Refinance With Countrywide Heloc On The Deed

JKOR

LoanSafe Member
Apr 29, 2017
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I am trying to refinance my home in San Diego and can't figure out how to get it done. I bought my home for 635,000 in 2006 with a 1st mortgage and 2nd Heloc through Countrywide. The first was 400,000 and the heloc used as purchase money was 235,000.

After Countrywide went under, my loans moved to Bank of America. As with most in 2008-2010 time frame, I got behind on my payments. In 2011 BOA did a loan modification on the first (if you can call it that) and moved the behind balance to the backend of the loan. The Heloc (207,000) was charged-off by BOA, moved to Greentree, and now Realtime Resolutions (RTR).

RTR out of nowhere starting reporting the charge off on my credit report in Nov 2016 and I have had zero contact with them. My first is in good standing and has been since 2011 and owe 370,000. My second (heloc) with a balance of 207,000 is now causing me problems.

My current home value is around 750,000 and I want to refinance but cant because there is a charge-off for the heloc and Countrywide is still on the county records. I looked up the Heloc in MERS and RTR is listed as the servicer and Bank of New York is the Investor.

Is there any way at all I can refinance and roll the second into the first? I talked to USAA and they said they didnt even know where to begin because they can't figure out who to pay for the second (heloc) to clear the deed. I've tried talking to a couple of lawyers to help me solve this and I haven't been able to get past the paralegal.
 
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Moe Bedard

Call 1-800-779-4547
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Unfortunately, they just do not go away when they are charged off and the lien remains. When they are charged off, the debt becomes a personal debt and the lien remains on the home. It will be almost impossible to refinance until you settle the HELOC and get the lien removed.

You can try to settle with the HELOC. Many LoanSafe members have settled for 5-20% of what is owed to get the liens removed.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
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Moe is dead on the money, that 2nd mortgage will continue to haunt you until settled or property is sold and lien is satisfied. Once you settle the 2nd mortgage that has been charged off it will be looked at as a short sale in our eyes (mortgage companies). This will cause additional waiting periods before being eligible. For example, conventional is 4 years. FHA is 3 years. We do have portfolio products available as soon as the debt is satisfied however the terms may not be as favorable as what you currently have.
 
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JKOR

LoanSafe Member
Apr 29, 2017
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Thanks for the replies. By chance do think it would be a good idea to hire a debt settlement company or some type of debt law firm that to help negotiate the settlement? As much as I would like to negotiate for 5-10% payoff, I would be just as happy to roll the remaining balance into a new loan just to clear all this up. Do you think there is any way to negotiate for the charge-off to be removed from the credit report so a refinance could happen and RTR get their money.
 

OneHugeMess

LoanSafe Member
May 30, 2016
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@JKOR, you need to play extra careful in this case.

Unlike a lot of people, you actually have EQUITY in your home. Many people who purchased with 80/20 Financing (No Money Down, 100% LTV) ended up instantly underwater in 2007/2008, when home prices dropped dramatically. There were areas, where... values dropped by almost 60% from their peaks. Of course, you already know this.

The thing is.... Real Time Resolutions (who is not acting on behalf of Countrywide, or Bank of America) but acting on behalf of a Trust. A Home Loan Trust, stacked with Two or Three Thousand other Home Loans (probably also 2nd liens, from 100% Financing) and filled with tons of Toxic, Charged Off and Worthless Loans.

For whatever reason RTR, hasn't realized you're not underwater. Bank of America probably did (years ago, when you first defaulted) and noted that in your account file, but RTR hasn't had the home appraised again or performed due diligence.

What this means is.... if someone at RTR realizes, "hey... this person has equity in her home", they will likely want to Foreclose and recover the money for that Trust (which Bank of NY Mellon is acting as Master Trustee of). I don't think they'll want to settle the account for pennies on the dollar.

If I were you.... I'd really try to lay low. And I probably wouldn't want to directly approach RTR and mess with the beehive. You don't want them looking directly into your property. They are in the right position, to move forward and foreclose. And they'd want more than the Principle Balance, they'd want the past due Interest and Late Fees. Which could effectively strip your house, of almost all the equity.

Another Thing - A lot of these companies, heavily depend on Websites like Zillow. If I were you, I'd change all the facts on Zillow. Make your 3,000 SQ Feet 5 Bed, 4 Bathroom House.... 1,600 SQ Feet with 3 Bedrooms and 2 Bathrooms. Change the Construction Year and Eliminate things like "Central Air", "Attached Garage", and "City Sewer". You can easily lower the value of your home online, by changing the facts on a couple of these sites. And as ridiculous as it sounds, I can tell you... that Loan Servicing Software has direct links to properties on Zillow. Confuse the hell out of them.

(And... if you ever do list your home on the market. When your Realtor lists it on the MLS, Zillow will grab up all those home facts, and fix them for you. It'll just confuse people if they Google your address for the time being.)

Just... be careful. You need to be very careful dealing with RTR. They have all the cards in this one :(
 

lorkees

LoanSafe Member
Dec 26, 2009
16
0
1
@JKOR, you need to play extra careful in this case.

