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

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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.
 

bigfrog

LoanSafe Member
Aug 31, 2011
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I don't know about the Foreclosure Mill. sounds B.S to me. If its for real, I haven't seen it. I am located in a prime real estate area, where home prices not just recovered but over increased another 100k. I am waiting for them to foreclose for the last 10years, and still nothing. just freaking phone calls. and messages asking me to call them back. My most recent talk to them was another joke. They asked me to start paying or they will "Re-Evaluate". Told them to not waste time, and go straight to foreclosure because they aren't going to see money from me. They said they will reevaluate and send out something. after a month, they send out some workout options. I was expecting a threat or foreclosure notice. They were weak sauce. From what I noticed, they were trying to avoid two big words... BK and Foreclosure.

Every time I talk to them, they start out asking what is that I am going to do, or what is my plan. And every time, I told them that I am going to live in it without paying them. And it doesn't appear to be working, like they don't understand English.
 

bigfrog

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Aug 31, 2011
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I am in the coast of Southern California. The weather is great.. we are in windy season, a little fire here and there.. but over all its great. no floods, no hurricane.. people said we are expecting some major earthquake, but I have been waiting for the big quake for the last 30years.. barely getting little shaking here and there. I still remember people were warned to buy food supply to store in various places, like their car, in 1990s. And in 1995, I was at a junk yard looking for car parts, and saw food supplies in many cars. The cars with food supply were junked before food was rotten.

Getting a bit off topic... but what I am getting at is that Foreclosure probably doesn't exist. Its like winning the lottery... look around you, do you know anyone that won the jack-pot? Yeah, people lost their house, and that is because they walked away, or it probably got burnt in a fire.
 

walkinginCLT

LoanSafe Member
Aug 31, 2011
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SLS finally after a 3 month runaround responded to our offer of 12k (ish) on 30k principal, 72k with all interest. They refused a penny less than full payoff. No worries. We have this house rented and currently in a 3 year lease. I doubt seriously they will foreclose. First mortgage is current, and if they payoff first, they could probably clear the full second (72k) but not without some work. 15 year old ACs, 15year old roof, siding needs repair. I'll just wait on them and hope they sell the second lien. Ill try and buy it. This is no longer on my credit and they wanted me to modify it, accepting a new principal of 72k. That would be plain stupidity. Especially with the threat of recession soon. I'll let them take the risk.
 

bigfrog

LoanSafe Member
Aug 31, 2011
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WalkingingCLT... that's exactly what I am saying. We need more people to step up and fight this shhh... More and more people are becoming homeless. Allowing lender/bankers/mortgage industries to bullying the consumers around. Allowing them to put a ridiculous high price on a home, and selling it to someone who guarantee to default is all BS.

Help the homeless by not paying your mortgages. No money going back to the lenders, the banks will fail, just like in 2008. this time, no one will want a bailout.. we messed up with the bailout. Like everything there is a cycle, the cycle needs to be reset, and everything will be back to normal-Balanced.