Strategy for Settling Your 2nd

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whypay

LoanSafe Member
Jun 14, 2010
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TomE:

Off topic real quick mate, but where's the bleepin' snow? Sounds like it's abiding by the strategy and ceasing all precipitation. :nuts: Just had to break the monotony of the thread for a minute, thanks!

Cheers,

wp
 

dpf749

LoanSafe Member
Mar 5, 2011
13
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I am in Michigan. 39 degrees is the predicted LOW temp tonight. The inch or so we had is rapidly melting away. 50 degrees and sunny predicted for tomorrow. I am old enough to remember weeks on end of zero and negative temps most every year at this time, along with blowing and drifting snow by the foot. It is either global warming or just because I put my snow tires on last week. :)
 

whypay

LoanSafe Member
Jun 14, 2010
260
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I am in Michigan. 39 degrees is the predicted LOW temp tonight. The inch or so we had is rapidly melting away. 50 degrees and sunny predicted for tomorrow. I am old enough to remember weeks on end of zero and negative temps most every year at this time, along with blowing and drifting snow by the foot. It is either global warming or just because I put my snow tires on last week. :)
LOL! Just the word MICHIGAN ushers in thoughts of the nasty Russian front :bigsmile: If I lived in Michigan at this time of the year, I'd be savoring the weather that's passing through right now. I'm sure you're not complaining dpf749!

wp
 

jbutterfly3

LoanSafe Member
Aug 15, 2009
103
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Hi Tom,
here is an update on the breech of contract suit we have against us.
The lawyer has not dropped the ridiculous suit and is not returning our attorney's calls.
He emailed saying he left our attorney a message but that is untrue.
It appears he is only interested in playing games.
 

TomEason

LoanSafe Guide
Jun 18, 2009
12,390
85
48
SF Bay Area CA
Hi jbutterfly

Thanks for your update. I imagine the plaintiff's attorney now realizes the foolishness of this lawsuit and is too embarassed to discuss it with the opposing attorney (yours). FYI, there's no legal requirement that the opposing lawyers communicate and extend professional courtesy during this 30 period from the service of the complaint and summons until defendant's answer.

If it were me, I would never have counted on such communication.

Instead, I recommend you file and serve your answer, including your affirmative defense(s), and your plea that the court award you with attorney's fees and legal costs for having to defend against this frivolous lawsuit.

With that answer, I recommend you file a motion asking for court sanctions against the plaintiff and plaintiff's attorney. Sanctions are warranted because the plaintiff is wasting the court's time by filing a frivolous lawsuit it knows cannot win.

In my opinion, after having been served with your answer, the lender will attempt to withdraw their breach of contract lawsuit, so as not to be charged with sanctions and assessed for your legal costs and attorney fees.

It's common knowledge in the FC defense industry that this is a legal tactic lenders often use. They bring a questionable lawsuit in the hopes that the defendant will be intimidated, won't file an answer, and that a default judgment can then be taken. However, if the defendant does answer the frivolous complaint, which the plaintiff knows is unwinnable in court, the plaintiff then files a motion to have the suit dismissed, in an effort to avoid any legal consequences for their actions.

The question for your would be how much $$ you'd have to spend to hold the plaintiff accountable, as you're up against a lender with bottomless pockets.

Good luck and please keep us posted!
 

TomEason

LoanSafe Guide
Jun 18, 2009
12,390
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48
SF Bay Area CA
TomE:

Off topic real quick mate, but where's the bleepin' snow? Sounds like it's abiding by the strategy and ceasing all precipitation. :nuts: Just had to break the monotony of the thread for a minute, thanks!

Cheers,

wp
Hi WP

Thanks for your light-hearted note. Yes, the snow has been conspicuously absent! As you know, in the west we're now in a drought. One must travel quite a distance to find good conditions.

Oh well. At least we're not associated with the snow-sports industry. Can you imagine being a ski resort owner? It's as bad as or worse than being a farmer - total dependency on the whims of the weather!

Ciao!
 

