Dealing with heloc nightmare

[maddog2112]

Hello all. I`ve been ch7 discharged for 4 mo., and did not reaffirm my 1st or heloc. I am currently current on the 1st and the heloc put 3000 in late payments to the end of the loan, which brought me current there too. The first and 2nd equal approximately what the house is worth. The problem is with the heloc (fifth third bank). The original loan was a fixed 8% and since the $3000 has gone to the end of the loan, they are still charging the default interest rate as 14%. I tried to modify the loan to get a low fixed interest rate, and maybe a lower payment to no avail. I`m now wondering if threatening and not paying the heloc for a few months will motivate 5/3 to change their mind. My 1st is 187k and heloc is 77k. The home is worth about 250k. I wish I was upside down, as it would be much easier to settle the heloc. Any experiences out there with my predicament?

[maddog2112]

Ok, update on my 2nd heloc. I made a last ditch effort to the loss mitigation guy I had been talking to. After applying for a mod 2 weeks ago, they have decided to mod the loan. The new terms are 2years at 6.75 interest fixed followed by 7% fixed for the remainder of the loan . The payment goes from $1060.00 to $585.00 and then $608.00 for the remainder of the loan. I see this as a win win , since the first and 2nd are equal to what the home is worth. I`m not sure if this is a legal back door reaffirmation agreement, but either way I am happy with the outcome. The 1st is not reaffirmed and both are current. The new payment will make it alot easier stay current. Hope this helps someone out there.

[Amy26]

As you did not reaffirm in bk, I would check your mod papers carefully... I am guessing that you will now be on the hook for the loan should you ever get in trouble later and will not be able to walk away. Since the old loan was technically discharged, they are probably writing you an entirely new loan... unless they are being sneaky and just altering the terms of the old one. Dunno... but I would definately read the papers carefully!

Congrats though! I am happy for you.

[maddog2112]

Amy, I`ve heard conflicting reports on weather a loan mod would actually be a new loan and not subject to the discharge. To be honest, i`m not sure. In my case the old loan terms were almost impossible for me to catch up with and the interest rate was 11- 14% variable, with a much higher payment. the house is not upside down, so even if I were on the hook for a new loan, selling the house would most likely cover it. That is why my negotiating position was not very strong. I`m happy with the terms at this point and will try to pay this thing down as soon as possible.

[Amy26]

Yea I don't blame ya... you are one of the lucky ones!