Unlike a lot of people, you actually have EQUITY in your home. Many people who purchased with 80/20 Financing (No Money Down, 100% LTV) ended up instantly underwater in 2007/2008, when home prices dropped dramatically. There were areas, where... values dropped by almost 60% from their peaks. Of course, you already know this.

The thing is.... Real Time Resolutions (who is not acting on behalf of Countrywide, or Bank of America) but acting on behalf of a Trust. A Home Loan Trust, stacked with Two or Three Thousand other Home Loans (probably also 2nd liens, from 100% Financing) and filled with tons of Toxic, Charged Off and Worthless Loans.

For whatever reason RTR, hasn't realized you're not underwater. Bank of America probably did (years ago, when you first defaulted) and noted that in your account file, but RTR hasn't had the home appraised again or performed due diligence.

What this means is.... if someone at RTR realizes, "hey... this person has equity in her home", they will likely want to Foreclose and recover the money for that Trust (which Bank of NY Mellon is acting as Master Trustee of). I don't think they'll want to settle the account for pennies on the dollar.

If I were you.... I'd really try to lay low. And I probably wouldn't want to directly approach RTR and mess with the beehive. You don't want them looking directly into your property. They are in the right position, to move forward and foreclose. And they'd want more than the Principle Balance, they'd want the past due Interest and Late Fees. Which could effectively strip your house, of almost all the equity.

Another Thing - A lot of these companies, heavily depend on Websites like Zillow. If I were you, I'd change all the facts on Zillow. Make your 3,000 SQ Feet 5 Bed, 4 Bathroom House.... 1,600 SQ Feet with 3 Bedrooms and 2 Bathrooms. Change the Construction Year and Eliminate things like "Central Air", "Attached Garage", and "City Sewer". You can easily lower the value of your home online, by changing the facts on a couple of these sites. And as ridiculous as it sounds, I can tell you... that Loan Servicing Software has direct links to properties on Zillow. Confuse the hell out of them.

(And... if you ever do list your home on the market. When your Realtor lists it on the MLS, Zillow will grab up all those home facts, and fix them for you. It'll just confuse people if they Google your address for the time being.)

Just... be careful. You need to be very careful dealing with RTR. They have all the cards in this one :(
 

lorkees

LoanSafe Member
Dec 26, 2009
16
0
1
Erik, I just sent you a PM. I am in this exact scenario, but they want the house. I want to refi but am being told by all lenders that UW will require to see 24 months of second mortgage payments. I haven't paid it in approx. 9 years. I am trying to refi to pay it plus HUGE interest off. Need any assistance you can offer asap. Thank you!!!
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
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Jan 14, 2011
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San Diego, California
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**Update, we do have a new loan product available the day after a charged off lien occurs**

Hi Lorkees,
If your 2nd mortgage have been charged off for more than 4 years, we can look into refinancing.

Guidelines state:
Charge off - 4 years from the date of completion to be eligible.
 
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lorkees

LoanSafe Member
Dec 26, 2009
16
0
1
Hi Lorkees,
If your 2nd mortgage have been charged off for more than 4 years, we can look into refinancing.

Guidelines state:
Charge off - 4 years from the date of completion to be eligible.
Thank you for your response, Erik. I have someone working on it. Working on it because they are totally bewildered!! It was charged off approx. 6/2011. There is absolutely no reference to it on any 3 of my credit reports. I did an O & E about a year ago and I check Public Records regularly the only recorded lien is the original recorded by Fremont in 2005 when the loan was originated. Do you think there is reason that I should be concerned that this FIFTH place that now seems extremely intent on foreclosing actually has the Original note? or ? Like I mentioned previously I did retain an Attorney and he has proven to be nothing but a huge disappointment. The Mortgage Broker that is working on it was initially excited and said he didn't want me to get my hopes up but there was a possibility that I may not be liable to pay it, I told him if he was (or someone) was thinking that in regards to SOL, my Attorney told me that the timing is very Border Line, he said there is gray area depending on when the SOL is determined to begin i.e. last payment, etc...he said that it would be difficult in Colorado due to Judges here tending to side with Lenders. Besides that they wouldn't release the lien, they can keep that on there forever. When I asked the Attorney about checking the validity of their right to collect etc... he said that "they always have what they need when they show up to foreclose".
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
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Jan 14, 2011
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www.loansreduced.com
This doesn't really make sense to me in regards to them having the ability to foreclose, however I am not a foreclosure attorney and would hate to give you inaccurate information. I really focus on the lending after these types of situations whether it be a refinance or purchase.

The credit report can always be fixed as long as you have the correct documentation that shows the loan was charged off.

"Do you think there is reason that I should be concerned that this FIFTH place that now seems extremely intent on foreclosing actually has the Original note? or ?" - This I don't really feel comfortable answering because of what I mentioned above.

