HELOC settlement question

[rck3]

Ok so quick facts, we filed chp7 back in 2010. Our 1st and 2nd mortgages were discharged and we have never reaffirmed. I talked to my 2nd (USAA) that next year and was informed it was charged off but have never heard anything in the last 9+ years from them. I had tried to do a refi about 2 years after but could not as the 2nd would not allow. I ended up doing a loan mod a few years ago on the 1st and we have been current since. I still would like to refi but I also always have the worry the 2nd might foreclose so I would really like to get rid of the HELOC lien. The house is likely worth about 200k and owe about 150k on the 1st and 30k on the 2nd so not underwater.

I would like to try to see if 2nd will settle as I do not have 30k but could pay off maybe 10k to clear this. If they said no that's fine, we will just keep going but I am kinda afraid of basically reminding them and causing them to initiate a foreclosure as we do not want to move. Should I try sending a settlement letter or am I risking having them initiate foreclosure?

[justbroke]

My personal analysis is that this is a risky proposition. The HELOC is likely in a better position now than they were 9-10 years ago (during the housing slump). Did USAA sell the HELOC?

Your only option may be to refinance all the liens into one loan. If you are prepared to do that, and can be approved for that, then you could take the chance by "poking the sleeping bear."

By poking the sleeping bear, I mean to approach USAA for a settlement. The problem is that they will likely run an automated valuation and see that the home supports the HELOC. That may then wake them up and they may pursue the foreclosure option... just as you mentioned.

[gamama]

Hi - I have the exact same situation.

What did you do?