HELOC settlement advice ?

Guest

I have a 1st mortgage 322K and HELOC 175K. I am current on both. My home value is $370-400K. I live in FL. My problem due to drop in income my home now comprises 53% of my gross income. If I was able to eliminate the HELOC I would be OK. To that end I am trying to negotitate a payoff of the HELOC. I do not have any savings but I can borrow from family if I know that I can save the house. I called the HELOC lender but they told me that I should try to work something out with the 1st lender.
Questions:
When should I make the offer to the second? While current or should I stop paying?
Should I wait for them to make the 1st offer?
How much should I offer? I was thinking 10% and hoping to settle under 20%? Is this feasible?
Based on the home value will the second foreclose? What will happen?
I have very good credit and this is my only debt. Thanks for all you suggestions and advice?
Florida1

adonis · Posted: Wed Jul 29, 2009 11:47 pm Post subject:

Hi Florida,

As there are two mortgages on the property, it would be difficult for you modify the HELOC. As you are current with your mortgage payments, I don't think the second lender would be ready to negotiate with you. However, you can apply for a loan modification with your second lender. If the lender is convinced about your situation, he may agree to it. It will be the lender's discretion as to how much interest rate he would reduce.

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