Georgiahome

LoanSafe Member
Jan 6, 2012
5
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Tom
I live in North Georgia and have a home with a first Mortgage of $111K (chase) and a second $41K (well fargo). The home right next door is bigger than mine and is in forcloseur and has been lised for 3 months at $134K with no takers. I filed chapter 7 2 years ago and did not reafirm either loan. THe first mortgage is current but the second is 5 months past due and I have been turned down twice for a loan mod on the second. The last time I submitted info was 4 months ago and now they want me to resubmit or they say the will forclose. On zillow it says my vause is $130K . Will they forclose? I want to keep my home but cannot afford the second mortgage. Help?
 

TomEason

LoanSafe Guide
Jun 18, 2009
12,390
85
48
SF Bay Area CA
Georgiahome

Welcome to Loansafe. I recommend you visit post #1 and read the guide. I think you'll find the answers to your questions.

You might also consider getting a more reliable valuation than that provided by Zillow. You might ask a local RE agent knowledgeable about your neighborhood to do a CMA for you (usually free).

Good luck.
 

whypay

LoanSafe Member
Jun 14, 2010
260
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Hi WP

Thanks for your light-hearted note. Yes, the snow has been conspicuously absent! As you know, in the west we're now in a drought. One must travel quite a distance to find good conditions.

Oh well. At least we're not associated with the snow-sports industry. Can you imagine being a ski resort owner? It's as bad as or worse than being a farmer - total dependency on the whims of the weather!

Ciao!
Can I get a refund on my Epic Pass? :bigsmile: Thanks for the well versed replies, they are always welcomed! A pleasant weekend to you as well.

Out,

wp
 

tman1971

LoanSafe Member
Jul 22, 2010
32
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Update. 1st with wells 200K, 2nd also Wells 300K. Value about 375K high end 350K Low. Almost 7 months since last payment on second. Currently following the Strategy.Which,by the way is really easy when you do nothing!
After 6months and 1 week my online acct disapeared and can no longer be accessed. I was getting 5-6 calls a day, every day,for six months!!!.......... Now, zero!!!!! Had a car drive by really slow taking pics of the house and neighbor hood a few months back. Then a $75 appraisal charge showed up on a statement.I wanted to stop them and tell them I'll triple what the bank pays them for a low BPO!!Anyway, Thanks Tom and all other contributers. This site is a godsend!
Not sure what to expect next but will update when it happens.
 

braeburn

LoanSafe Member
Nov 15, 2011
3
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0
Tom, thanks for all of your very generous help. I have a bit of a unique situation I wanted to get your opinion on. I had a 1st and 2nd (both purchase money loans) mortgage with Wells and I stopped making payments on both last March. In late October Wells sold my 1st to a company. They sold the rights to the loan and the servicing but the 2nd remains with Wells as of now and a debt collector starting calling 2 months ago. I finally spoke with the company that bought my 1st mortgage and they are willing to do a short sale for much less than I owe and will try to help get me a partial release on the 2nd too. WA state is a non-recourse state and from my understanding a non-deficiency state for purchase money 2nds. I called the debt collector for the 2nd mortgage today and he is baffled as to why Wells sold the 1st mortgage but thought maybe they sold the 1st so they might have some deficiency options on the 2nd mortgage since Wells no longer owns the 1st. He seemed to think that if the 1st and 2nd mortgage companies are different then Wells might have options for the getting a deficiency judgement for the 2nd. Have you ever heard of this situation or any advice? Thanks so much.
 

