Trying to Settle 2nd with SLS

walkinginCLT

LoanSafe Member
Aug 31, 2011
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In my research, can they not just foreclose and sell the second position and then person who buys it has to deal with the 1st lien and SLS get their principal back?
 

Jzone

LoanSafe Member
Jun 20, 2017
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In my research, can they not just foreclose and sell the second position and then person who buys it has to deal with the 1st lien and SLS get their principal back?
Speaking only from my Michigan perspective, yes, a second can always sell/assign their lien to another debt collector. That would usually happen when the second lien holder realizes that they probably are not going to get any money out of the deal and cut their losses. So the lien they bought for pennies on the dollar, gets sold to another debt collector for pennies on the dollar.
Also, in Michigan and some other states, a second lien holder can bring foreclosure proceedings. However, they must pay off the first mortgage/lien holder also. They cant just foreclose for the second only.

So in my case, I filed chapter 7. Both mortgages discharged and not reaffirmed. Kept paying the first, but stopped paying the second. Second was assigned to debt collector. The tricky part is that its not a debt anymore; the debt was discharged, but the lien remains. So they are a lien holder attempting to enforce a lien, not a debt collector attempting to collect a debt. There is a big legal difference.

So whether they keep the lien or sell it, they still have to deal with the first mortgage holder to get any proceeds from a foreclosure sale.
 

walkinginCLT

LoanSafe Member
Aug 31, 2011
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From what I'm reading about NC, they (the second) can foreclose and sell the secind lien and then that buyer can force me out. I'm trying to read actual caselaw from NC on this but as you can imagine there isnt a lot that I can find.
 

walkinginCLT

LoanSafe Member
Aug 31, 2011
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I dont think the SOL starts running until the loan is actually accelerated. At least based on the case law I have seen. So 10 years from acceleration which hasn't occurred yet.
 

just_me

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Sep 14, 2015
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I dont think the SOL starts running until the loan is actually accelerated. At least based on the case law I have seen. So 10 years from acceleration which hasn't occurred yet.
SOL start is date of last payment.
Acceleration typically starts with a 30 day NOD demand letter (Notice of default or Notice of Intent).
 

walkinginCLT

LoanSafe Member
Aug 31, 2011
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I can see in my online account with SLS that they are getting property reports for the last 3 months. They have them listed as appraisal reports but there is nothing about price in them just some photos and acknowledging the outside isnt destroyed.

I am willing to settle this thing for the principal balance. Is there any reason they would take that? I mean that's what they'll get at a foreclosure sale right? Would they accept full principal from me to avoid the hassle? They are not budging about sending my offer to where it needs to go without 1st payoff statement.
 

OneHugeMess

LoanSafe Member
May 30, 2016
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I know for a fact that SLS mainly relies on Zillow & CoreLogic Estimates (use the Chase "how much is my home worth for this number) for analysis, and when they begin due diligence on a file, they hire a local realtor or agent to perform a Broker Price Opinion.

One thing I would really like to point out to you all, is it doesn't cost anywhere near $50,000 to carry one of these cases. They hire "foreclosure mills" which are law firms that basically do these cases in bulk, for a little under $2,000 generally. In a case of a 2nd (or extremely rare) 3rd Mortgage -- there needs to be at-least 50% equity for the 2nd Loan, after paying off the first and any delinquent taxes, or HOA Dues -- before they can even submit the file for a possible recovery. Than -- with investor approval, they will begin the process of foreclosing and hiring a local law firm.

One very helpful bit of information is - I know for a fact they look at the first mortgage against the property, and they do not discount it. So, if your original principle balance was $160,000 in June of 2005, they model and value the house with that full $160k outstanding. Unless... the borrower willingly turns in payoff statements or copies of the Loan Statement for that loan.

I also know - they are extremely reluctant to provide any sort of discounted pay off, if the loan is completely above water. And they will check, before receiving a offer. You are far better off trying to work out a deal with a third-party-collection company, if they are also handling the debt in conjunction with SLS.

Lastly, I would NEVER give them your financials or mortgage statements, not even property tax statements. Do not show them your hand and stack of cards.