Thanks for your question. If you eventually settle with OneWest, the amount you pay them will be conditioned on their acceptance of the $$ as satisfaction of the note, i.e. the debt is extinguished.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"?
However, please know that the generally accepted rule is to get the 1st permanently handled before addressing a 2nd. If a borrower's 1st were to FC, the junior loans would become SOJLs (unsecured loans and virtually worthless).
For info about your potential income tax liability attributable to COD income, I recommend you consult with your tax person.