question for those who have defaulted on their 2nd mortgage

[albacore44]

It was asserted in another forum, that investers are now buying defaulted underwater 2nds, foreclosing, then at the Auction, negotiating a short payoff to the 1st, and taking control of the property.

anyone have this happen ?? anyone know of this happening ?? how wide spread is it ??

thanks

[laurannm]

I ran across something similar in another forum as well (might be the same one you are referring to), but I'm not too sure it's widespread. It seems like more a possible scenario, albeit unlikely

[WanabeFree]

I certainly have not seen or heard of it accept at the unnamed other forum as mentioned. I would think that for this to even work the second would have to small enough to allow the first lender if so inclined to take a haircut, so to speak otherwise it could take years for there to be any profit to be made by the investor.

On the other hand I am sure that underwater 2nd mortgage lenders are staying up late at night trying to figure out how they are ever going to dig out from this mess. So nothing would surprise me as to there next tactic to try and collect on these toxic underwater loans.

My question is how much longer will they wait before they take desperate measures to recover. With the economy basically in a holding pattern something has to give sooner or later. I certainly do not think they will just go away without kicking and fighting or worse yet another government bailout !

[albacore44]

I certainly have not seen or heard of it accept at the unnamed other forum as mentioned. I would think that for this to even work the second would have to small enough to allow the first lender if so inclined to take a haircut, so to speak otherwise it could take years for there to be any profit to be made by the investor.

On the other hand I am sure that underwater 2nd mortgage lenders are staying up late at night trying to figure out how they are ever going to dig out from this mess. So nothing would surprise me as to there next tactic to try and collect on these toxic underwater loans.

My question is how much longer will they wait before they take desperate measures to recover. With the economy basically in a holding pattern something has to give sooner or later. I certainly do not think they will just go away without kicking and fighting or worse yet another government bailout !

Yes. i think people defaulting on 2nds is really starting to take off, particularly since they make it difficult to short sale, so it becomes easier to default on the 1st and 2nd and just walk away

[HHM]

Still VERY unlikely. Is it possible, sure, does it happen, not that often. The numbers rarely make sense for them to do this and the 1st mortgages have no incentive to go along.

[lisamomof4]

i saw this mentioned on other forum also...and went searching...and not found any mention of it...i mean if it happened to someone you would think there would be some shred of proof...i know i would cavitch up a storm if it were me....i think it's very, very rare if at all....just one more thing for us all to worry over and wonder 'what if'. in my area property values are still falling so until things level out what would be the point??

[2manybills]

Yes. i think people defaulting on 2nds is really starting to take off, particularly since they make it difficult to short sale, so it becomes easier to default on the 1st and 2nd and just walk away

Albacore - you'll see my other thread with my update from Wells. They actually have their own "Liquidation Department" now. I may be close to settling and I will keep you posted as I know yours is with Wells also.

[albacore44]

Albacore - you'll see my other thread with my update from Wells. They actually have their own "Liquidation Department" now. I may be close to settling and I will keep you posted as I know yours is with Wells also.

no. my 2nd is with HSBC best of luck with Wells.

[feelingnutsy]

Hi---2manybills---where is this other thread about said update?
I'd like to see it---since I'm curious about this Liquidation Department.

[2manybills]

Hi---2manybills---where is this other thread about said update?
I'd like to see it---since I'm curious about this Liquidation Department.

"Wells Fargo Home Equity Line Settlement



I just wanted to post an update to my previous posts about attempting to settlement my home equity line with Wells Fargo. What I determined was that our loan was charged off in August and is now in the Wells Fargo "Liquidation" Department. I also found out that our home is now valued at $40K less than it was last year at this time. So I sent Wells a letter attempting to settle for $15K on a $200K loan. I was contacted by the liquidation department and he advised me that he discussed this with his manager, and he thought that if we can bring this amount up to 10% of the loan balance, that we probably could get it done. I agreed to offer $20K and he has sent it up for managerial approval. I will post once we get approval and hopefully, it will get done within the next week or so."

If you need the phone number for the liquidation department "PM" me and I will send it to you.