Re-finance With Charged Off 2nd Mortgage

Mimi313

LoanSafe Member
May 18, 2016
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so, I took the first step: I contacted Nationwide for a debt settlement. Here is how it went:
Last payment date was 4/2010; charged off in 2011.

(India phone operator)
They requested my current loan amount with 1st mortgage; I denied having the information but stated over 100k still owed, almost what we originally financed.
They requested my current pay information; I politely declined offering that info.
She offered a repayment plan of $500/month; I declined as I'm interested in settling only, no payment plan.
She did look up my home value $158k. Then asked if we were in the home; yes we are and plan to stay that way.
Then offered 80% of $27,923.00 owed as the settlement, $22,000; I declined.
She then asked what I could pay as settlement; I offered 5%.
I am actually willing to settle for up to 20%, if I have to but started at 5%.
She told me there is no way they will ever settle for that low, not now or later.
I told her that was all the cash funds that I had available to settle this old debt.
She told me she would call me back in the future. I thanked her for her time and hung up.
80% seems really steep, I was not prepared for that.

So now, we just wait this out?
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,799
456
1,000
48
Southern California
www.loansafe.org
That is about all you can do. But I would make it sound like you are prepared to just walk away from the home rather than tell them you plan to stay. They will use that against you. You can also say that you are prepared to wait out the SOL.
 

Mimi313

LoanSafe Member
May 18, 2016
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Well technically SOL is up, 4 years? Last payment was 2010, one more year and the charge off will be off our credit report. Should I mention sol is up if she calls again?
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,799
456
1,000
48
Southern California
www.loansafe.org
I think you may be spot on! Yes, I would and also check with a lawyer.
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,799
456
1,000
48
Southern California
www.loansafe.org
You are welcome!

Please let us know how this all turns out for you and I wish you the best of luck!
 

Mimi313

LoanSafe Member
May 18, 2016
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Update: Nationwide called me today. They went from 80% to 50% offer to settle in two weeks. I declined and told her that was not even feasible. She requested financial information again and told her again I was only interested in settling. She mentioned there was an offer of 20% back in February but we never received any offer and now the computer will not go less than 50%. I did say I find it hard to believe the computer can not be bypassed by a manager or someone who would not like to waste my time. She said she will keep an eye on it and keep running it through the computer for a better offer and call me back. Hmmm.

I have another question: our mortgage ran a credit supplement from Credco to verify the charge off date per the underwriter. They still seem to think this refinance may happen. Any thoughts on this?
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,799
456
1,000
48
Southern California
www.loansafe.org
That is a great start and I think you are on the right track.

Do you mean the mortgage company that you were applying for a mortgage with had ran a credit supplement from Credco?
 

Mimi313

LoanSafe Member
May 18, 2016
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That is a great start and I think you are on the right track.

Do you mean the mortgage company that you were applying for a mortgage with had ran a credit supplement from Credco?
I'm sorry, yes that is what I meant. The lender we are trying to refinance with ran a credit supplement per the request of the underwriter.
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,799
456
1,000
48
Southern California
www.loansafe.org
OK, not a problem. Of course they want to still do the refinance because they have time and money invest in your loan and that is how they make money. You are also a proactive borrower who is actively trying to resolve the lien. Hence, your loan officer and lender will try to keep the file alive for a certain amount of time until they deem it is either dead or you settle the lien.
 

Mimi313

LoanSafe Member
May 18, 2016
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Update: mortgage lenders underwriter approved our loan but the title company just called requesting more information. I don't know how to be more clear but I've told them everything word for word numerous times. I haven't heard from Ocwen but I missed a call from a weird number and I'm wondering if it was them. Without this cleared on the title we are still out of luck!!!! They also requested another survey another $400-500. I'm not investing another dime until this is cleared.
 

Mimi313

LoanSafe Member
May 18, 2016
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OK, not a problem. Of course they want to still do the refinance because they have time and money invest in your loan and that is how they make money. You are also a proactive borrower who is actively trying to resolve the lien. Hence, your loan officer and lender will try to keep the file alive for a certain amount of time until they deem it is either dead or you settle the lien.
Maurice, I have some good news. I just got off the phone with Nationwide and they have accepted my offer of 5% for full settlement and release of lien!! They're going to email me the paper work. I feel like a weight has been lifted. thank you so much of your help!!!
 

