Posted on: 19th Aug, 2009 07:27 pm
Hi there we have a first mortgage with wells fargo for about 127,000 and a heloc also through them for 145,000 right now our home is worth at most 90,000. My husband's work has really reduced his hours and we have fallen behind on payments for both. I started working and right now we are trying to get caught up on the first but we're still behind on the heloc. When I called the bank they said something about starting a charge off since they couldn't really work with us on payment arrangement since last year they gave us a modification on the heloc which lowered the interest rate for 1 yr and that expires in Feb 10' so can someone tell me what this charge off is and how this would affect our first loan and would they foreclose on our home we really don't want to lose it.
Thank you any advice is greatly apopreciated!
Thank you any advice is greatly apopreciated!
When a borrower is not able to pay the borrowed money, bank may issue a credit charge off. Charge off doesn't mean that the debt is cancelled or the lender may not come fater. All it implies is that the unpaid debt will be reported as the creditor's loss when he uses accounting methods for tax purposes
The creditor may feel that he cannot collect the debt from you; he may write off the account as a bad debt. But he doesn't lose the right to collect the debt. There is also possibility that they may seel it to a collection agency and you need to deal with them
The creditor may feel that he cannot collect the debt from you; he may write off the account as a bad debt. But he doesn't lose the right to collect the debt. There is also possibility that they may seel it to a collection agency and you need to deal with them
thanks for your quick response.We are 1 payment away from catching up on the first, would they still be able to foreclose on our home even if our payments with for the first are up to date?
hi guest,
it is unlikely that your lender will foreclose on your house even if you are current on your first mortgage. if the house is worth $90k at most and the balance on both the mortgages far exceeds the property value, it will not be worth their while to foreclose. so, as long as you are current on your primary mortgage, your house will not be foreclosed. if the second mortgage has been charged off to the collection agency, they may come after you to collect the debt. but they, in all probability, will not be interested in foreclosing your upside down home.
it is unlikely that your lender will foreclose on your house even if you are current on your first mortgage. if the house is worth $90k at most and the balance on both the mortgages far exceeds the property value, it will not be worth their while to foreclose. so, as long as you are current on your primary mortgage, your house will not be foreclosed. if the second mortgage has been charged off to the collection agency, they may come after you to collect the debt. but they, in all probability, will not be interested in foreclosing your upside down home.