Received form 1098 for first time since bankruptcy 10 years ago

pomona

LoanSafe Member
Jan 22, 2010
12
0
1
Specialized loan Servicing, LLC sent me a IRS form 1098 for 2018 on a heloc loan that was discharged 10 years ago in chapter 7. I have never received a form 1098 since the chapter 7. Can I assume I can use the outstanding mortgage principal listed on the form as basis for negotiating a settlement to release the lien from the property? I reached out to them last year, but they wanted financials and I wouldn't provide - and they wouldn't give me an outstanding balance. Also, I'm listed as a borrower and my ss number is on the form as well - is this normal for a discharged chapter 7 loan? I did check my credit report to make sure it wasn't on there and it's not. I maybe selling the home and relocating in 6 months, and would like to get this second mortgage monkey off my back for a clean closing. Any advise?
 

bkakca

LoanSafe Member
Jul 5, 2013
189
20
18
Specialized loan Servicing, LLC sent me a IRS form 1098 for 2018 on a heloc loan that was discharged 10 years ago in chapter 7. I have never received a form 1098 since the chapter 7. Can I assume I can use the outstanding mortgage principal listed on the form as basis for negotiating a settlement to release the lien from the property? I reached out to them last year, but they wanted financials and I wouldn't provide - and they wouldn't give me an outstanding balance. Also, I'm listed as a borrower and my ss number is on the form as well - is this normal for a discharged chapter 7 loan? I did check my credit report to make sure it wasn't on there and it's not. I maybe selling the home and relocating in 6 months, and would like to get this second mortgage monkey off my back for a clean closing. Any advise?


Hi Pomona, depending on your location, the closing attorney or title company will be able to request a payoff statement for you at time of sale. They will use that amount to pay off the lender from your sale proceeds.

As far as negotiating a settlement prior to that, it seems to be more difficult now than it was when all our values had tanked.

We were able to negotiate settlements on two rental property Helocs in 2014 with BofA, but they wouldn't budge in 2016 on our primary residence Heloc. They actually sold the house at Trustees Sale, and the one bidder didn't know he was bidding on a Heloc amount/lien. He won and had to pay $143k as his winning bid on the Heloc and only found out after that there was a First Mtg for $168K on the house as well. Took him another year to pay off our first mtg.

We had been looking for another home and had closed on it just before the sale, so were fine.
 

Jzone

LoanSafe Member
Jun 20, 2017
201
26
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Specialized loan Servicing, LLC sent me a IRS form 1098 for 2018 on a heloc loan that was discharged 10 years ago in chapter 7. I have never received a form 1098 since the chapter 7. Can I assume I can use the outstanding mortgage principal listed on the form as basis for negotiating a settlement to release the lien from the property? I reached out to them last year, but they wanted financials and I wouldn't provide - and they wouldn't give me an outstanding balance. Also, I'm listed as a borrower and my ss number is on the form as well - is this normal for a discharged chapter 7 loan? I did check my credit report to make sure it wasn't on there and it's not. I maybe selling the home and relocating in 6 months, and would like to get this second mortgage monkey off my back for a clean closing. Any advise?
I would check with your county register of deeds to make sure SLS holds the lien. After 10 years, it may have changed hands several times. It is strange that you would now recieve a 1098 for mortgage interest.
Remember to not look to eager to settle. If they know you intend to sell in 6 months, they have no reason to accept a settlement offer.
 

pomona

LoanSafe Member
Jan 22, 2010
12
0
1
Well, must have poked the bear. I faxed SLS a copy of my original settlement offer I sent to them last year - the only response I received was a letter of intent to foreclose and have 33 days to cure the loan. The 10 year statue of limitation for my state hit's in September. The most recent Deed of Trust on the old countrywide/boa heloc that was transferred out of MERS in 2012 doesn't reference SLS at all. There are some familiar robo signers on the document. SLS's letter doesn't reference the trustee that's listed on the Deed and there is no cross reference on either to match up what loan they are referring. Also, even though heloc was discharged from my personal debt, it appears that SLS setup an account for me regarding this loan. Since it was discharged in chapter 7, I told them it was ok to contact me about discussing it, but didn't go any further. We want to list the house in a few months, and understood that the heloc would have been satisfied after the sale. I want to insure that I have proper documentation referencing the loan and the lien would be released at close. My wife and I are more or less in between jobs now, so I doubt if we would be able to refinance the 1st by rolling in the second with it. I'm talking to a family attorney to see what tactics that maybe an option to delay the possible foreclosure. Open to any comments or suggestions.