settled 2nd mortgage

[SleepWellNow]

Great job Nicole04!!! I settled a $62,000 2nd loan with Green Tree for $3,376. As you mentioned, the key is to let the lender think you are willing to let your property go to foreclosure whereas they will end up with nothing. Of course, this only works when the 2nd is completely "unsecured". In my case, they laughed at my offer and I said "Fine. It's your choice but, when the money is gone, it's gone. This was an unexpected windfall and I'm not expecting to have any more money to pay towards this". Then I waited. Two weeks later, they called me and said they'd accept my offer. I wired the money and they released the lien.

[RW3]

Great job Nicole04!!! I settled a $62,000 2nd loan with Green Tree for $3,376. As you mentioned, the key is to let the lender think you are willing to let your property go to foreclosure whereas they will end up with nothing. Of course, this only works when the 2nd is completely "unsecured". In my case, they laughed at my offer and I said "Fine. It's your choice but, when the money is gone, it's gone. This was an unexpected windfall and I'm not expecting to have any more money to pay towards this". Then I waited. Two weeks later, they called me and said they'd accept my offer. I wired the money and they released the lien.

Hi SleepWell,

I am working with Green Tree as well. I am around 180 days late at this point and already received a notice of intent that has expired. My balance on this 2nd/HELOC is around $46,000. It is completely unsecured as the value of my home doesn't even cover what is owed on the first mortgage. I've sent a settlement letter to them for $2500, but did not get a response. Most recently I've talked to a collections manager at Green Tree and the'd like me to send financials in to look at a possible loan modification. I really would like to simply settle this loan get rid of the lien and then refinance my first with the FHA, as I plan on staying in the home.

How far behind were you when you settled with Greentree, did you claim BK or have the home foreclosed or short sale? Any info you could provide would be greatly appreciated. Not sure if I can post my email address here though...

[nichole04]

Thanks everyone for your kind words. I did infact deal with the short sale department at citimortgage and I dealt with the bankruptcy department at suntrust. Here is a copy of the letter I sent to both banks:

To whom it may concern:

I am writing this letter to explain my unfortunate set of circumstances that have caused us to become delinquent on our 2nd mortgage. We have done everything we can to pay our bills but due to the loss of income we no longer are able to continue to make the payments. Therefore, we would like for you to consider working with us to settle our loan in full.

As you know, we have been discharged in chapter 7 bankruptcy and are free to just walk away from this obligation. "name of first mortgage" holds the first mortgage at "$ fill in amount". We had an appraisal done a few months ago and it came back at "$ fill in amount". If you would like to receive a copy of this appraisal please let me know. As you can see our property value is way down and may be less today. At this time I am writing you to see if we can settle this 2nd mortgage balance and have the lien released from the property for the lump sum amount of "$ fill in amount". Obviously, if we walk away and the home goes to foreclosure your chances of receiving any payment at all are bleak at most due to the fact that our first mortgage is more than the home is worth. We would appreciate your consideration to accept our proposal for settlement.

Sincerely,
(name)
acct# *****
phone# ******
email address: *******

[scorpion35]

they should make it illegal to just walk away from mortgages and auto loans
u should only be able to discharge credit card and medical debt
to much people taking advantage of this loophole
and everybody else that bought houses that could afford pays the price

[HHM]

they should make it illegal to just walk away from mortgages and auto loans
u should only be able to discharge credit card and medical debt
to much people taking advantage of this loophole
and everybody else that bought houses that could afford pays the price

Really, you have been on this forum for 10 months, made 365 posts, and that is your position.

The real estate market didn't crash because of people BK'ing their mortgages. BK is how we deal with the consequences of the crash which was caused by unsustainable hyper-inflation in the housing market which was in turn caused by irresponsible lending (and borrowing) in mortgages. If people weren't able to BK mortgages or settle, the situation would be even worse (in truth, it may not be such a bad thing to have a total blood bath in housing...if the banks and government would simply write down all mortgages, the housing collapse would end much sooner, instead, were in for a long slow bleed).

[scorpion35]

Really, you have been on this forum for 10 months, made 365 posts, and that is your position.

