1st mortgage solved, here is the deal on the second

[albacore44]

. They sell them to JDBs for 10% or less and just wipe their hands of the mess. The JDBs will put "light" pressure on your to pay, or will just sit on the debt waiting for the earlier of you selling the home, or the home appreciating... at which point they can foreclose!


No, they could sell it to a Junk Debt Buyer (JDB) for 10% (or less). The JDB just sits on it for years, until you go to sell! Then voila, you have to pay the JDB!

I have seen this scenario posted a few times, I sure would like to hear of some real examples of this happening, and which banks in particular are more likely to do it

[notforsale]

Dealing with Citi on 2nd

I have been working with Wells for a mod on my 1st, during this time I was not paying anything to citi. Rather than talk to me they (citi) hired an atty and filed suit against me for default. I have since been able to pay enough to get them to reage and bring me current. They were not playing with the suit as I received all docs from our county courts to know this was no joke. I am waiting to file bk until after my mod with wells is complete. Currently have $130k in unsecured cc's non paid since Jan 09. Repo veh to local credit union balance of $5k. We owe wells $180k on the 1st and $43k to citi. Value of house around $200k, we want to keep the house after bk. I was planning to file and not reaffirm wells or citi and try to negotiate for 10% payoff of 2nd. Will this work?

[BKINAZ]

Hang in there NOT...

JUST thanks! I was def. not being combative, just wanted to be clear on what I was hearing. I clearly wasn't. Though your answers were solid and I feel a bit better talking to my second tomorrow.

We've avoided bk by paying off our debt at 25% (credit cards) and our custom lot went away to the bank. Being insolvent means we will get 1099's but it won't matter. The only thing left is an $80k second...we've avoided bk thusfar...but if they push it, we may have no other choice...which would suck.

I'll update the response I get from the second...it's getting pretty close to d-day for them.

[BKINAZ]

BTW we have been doing mortgage mod since march. We missed our 3 payments (as told to do...which is the dumbest thing) and are now currently on our 3rd set of three payments. Our payments in the first set were reduced from $2,500 per month to $1,700...the second and now the third set was lowered to $1,395 which is where we were hoping to end up.

My guess is it'll be that price for 5 yrs and then go up 1-2% each year after never going above...6? (where we are now...might be lower...this is just a guess)

[troubled]

My tale o' frustration...

So, after reading a lot of the info here I decided to try to work with BOA on a a loan mod for our second (Balloon with $93k left at 11.87%). After two months of calling them to follow-up on all the paperwork sent (and 4 months of not paying) finally got to the right person. They had never heard of our request. Went over everything with her then told our expenses are still too high to our income - of course she said if I sent them $2000 of the $4000 we are behind on it may help--um, no....

I've cut back a few things and I'm giving it another try this week. if it doesn't work I'll offer them a settlement %, which I would think they'd take since a foreclosure would lose them $$ (we still owe about $240k on the first and the house was appraised at $251,000 during the bk...

[winona55987]

Is there a special phone number for Citi that can get this expediated?

[spidge]

We've avoided bk by paying off our debt at 25% (credit cards) and our custom lot went away to the bank. Being insolvent means we will get 1099's but it won't matter.

I have heard of a form from the IRS to determine insolvancy without a BK but cannot locate it. Does anyone know the form #? Is there another way to prove insolvancy to the IRS?

[lrprn]

I have heard of a form from the IRS to determine insolvancy without a BK but cannot locate it. Does anyone know the form #? Is there another way to prove insolvancy to the IRS?

The form is Form 982 Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) - http://www.irs.gov/pub/irs-pdf/f982.pdf

You may also send the IRS a detailed letter with a financial statement showing your insolvency.

[StartingOver08]

lrprn is right. Also check out this publication...it will help with the form! lol

http://www.irs.gov/pub/irs-pdf/p4681.pdf

[ben1381]

Here is my latest story. I own home that I had appraised for BK purposes and real estate assessed value purposes at 215K. First mortgage with Citi is at 158K. After negotiating with Citi for over a year and even dealing with their executive response team and getting nothing I finally am getting a mod after a friend of mine who works for Citigroup got involved and put me in touch with a mortgage decision maker at Citimortgage. I am awaiting receipt of the mod papers any day. I also have a HELOC with Chase for 123K and about 110K in unsecured debt. I am planning to file Chapter 7 soon to deal with the unsecured debt and am applying for a mod from Chase on the HELOC. Now that I have a mod on the first getting a mod on the second I think is a lot easier. My BK lawyer wants me to file Chapter 7 after I sign the papers for the first mod but before the second mod is completed. I would like opinions on whether I should do this or wait until the second mod is completed before filing. RIght now there are NO active lawsuits against me(two were discontinued possibly due to creditor's lawyer error as well as an understanding from my lawyer that I would file BK) from CItibank credit cards but Amex CC is threatening to sue. I settled with Capital One CC making monthly payments until I file BK.