for a second lien holder to start foreclosure. When the home is sold, they may not end up with enough to cover their lien.

The other problem to getting the 1st to agree to foreclosure if you are current on the first: Banks are in the business to make money over the course of the mortgage, they are not real estate agents. They usually do not want to be involved in foreclosures and will be happy to collect your payment with interest every month even if it takes 30 years to collect it all.

As always, check with a real estate attorney who knows the law for your state. I am speaking from experience to what can happen in Michigan. I filed bankruptcy in 2011 and stopped paying on the 2nd in 2015. Current on the 1st. 2nd mortgage debt is discharged, but still has a lien on property.