Has there been any progress with the mortgage broker you're working with for a solution in regards to refinancing?
 

lorkees

LoanSafe Member
Dec 26, 2009
16
0
1
This doesn't really make sense to me in regards to them having the ability to foreclose, however I am not a foreclosure attorney and would hate to give you inaccurate information. I really focus on the lending after these types of situations whether it be a refinance or purchase.

The credit report can always be fixed as long as you have the correct documentation that shows the loan was charged off.

"Do you think there is reason that I should be concerned that this FIFTH place that now seems extremely intent on foreclosing actually has the Original note? or ?" - This I don't really feel comfortable answering because of what I mentioned above.

Has there been any progress with the mortgage broker you're working with for a solution in regards to refinancing?
 

lorkees

LoanSafe Member
Dec 26, 2009
16
0
1
Hi, Erik
The LO ordered an O & E with EVERYTHING yesterday. He is waiting to get that back and didn't receive it yet today. Again, they're thinking that since the second doesn't show on any of my credit reports and only with the original Originator (Fremont) recorded on Public Records for 52K that I shouldn't owe West Coast Servicing anything let a lone 90K. I very much appreciate their due diligence. It is much more than the Attorney that I retained has done. I did just read an article though that said pretty clearly that SOL does not apply to mortgages (due to the lien). A creditor can not be forced to remove a lien and can sue whenever they want. It also said that there is quite a bit of expectation that situations like mine will become fairly common now and in the near future due to the amount of equity appreciation many have experienced. It said that if you have a defaulted HELOC or 2nd that has been silent for years that you should reach out or track it down to settle in hopes of settling with the bank and not a greedy Collection Company (like I am), said the bank will most likely be much more willing to work something out and/or take in to account your circumstances. The Collection Companies want your house!!! They tack on fees and high interest and could care less about how it affects your situation, they don't care. If I can locate that article again I will copy and paste it on here.
 

despritfreya

LoanSafe Member
Sep 8, 2011
369
53
28
I did just read an article though that said pretty clearly that SOL does not (run if the loan has not matured or been accellerated). . . A creditor can not be forced to remove a lien and can sue(/foreclose) whenever they want. It also said that there is quite a bit of expectation that situations like mine will become fairly common now and in the near future due to the amount of equity appreciation many have experienced.
Been saying this for years.

Des.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
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Jan 14, 2011
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San Diego, California
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That would be great to read Lorkees, as of course I am not a foreclosure attorney I would love to know this information to help out our fellow members here on the forum with these questions.
 

lorkees

LoanSafe Member
Dec 26, 2009
16
0
1
This doesn't really make sense to me in regards to them having the ability to foreclose, however I am not a foreclosure attorney and would hate to give you inaccurate information. I really focus on the lending after these types of situations whether it be a refinance or purchase.

The credit report can always be fixed as long as you have the correct documentation that shows the loan was charged off.

"Do you think there is reason that I should be concerned that this FIFTH place that now seems extremely intent on foreclosing actually has the Original note? or ?" - This I don't really feel comfortable answering because of what I mentioned above.

Has there been any progress with the mortgage broker you're working with for a solution in regards to refinancing?
 

lorkees

LoanSafe Member
Dec 26, 2009
16
0
1
Erik, No go on THIRD lender after being strung a long for all most a week!!! It's the same thing, they need 24 recent months of 2nd mortgage payment history and he told me that it wouldn't be an issue prior to my consenting to him pulling credit, said he had over 110 different sources he could choose from (portfolio). I sent you a PM.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,111
182
63
San Diego, California
www.loansreduced.com
Hey Lorkees,
I'm going to have a conversation with one of our underwriters regarding this topic. I've been told multiple times that as long as a charged off lien is older than 4 years we should be able to refinance. I want to get into the logistics of doing that and whether a subordination is needed or if the lien is affecting title is that going to cause an issue with refinancing. I'll let you know what they say when I have a chance to speak with them.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,111
182
63
San Diego, California
www.loansreduced.com
I still have yet to obtain a solid answer on this and am working on a few refinances with charged off liens. The best answer I've heard yet is that if a lien is affecting title, that's going to be what causes an issue. I'll keep everyone updated on this topic as my files progress.
 

lorkees

LoanSafe Member
Dec 26, 2009
16
0
1
Erik, that's been my problem. The lien is on Title and I knew the original one was still there that was recorded by Fremont in 2005 when the loan was originated. There have been no further recordings until West Coast Servicing recorded "transfer of service" 12/16. I didn't see they had recorded until I did a full blown O & E. I am still trying to find financing and am talking to Hard Money Lenders. I am also calling West Coast tomorrow to see if I can't work something out with them. The Attorney wasn't able to but this is just totally unbelievable to me. The second was 53K when it originated in 2005, we paid on it until 2010 when the loan mod with GMAC seemed to get lost and they claimed we owed money because our payments were short (modified payments) had me re-do loan mod app and then they denied it. Now this thing has been transferred all over, I never knew where it was and now here it is and they want 90K!. The balance on our first is 185K. The house is worth 400K now. So we have equity. I'm not just going to let it go. And of course the equity is why all of this is happening and it "just showed up".