SLS 2nd Mortgage CA

RudyM

LoanSafe Member
Aug 17, 2012
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Hello, I found this website very useful when my first mortgage with Nationstar was modified and I got a HAMP approval back in 2013. I did not pay the 2nd mortgage as my house was underwater. Now my house is above water and I have been trying to negotiate on my own but never gave them any of my financials. On 11/27 I received by mail a notice of intent to foreclose. Details below:

1st Mortgage Nationstar $463,000 hamp modification and it is current
2nd Mortgage SLS $116,000 stopped paying in 2009
Chpt 7 Bankruptcy in 2010 discharged but both banks still have a lien.
Zillow value approximately $613,000

SLS is asking for a payment of $82,000 to bring the account current by the end of December (Merry Christmas?) I would appreciate anyone's help on here on how to deal with them, but I see others on here who have not had good luck with SLS. Per MERS the investor for SLS is NY Bank of Mellon. Of course we would like to keep the house, but my question is whether the letter is just a scare tactic or should I start the countdown on a CA foreclosure. Any other advice would be greatly appreciated and I reside in San Diego, CA.

Thank you,
Rudy
 

Jzone

LoanSafe Member
Jun 20, 2017
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I dont know about California, but Im in similiar situation in Michigan. 1st and 2nd discharged in Chapter 7. Have kept paying on the first but not on the second. 2nd was sold/transferred to United Guaranty, basically a debt collector.

In Michigan, the 2nd mortgage can foreclose but must also pay off the 1st-so very unlikely. Also, because of bankruptcy in my situation, the second mortgage is trying to enforce a lien, not collect a debt. The debt has been discharged, but of course the lien remains.

The only real way the second mortgage can enforce their lien is when the house is sold. I am in no hurry to sell and always current on the 1st mortgage. I send them a settlement offer to release the lien once or twice a year and never hear back.

If you are current on the 1st, I would not worry about the 2nd starting foreclosure, but then again, Im in Michigan and not California, so I would check the law in your state.
 

RudyM

LoanSafe Member
Aug 17, 2012
19
2
3
I dont know about California, but Im in similiar situation in Michigan. 1st and 2nd discharged in Chapter 7. Have kept paying on the first but not on the second. 2nd was sold/transferred to United Guaranty, basically a debt collector.

In Michigan, the 2nd mortgage can foreclose but must also pay off the 1st-so very unlikely. Also, because of bankruptcy in my situation, the second mortgage is trying to enforce a lien, not collect a debt. The debt has been discharged, but of course the lien remains.

The only real way the second mortgage can enforce their lien is when the house is sold. I am in no hurry to sell and always current on the 1st mortgage. I send them a settlement offer to release the lien once or twice a year and never hear back.

If you are current on the 1st, I would not worry about the 2nd starting foreclosure, but then again, Im in Michigan and not California, so I would check the law in your state.
Appreciate your help and I will continue to look at the CA laws :)
 

bgriff

LoanSafe Member
Mar 11, 2012
164
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Look at the SOL as well, it's been almost 10 years since the discharge. Michigan is the exception in SOL as most states it's 5-10 years from the acceleration date. The acceleration date is key and may have happened without notice. You may need a lawyer.
 

RudyM

LoanSafe Member
Aug 17, 2012
19
2
3
Look at the SOL as well, it's been almost 10 years since the discharge. Michigan is the exception in SOL as most states it's 5-10 years from the acceleration date. The acceleration date is key and may have happened without notice. You may need a lawyer.
I’m not sure the SOL is applicable in CA. I hear they can renew the SOL. May 2020 is when chpt 7 bankruptcy was discharged.
I might need to consider chpt 13 bankruptcy to wipe out the the 2nd and 3rd though it’s not an option I prefer. Specialized Loan Services is notorious for not being upfront and honest with their debtors and I have tried to make arrangements with them but to no avail.
I will need to do more research and make an appointment with my lawyer who did the CHPT 7 for my initial bankruptcy.

Any advice on CHPT 13 bankruptcy in CA would be appreciated.
Thank you,
Rudy
 

RudyM

LoanSafe Member
Aug 17, 2012
19
2
3
Hello, just following up.... After speaking to one Chpt 13 real estate Attorney I decided payments are too much. He recommended I do a refi but it's not possible to get a refi since the balance on the loans is more than that what the home is worth in CA. Liens were discharged and the 2nd SLS is trying to get me to do a short sale. Does anyone know if they are just pulling my leg since the 2nd would need to pay off the first? I'm thinking of just wading it out as I feel the 2nd may not take action. Thoughts?
 

bigfrog

LoanSafe Member
Aug 31, 2011
358
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I responded to your other post. They aren't going to Foreclose. They were crying when I was begging them to foreclose. It was a weird thing. Ask anyone here or anywhere, have you heard SLS done any foreclosure serving as a second? I haven't seen anyone other than the first doing foreclosures.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
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San Diego, California
www.loansreduced.com
BigFrog, I just had a NOS filed on a borrower of mine the day after we funded the loan. Funded 02/09/2020 and NOS filed 02/10/2020. These guys are being proactive about foreclosing, in this case I saved the house from that but the auction date was for the 18thclient called the foreclosure dept, they confirmed the lien was satisfied and removed it from the docket of sale.