TomEason

LoanSafe Guide
Jun 18, 2009
12,390
85
48
SF Bay Area CA
Tom, thanks for all of your very generous help. I have a bit of a unique situation I wanted to get your opinion on. I had a 1st and 2nd (both purchase money loans) mortgage with Wells and I stopped making payments on both last March. In late October Wells sold my 1st to a company. They sold the rights to the loan and the servicing but the 2nd remains with Wells as of now and a debt collector starting calling 2 months ago. I finally spoke with the company that bought my 1st mortgage and they are willing to do a short sale for much less than I owe and will try to help get me a partial release on the 2nd too. WA state is a non-recourse state and from my understanding a non-deficiency state for purchase money 2nds. I called the debt collector for the 2nd mortgage today and he is baffled as to why Wells sold the 1st mortgage but thought maybe they sold the 1st so they might have some deficiency options on the 2nd mortgage since Wells no longer owns the 1st. He seemed to think that if the 1st and 2nd mortgage companies are different then Wells might have options for the getting a deficiency judgement for the 2nd. Have you ever heard of this situation or any advice? Thanks so much.
braeburn

As this thread deals only with settling 2nds, I recommend you seek the counsel of a WA professional for assistance in assessing your overall situation.

Good luck.
 

jbutterfly3

LoanSafe Member
Aug 15, 2009
103
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Thanks Tom, that is exactly what we are planning to do. We will meet with our attorney next week to file our response.
Our attorney was really hoping the phone call would fix the issue but clearly they want to waste as much of our time and money as possible.
It's definitely worth the expense to shut this lender down and then his only recourse is to wait or settle.
I doubt very much they would try to sue again at some point...
 

TomEason

LoanSafe Guide
Jun 18, 2009
12,390
85
48
SF Bay Area CA
New Posters

This thread deals only with settling 2nds. Please post accordingly.

Before posting a question here, review the Strategy Guide at post #1.

If there’s something you don’t understand in that guide, continue reading the thread; you’ll figure it out. If your situation isn’t addressed in the thread (unlikely), post a short, crisp query. Posts requesting validation of one’s individual strategy aren't well received here.

Only the essential numbers & facts please; we won’t read your history.

State:
Property Value:
1[SUP]st[/SUP] Lender:
1[SUP]st[/SUP] Loan Balance:
Purchase money? Yes____ No____
2[SUP]nd[/SUP] Lender:
2[SUP]nd[/SUP] Loan Balance:
Purchase Money? Yes____ No____

Repeat Posters

Please re-post your numbers as we can’t recall everyone’s situation.

Thanks!
 
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ddonnas21

LoanSafe Member
Feb 16, 2011
100
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Hey guys! Been awhile since posting but I have a new question. I have been following the foreclosures in my area to help my parents buy a house after losing theirs in the April tornado outbreak and also to stay informed on the values in my area and I have noticed several foreclosures on that site only listing the 2nd position loan as the loan in default and the reason for the foreclosure and the loan balances are not high at all. I saw one home being foreclosed by a 2nd with a balance of $25000! Is there any way I can find out if the 1st is current and/or in the money and that is why the 2nd is foreclosing? It just has me worried to see this since my home is $40000 underwater on the 1st mortgage alone and I still have not found a job so the 2nd is unpaid now for 10 months. I did not reaffirm the 2nd in our chap 7 so we have not heard a peep from them yet nor have I contacted them other than to authorize contact for a settlement. Our 2nd is with HSBC. Any thoughts?
 

ivanela

LoanSafe Member
Jan 6, 2012
4
0
0
Calf.
Great Info!!!

This is gold!! Thank to the OP for this information.

I'm in a similar situation. I have actually stopped paying on my 2nd for a while and have not responded to their occasional letters or calls I've received from them. I have actually received some offers from them at a reduction rate of 70% but I don't have the money now to give them that lump sum.

However, my problem I'm facing is my primary mortgage is a balloon loan that is set to expire in April of 2012. With my my credit having dropped and with a charge off with my 2nd, refinancing is not on option apparently. I have always been current with my first, am employed and willing to stay in my house.

I'm looking around to see what my options were. I called my mortgage company on Friday (Nationstar) and I apparently didn't qualify for the the HAMP modification. They said they would look into traditional in house modification but I really don't know what to expect. I've heard all kind of modification nightmares and I just want to be proactive in what I can do.

Any suggestions from member who have experienced something similar would be greatly appreciated.
 

