Foreclosure University Settlement

Rental home foreclosed in California

March 21st, 2012 by Jarad

Question:  I have/had a rental home in California. The bank (Chase) held the 1st and 2nd on the home. They foreclosed on the home and have since sold/auctioned it off. However, they (via a debt collector) are continuing to contact me in an effort to get me to pay off the 2nd/equity line ($32,000). I do not have that kind money and am struggling to hang on to my primary residence. What can they do to me and what are my options?

Answer:  – Your best option is to work with them and try to reach some sort of agreement, pay plan, settlement or payoff. If you can’t work something out, most people will file bk. In many cases, if you let the bank know you are serious about filing bk, they will work something out with you. We’ve been very successful in settling 2nd mortgages before they go to auction but you can still do the same after the auction to avoid the deficiency judgment.

Can my 2nd mortgage (heloc) foreclose on me?

March 20th, 2012 by Jarad

Question:  I have done a loan modification with my first mortgage and have been making the monthly payments every month with no problems. We have a Home Equity with another back which we have not been making the payments for that for over a year now. That bank is now sending us Notices Of Intent To Accelerate. Can they foreclose on our home even though they are not the first mortgage and we are current with the first mortgage company. what can this bank do to us?

Answer:  – This question comes up all the time. For some reason, many homeowners don’t believe the 2nd mortgage can force the sale of their home. In most cases, your home is collateral for the loan. That’s why when you get a 2nd mortgage, they want to make sure there is equity in the home so they can get paid if they have to foreclose. Even if you are current on your first mortgage, doesn’t matter. The 2nd mortgage can still foreclose and force the sale of your home. Although they would prefer not to because very likely they won’t be able to sell it for what they are into it.

So they will incur both foreclosure costs and lose out if the home is upside down. This is why they are so willing to work with us and other investors in settling those 2nd mortgages because they would prefer to have something rather than nothing. In any case, you will eventually lose your house if you continue on this path so it makes no sense if you are not paying your second, might as well not pay your first either. A better solution if you want to keep paying your first, is to work out something with the 2nd… basically a settlement. You’ll agree to pay them x amount to satisfy the loan.

If the 2nd forecloses, more than likely they will issue you a 1099 or they will file a judgment against you for the difference. When this happens, you can either choose to pay the judgment or the loss that was incurred from the sale or you can file bk. Hope this helps.

Short Sale? Can we Settle instead of payment plan?

March 8th, 2012 by Jarad

Question:  We are in the process of doing a short sale to sell our condo in Illinois. We have a mortgage and a line of credit through Wells Fargo. The mortgage is approved for short sale, asking us to bring $20k to closing. The line of credit is almost approved but they are saying that we will have to settle that loan AFTER we close by setting up a payment plan. We cannot afford to pay on this line of credit and we are now considering foreclosure. If we foreclose, can the bank come after our assets? Can the bank come after us for the line of credit? We are moving out of state. Will we have to go to court? Will foreclosure permanently be on our record, or just for 7 years? Will we be able to get loans in the future? Thank you for your help!

Can I Short Sale My HELOC?

March 1st, 2012 by Jarad

Question:  I may need to short sale my home in Washington DC. My second is a line of credit of $80K. Is it possible that that lender approve a short sale, or will they automatically not, just because it is a line of credit and not a regular mortgage loan?

Counter offer to HELOC settlement

February 28th, 2012 by Jarad

Question:  Hi, many of these subjects are interesting but my questions and situation is a bit different.
After going through a long process with my 1st mortgage, finally a loan modification with a 3 month trial is being worked on. Still owe about 145,000 on 1st mortgage. House value is now around 50,000. Took a HELOC of 30,000 of which I still owe 24,000. After unemployed and some rough times, just getting back on my feet. Heloc lender wants a lump sum at this point of 19,500. If I can’t come up with it then a down of $4,500 and a monthly of $200. If I could I would but can’t. I counter offer $50-$75 month. My weekly budget has no rooms for extras. I have not heard on my counter offer. Can you explain what will happen if they don’t accept to me, my house which I am trying to keep and working with my 1st lender. Thank you for any help or suggestions you can provide. will look out for a response.

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