RudyM,
Cash out refinances are what a transaction would be considered when you're paying off an old charged off 2nd lien. There are limited loan to value ratios (that have been recently reduced) that will only lend to 80% of what your home is worth. If you exceed that threshold, my advice would be to engage them for a settlement offer to see what you can get them down to.

My professional advice would be to NOT let them lie any longer than you can, if you do get a notice of sale filed against the property it makes it much more difficult to do a regular conventional transaction and you would be forced into a portfolio type situation.

I know Bigfrog would give me crap about this but I'm seeing it on a front line basis. There are many people that I've helped that are not part of the forum because I think there's still been issues joining it and receiving the e-mail confirmation. I've chatted with Moe about that and hopeful that it will get fixed soon.
 

RudyM

LoanSafe Member
Aug 17, 2012
19
2
3
BigFrog, I just had a NOS filed on a borrower of mine the day after we funded the loan. Funded 02/09/2020 and NOS filed 02/10/2020. These guys are being proactive about foreclosing, in this case I saved the house from that but the auction date was for the 18thclient called the foreclosure dept, they confirmed the lien was satisfied and removed it from the docket of sale.

RudyM,
Cash out refinances are what a transaction would be considered when you're paying off an old charged off 2nd lien. There are limited loan to value ratios (that have been recently reduced) that will only lend to 80% of what your home is worth. If you exceed that threshold, my advice would be to engage them for a settlement offer to see what you can get them down to.

My professional advice would be to NOT let them lie any longer than you can, if you do get a notice of sale filed against the property it makes it much more difficult to do a regular conventional transaction and you would be forced into a portfolio type situation.

I know Bigfrog would give me crap about this but I'm seeing it on a front line basis. There are many people that I've helped that are not part of the forum because I think there's still been issues joining it and receiving the e-mail confirmation. I've chatted with Moe about that and hopeful that it will get fixed soon.
I am engaging them in a settlement now. However, they say they will call me back and never do. I call several times a week and request to speak to my POC. I have made a formal offer in writing and sent them my 1st payoff amount as requested. Their excuse now is that they need to put a file together and my POC he said he would call me back in a couple of hours after he spoke with his manager about my offer yesterday, but never got a call back. Then I noticed they requested another appraisal today on their website. I am sure they want to try to get the most $ money they can from me, but I have nothing to lose but my home. I filed chpt 7 about 10yrs ago and this was included in my BK. Of course my credit will be shot but either way it will go down. If I chose to pay them a settlement they need to report the difference to credit agencies when charged off.

If we come to an agreement I will borrow from my 401K and family but I will only pay a minimum and they will not get their full asking price, but I am willing to negotiate. I'm sure they want the difference from my first mortgage pay off $515K and their BPO. Their BPO was $574k and I have a feeling they will want more of the difference if the recent BPO has gone up. I will tell them I am going to request my own BPO to make sure it's a fair offer. They have everything to lose if I decide to let them foreclose. They will need to buy out the 1st mortgage and SLS is a collection agency and they are hired to collect and not take on debt. Wish me luck :)
 
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bigfrog

LoanSafe Member
Aug 31, 2011
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Good luck to you RudyM.. The key is you are happy and get what you want. And that where they will to get you. So you have to really think. Ask yourself, if you are happy to give them all your money, because that is what they want.

The first thing they want you to think, is that they are helping you on how to give them all your money. That's what they told me. SLS said, "We are here to help you. We are on your side. All we want to do is help you get back on track with making payments!" I don't know where in the world they get the idea helping other is by taking their money. Bleeding them dry?

My neighbor just sold his house, so I hope that will give SLS and the investors some confidence in pursuing a foreclosure with me. Maybe I should call them up and let them know. I know they will chicken out and wont do nothing, but its worth a shot. I am going to start out with the my crazy lines... "There is money on the table.. roughly 250k. confirmed by SLS rep.. But no one wants it. This strange that none of the investors want the 250k." like last time.
 

RudyM

LoanSafe Member
Aug 17, 2012
19
2
3
Wow, just got off the phone with SLS and now they are saying they want $120,000 debt settlement which is close to the full amount of the original loan. I said no way and you can foreclose on the home since it is not worth it for me to keep the it. I told them they will lose money if they foreclose on it but if they are not willing to negotiate with me then let's move forward. The rep said he would get back to me after he talks to his manager but he didn't think they would settle for less. I said that's fine but I would like to know either way. Amazing they would want the full amount of the loan now after the fact. Oh well, I am willing to let it go now after all of these years and trying to deal with them.

Bigfrog, you are right about not giving them all my money. I'd be happier taking vacations and keeping some of my 401K money than giving it all to them. No home is worth all of this...
 

bigfrog

LoanSafe Member
Aug 31, 2011
358
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RudyM.. Exactly.. I did the math(where it cost them ZERO dollar to foreclose), I saw that it was way way better for me if they had foreclosed. And I believed they saw the same thing I did, and thus the reason they wouldn't foreclose, even after the fact that they told me that I have $250k in equity.

They are just trying to squeeze the blood out of whoever they can. They aren't there to help anyone except themselves. Since that day they stopped calling me. Didn't have to give them that C&D thing.

I am waiting for the Coronavirus to damage the global economy and some how bring down the housing market to its knee. The stock market will be hit first, and there is no stopping it until they find a cure. Just obvious, people are scared and will not be able to travel whether they want or don't want. The flow of money will be restricted one way or another.

In the past it was ... stocks crash, then houses, then stocks then houses.. There are some ties there.