Bank of America-Heloc (Settlement)

[1richard1]

Whom here has had experience in obtaining a "settlement offer" with their heloc, 2nd mortgage lien secured by the property?

Our mortgages were included with the Ch. 7 bankruptcy process, no re-affirmation agreements. Continued to reside at the property, CA and current on payments to first lienholder. Second mortgage lienholder is BOA, different bank. Advised by attorney to discontinue all payments on this lien till a settlement offer is proposed. Unlikely BOA would foreclose as 0 equity in the home, further 1st mortgage balance just slightly below property value. Meaning for BOA to foreclose, they'd be required to payoff our first mortgage. Based on comparable homes sales, balance of mortgages BOA would loose well over $100 k, if they attempted foreclosure proceedings. They'd be required to payoff our first mortgage, attorney fees, 0 equity to even cover the heloc.

Attorney's advice: File Bk 13 in 4 years if property values decline further, lien strip the BOA heloc. Or, if property values increase refinance through Fannie Mae or FHA and offer BOA a settlement of approx. 25% of original loan.

Anyone have personal experience with BOA 2nd mortgage, heloc settlement offers?

[tcreegan]

Hi 1richard1,

Do a search on the forum for BoA settlements, awhile back several people were posting about settlements.

From the dim recess of my memory, it seems like the lender wouldn't play ball until a number of payments were missed, then they come to the table and accept 5-10% as settlement.

Good luck with it, let us know how it turns out!

Tom in Colo