The real estate market didn't crash because of people BK'ing their mortgages. BK is how we deal with the consequences of the crash which was caused by unsustainable hyper-inflation in the housing market which was in turn caused by irresponsible lending (and borrowing) in mortgages. If people weren't able to BK mortgages or settle, the situation would be even worse (in truth, it may not be such a bad thing to have a total blood bath in housing...if the banks and government would simply write down all mortgages, the housing collapse would end much sooner, instead, were in for a long slow bleed).

people bought homes they knew they could not afford,used interest only mortgages,bought rental properties thinking the housing market would only go up up up.got greedy

[nichole04]

I totally agree with you HHM. The banks greed is what caused this mess not the poor homeowners who are suffering because of it. I chose not to walk away from my house but I am no longer legally liable for the debt on it which played in my favor in order to settle with my 2nd mortgages which were totally unsecured anyway. Just google foreclosure fraud, MERS, robo-signing, etc. and get educated on what homeowners rights are and then see who is to blame for this mortgage mess. I can tell you that it definitely is not the homeowners.

[helpmeout]

they should make it illegal to just walk away from mortgages and auto loans
u should only be able to discharge credit card and medical debt
to much people taking advantage of this loophole
and everybody else that bought houses that could afford pays the price

Fortunately,the BK courts believe in a fresh start. Unlike you.

I simply can't afford my house. My ex and I were able to afford it when we were together, even after the kids came as we didn't have childcare costs. But since the divorce, well, life changes. People shouldn't be kept tied to a house they can't afford.

[helpmeout]

people bought homes they knew they could not afford,used interest only mortgages,bought rental properties thinking the housing market would only go up up up.got greedy

What an ignorant statement.

[scorpion35]

What an ignorant statement.

hardly

[scorpion35]

I totally agree with you HHM. The banks greed is what caused this mess not the poor homeowners who are suffering because of it. I chose not to walk away from my house but I am no longer legally liable for the debt on it which played in my favor in order to settle with my 2nd mortgages which were totally unsecured anyway. Just google foreclosure fraud, MERS, robo-signing, etc. and get educated on what homeowners rights are and then see who is to blame for this mortgage mess. I can tell you that it definitely is not the homeowners.

did the bank force u to sign the mortgage papers?
where did the $150000 in 2nd mortgage go?
so u took out HELOC'S spent the money and now u walk away
i am not trying to be mean ,i just don't think its fair to just walk away

[SleepWellNow]

i just don't think its fair to just walk away

Scorpion - I'm sure there are people who don't think it's "fair" that you were able to walk away from your debt, be it credit card or medical. In fact, there are people who don't qualify for bankruptcy although circumstances are such that they can't pay their debt. If you want to take such a hard stance, why didn't you file Chapter 13 and set up a payment plan to pay your creditors off? Or, why didn't you set up a payment plan or settle with your creditors outside of bankruptcy? You probably had personal reasons why you made the choice you did just like others have their own reasons. All I can say is "Judge not, lest you be judged". I sincerely wish you the best Scorpion as well as you Nicole04.

[helpmeout]

did the bank force u to sign the mortgage papers?
where did the $150000 in 2nd mortgage go?
so u took out HELOC'S spent the money and now u walk away
i am not trying to be mean ,i just don't think its fair to just walk away

Just what are you doing on this board? To file bankruptcy? I think that you shouldn't be able to discharge any of your debt. After all, nobody forced you to borrow the money.

Making ignorant statments like you have been in this thread clearly shows that you have no concept of what a fresh start is. Fortunately, the BK courts do.

[HHM]

Yep, sort of a hypocritical position Scorpion35 since you filed chapter 7 and eliminated debt that you TOOK out and SHOULD HAVE known you couldn't afford.

The thing is, the mortgages were not inherently unfordable (at least not at the time). Sure, long term, going into a 3 year interest only payment is not smart, but it is not a question of affordability. The decision process is not that much different than taking on credit card debt. You borrow against CC's because you think things will stay the same or improve and you will be able to pay them off. Well, that didn't happen. The housing bubble made everyone blind, banks, consumers, etc. How many banks have gone under because of this (Lehman, Countrywide, Washington Mutual, etc), that degree of failure is not caused because Johnny next door neighbor suddenly woke up and said, "I am not going to pay my mortgage." As with all markets that have rampant speculation, they eventually top out. The underlying fundamentals of the local economy cannot support the prices when the speculative buyers leave the market (think of Vegas, Phoenix, Florida, So. Cal).

If anything, we should be thankful that people can cleanly walk away from mortgages and that 2nd mortgages are willing to settle, and that we can strip down 2nd mortgages in chapter 13. It is too bad that we cannot modify first mortgages in chapter 13, if we could have, the housing crisis would be mostly over by now.

[irb]

So, kind of back on track here. In my case my wife only filed ch7 because most of the debt was in her name other than the mortgage and a home equity loan with the same bank as the mortgage bank. Our 2nd mortgage is also totally unsecured and we've been paying it on time because it's also in my name. Do we have options or any chance of trying to negotiate a settlement with them since I didn't file and it's the same bank as the mortgage bank?