Mimi313

LoanSafe Member
May 18, 2016
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I received the settlement letter today. It states the settlement offer and "upon timely receipt and clearance of the entire settlement amount, Nationwide, agrees to close account as settled and to notify the appropriate parties to execute a released and a discharge of the Deed of Trust/Mortgage, as well as forego all rights to pursue a def judgment."

Is this acceptable? I just want to make sure when I pay them that they will RELEASE the lien. My refi is in limbo right now.
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,799
456
1,000
48
Southern California
www.loansafe.org
Congratulations! This is as good as it gets when it comes to settlements and that is the exact wording you want. I say you are good to go :)
 

Mimi313

LoanSafe Member
May 18, 2016
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Congratulations! This is as good as it gets when it comes to settlements and that is the exact wording you want. I say you are good to go :)
Thank you! I couldn't have done it without this site!! Any idea if the release of lien really takes 60-90 days as quoted ?!
 
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Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,799
456
1,000
48
Southern California
www.loansafe.org
You are welcome!

It can take as little as 2 weeks and at worse case, 90 days. Usually it is right around 30-45 days.

Please let us know when you get the release of the lien.
 

Mimi313

LoanSafe Member
May 18, 2016
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I'm in another bind: Fannie Mae will not refinance us if we pay this settlement. Does anyone have any advice on this? How long did you have to wait to refinance?
 

bkakca

LoanSafe Member
Jul 5, 2013
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I'm in another bind: Fannie Mae will not refinance us if we pay this settlement. Does anyone have any advice on this? How long did you have to wait to refinance?
Erik Sandstrom, our Mortgage Expert, may know something more, but I am finding this on the Fannie Mae website:

Deed-in-Lieu of Foreclosure, Preforeclosure Sale, or Charge-Off of Mortgage- Account- 4 Years.

Waiting Period with Extenuating Circumstances - 2 Years

Deed-in-Lieu of Foreclosure, Preforeclosure Sale, and Charge-Off of a Mortgage Account
These transaction types are completed as alternatives to foreclosure.




    • A deed-in-lieu of foreclosure is a transaction in which the deed to the real property is transferred back to the servicer. These are typically identified on the credit report through Remarks Codes such as “Forfeit deed-in-lieu of foreclosure.”
    • A preforeclosure sale or short sale is the sale of a property in lieu of a foreclosure resulting in a payoff of less than the total amount owed, which was pre-approved by the servicer. These are typically identified on the credit report through Remarks Codes such as “Settled for less than full balance.”
    • A charge-off of a mortgage account occurs when a creditor has determined that there is little (or no) likelihood that the mortgage debt will be collected. A charge-off is typically reported after an account reaches a certain delinquency status, and is identified on the credit report with a manner of payment (MOP) code of “9.”
A four-year waiting period is required from the completion date of the deed-in-lieu of foreclosure, preforeclosure sale, or charge-off as reported on the credit report or other documents provided by the borrower.

Exceptions for Extenuating Circumstances

A two-year waiting period is permitted if extenuating circumstances can be documented.

Note: Deeds-in-lieu and preforeclosure sales may not be accurately or consistently reported in the same manner by all creditors or credit reporting agencies. See Identification of Significant Derogatory Credit Events in the Credit Report above for additional information.
 

bkakca

LoanSafe Member
Jul 5, 2013
189
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I'm in another bind: Fannie Mae will not refinance us if we pay this settlement. Does anyone have any advice on this? How long did you have to wait to refinance?
Mimi, I know you said SOL is up on this lien, but I don't believe that means they will just release the lien. So in order to refinance, sounds like you would need to get the lien released and your settlement offer sounds good. It may mean waiting to refinance 2-4 years, or maybe checking into FHA financing and seeing what that would look like, as I think their waiting periods may be shorter.

Do what is best for you and youres, but if it were me, I would want that lien released and off my title to the home for anything I want to do in the future.
 
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Mimi313

LoanSafe Member
May 18, 2016
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Mimi, I know you said SOL is up on this lien, but I don't believe that means they will just release the lien. So in order to refinance, sounds like you would need to get the lien released and your settlement offer sounds good. It may mean waiting to refinance 2-4 years, or maybe checking into FHA financing and seeing what that would look like, as I think their waiting periods may be shorter.

Do what is best for you and youres, but if it were me, I would want that lien released and off my title to the home for anything I want to do in the future.
thank you. I guess you are right. We are so deep into this re-finance it's such a disappointment. :( But what can you do.