MDHomeowner

LoanSafe Member
Jan 8, 2012
1
0
0
Hi Tom and all others. I did read the first post, and then some, but I am not sure if my second is "in the money" or not. We are in Maryland. We have a first mortgage of 453,000.00 with CITI the second is 97,000 with WF. We bought the house for 581,000. Zillow currently shows the house for 444,200.00 and the tax assessment is currently 451,000.00 down from 679,200.00 in 2009. Houses, the closest comps in our area, are selling between 430 - 500.

Basically we are in a new development where this price range will get you a brand new home across the road in another new development which is making more progress than the development our house is in. The development we live in isn't finished being built out, and had some bad press for a while so things stalled. I can't see the house regaining the purchase price in two years. AND we have an interest only loan that is going to appreciate in two years. We really want to get the loan to match the value if at all possible. We have a lot of other debt to take care of. We have really good credit credit, but can't take advantage of the refi options b/c the house is underwater. We are not behind any payments, yet, but we are paying for nothing, b/c we have an interest only loan, and the only true equity would be the money we put down when we bought. If we tried to sell, we'd lose that money, but wouldn't be able to sell for a price to cover both loans as they stand.

We are willing to stay in the house a few more years, but only if we can get a principal reduction. Should we hire a lawyer? Would we have trouble refinancing the primary loan if we stop paying the second? Is settling the second even an option? I am probably posting this in the wrong forum, and I appologize. Please let me know if I should ask my question elsewhere, and any advice would be so appreciated!
 

lynnd

LoanSafe Member
Sep 17, 2010
98
2
0
Hello All - It's been a long while since I've last posted an update and reviewed the posts (still on page 77). In reviewing the most recent updates, there were questions in which I may have some insight from my experience. I'm in CA. I stopped paying the 2nd 10/2010-Lender WF. It was eventually charged off. To date, it is in the third collection agency. The 1st was Primary Financial Services -someone recently inquired of them. It appears when they don't have any luck in collecting, WF contracts with another CA. With all of them, I have proposed 5% settlement (in writing) when they send me their letter acknowledging who they are, etc. I know this is frowned upon in the strategy but read on. I find the C.A.s counter back with 40% in which I ignore. And yes, months do go by in which I ignore the calls. Fast forward, the third C.A. countered my 5% with 20%, I declined, ended conversation and ignored more calls. On 12/20 I get a call from the supvr asking if I wanted to take "advantage of the year end special", I laughed and said what is this Walmart! and asked what the year end special was? He said 10% to settle if received by the end of the year. Still being unemployed for 1-1/2 yr, I couldn't but..... after much prayer, thought, etc. I thought if they called back I would hit up family to borrow and let it be done. They called on 12/28 and offered the 10% once again. IWe began the details, etc. and I waited for their contract via e-mail due to the timeframe. Never got it. I get a call on 12/29 saying "their client" (WF) did an analysis and a profile on my account, since I'm current on my 1st and still in the home, they will not accept anything less than 18%! Needless to say I was livid and said a few words and hung up on them! I got a letter proposing the 18%. You would think they would have discussed the bottom line with "their client" first before offering me the "year end special", I told them, it sounds like games to me. Also, to note, it appears when a settlement conversation does take place, the calls subside for a short time. And after a while, you get numb to the calls, letters, threats, etc. Finally, it wasn't my intention not to pay even though the home is underwater but WF refused to work with me, so it is what it is and God has given me a peace that it'll all work out one way or another. Just thought I'd send the update for those beginning this process. There is hope.
 

Wisconsin guy

LoanSafe Member
Dec 3, 2009
119
10
18
Great White North
State: Wisconsin
Property Value: ~290K
1[SUP]st[/SUP] Lender: Bank of America- modified
1[SUP]st[/SUP] Loan Balance: 294K
Purchase money? Yes
2[SUP]nd[/SUP] Lender: OneWest (indymac)
2[SUP]nd[/SUP] Loan Balance: 73K
Purchase Money? Yes

Only question is to what Wisconsin (recourse state) will do once (if) I end up settling with OneWest? Can the bank come after me for the money after settlement? Will whatever is charged off be included as "income"?
Many thanks!!
 
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