GMAC Requesting Settlement Offer?

[yoyoma51]

So my wife and I stopped paying our 2nd mortgage ($18k) three months ago.

We have continued to pay our first ($95k).

Our home is currently worth $109k. Both mortgages are with GMAC.

We did not reaffirm in our BK.

Today we received a NOD for the second and I called a GMAC "loan counselor". He requested we make a settlement offer, in fact he suggested we offer $2k to make the second mortgage go away for good. I told him I would have to talk to my wife and get back to them.

I was thinking of calling back Friday and offering $1k.

One pro I can think of is that we will then owe less than our home is worth, and we're thinking of selling. Our area is actually a GOOD area to sell homes right now. We could come out $10k ahead in the deal.

Or, we can just walk away.

Any thoughts? Pros/Cons? Do we pay anything, hoping they write it off?

[AngelinaCatHub]

OK, I'm not a pro, but if you do anything outside of your bk, you could taint your bk as in a preferential payment. Sounds like a wonderful deal. I'm not sure if you filed or not from your post. If you have a lawyer, get with him on this and if you can dump 18K for 1K or 2K, I'd be picking up cans on the side of the road to get that money to kill that kind of debt. Keep the payments current on the first of course. Sounds to me you are in good shape. 'Hub

Edit: I stand corrected you have filed. Ask your lawyer. Sounds too good, I hope it is.

[debtmonster]

GMAC did the same thing with my 2nd mortgage. They offered 50% off. I asked my attorney why they would be willing to do that and they told me, "Because they know they will get $0 once you go bankrupt and the house is foreclosed and sold. Then the 1st mortgage would get 100% of the proceeds."

GMAC was both my 1st mtg and 2nd.

[justbroke]

OK, I'm not a pro, but if you do anything outside of your bk, you could taint your bk as in a preferential payment.

Since this is secured debt, the preference issues don't come into play. You do make a point though. Perhaps they could "redeem" the second mortgage inside the BK process? I don't know.

The offer suggested by GMAC was interesting (around 10%). A counter at 5% seems appropriate ($1K). Just to see what their appetite is. The issue for the poster, through, is that they are likely to get a 1099-A/C for the remainder of the balance.

Always make sure that GMAC is not going to sell the remainder to some Junk Debt Buyer (JDB). Ask GMAC if they are going to issue a 1099 or if they're going to sell the remainder to a JDB.

[SleepWellNow]

I don't see why a 1099 would be issued when the second loan was discharged in the BK. If the loan wasn't reaffirmed, the money is no longer owed, right? The lender's only recourse would be to foreclose. I certainly am not an expert here, but I don't see where it would be financially feasable for the second lienholder to do so.

I have two rental properties I am trying to keep that have seconds on them. Both properties are up-side-down causing the second loans to be technically "unsecured". After the discharge, I am going to offer a settlement for a lien release. If they don't cooperate and I let the properties go to foreclosure, the second lienholders will get nothing and they can't come after me because the debt was discharged through my BK. I'm hoping this will be incentive to them to settle and release the lien.

[justbroke]

I don't see why a 1099 would be issued when the second loan was discharged in the BK.

This is a very good point though you're making. I really don't know if they could issue a 1099-C Forgiveness of Debt if the debt was actually already discharged.

The real problem is that I didn't remember that yoyoma51 had actually been discharged and did not reaffirm the debt. I completely skipped that part!

But I still have issue with GMAC settling and then giving the lien to a JDB. I would make sure that they are going to issue a Satisfaction of Mortgage (or whatever the required document is for your locale) upon settlement.

[yoyoma51]

GMAC Second Mortgage Settlement Update

OK, I just got off the phone with a "loan counselor" about our second mortgage. We pay the first mortgage on time every month and are not behind. BOTH mortgages are with GMAC.

The first person I talked to last week told be I could call, make an offer, he would open a file and forward it to loss mitigation. Loss mitigation would then contact me and it could probably be done in about 15 days.

Today I called back to make an offer, and of course I can't talk to the same person. The new person tells me there is a bunch of paperwork we have to fill out ("Financial Analysis Form"), send in a copy of income taxes, pay stubs, hardship letter, affidavit etc. It would then take 90+ days before someone got back to me.

After explaining that the last person told me something different (mainly that it would be much easier) she said she didn't know anything about that.

So I told her that we're are also thinking about just walking away, as that would be easier and faster.

Then she asks "what number is best for loss mitigation to reach you at" and "what we're you thinking if offering?"

So I gave her our home number and we would offer $1200.

Does anyone have any experience doing this with GMAC? Are we best off just walking away? Foreclosure wouldn't hurt our credit because our personal liability was discharged in our chapter 7. We just don't want to deal with moving right now.