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2nd mortgage charge off settlement

2nd mortgage is wanting to settle for 38,000. I am having a hard time understanding this decision on their part. What bothers me is the fact that they charged off the loan when we have upheld our end of the bargain....Pretty much, we sent them over $15000 in the last 8 months and brought everything current in February and have been making normal payments since and on time....according to the re-payment agreement we had with them. now they are wanting to settle for 38, 000 and agree that it would be considered a settled/paid charge off...what I am having a hard time with is the fact if they were planing on doing this from the get go, why did we have to jump through all the "hoops" just to end up shafted in the long run....If they were going to "charge off" the loan anyway....seems to me that if that was their intention why would they keep taking payments from us unless it was to put the screws to us. Basically by my calculations of past money we have sent and what they want to settle for, is more than what we took the loan out for.......It just doesn't seem fair....Is there a way to get them to lower their settlement offer? Which brings me to my next question, I can't give them $38,000 all at once, so if i settle with them and make payments, is the payments i send them taken off the 38,000 or is it taken off the much inflated price of the loan when they added "charge off" fees.....which raised the amount of what we owe to them by $10,000?

jenkin7's picture
jenkin7 | Joined: June 4, 2007 11:02 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi dblmll,

If you have been making the payments regularly on time according to the re-payment agreement, your lender should not have charged off the loan. But as the loan has been charged off, you can now try to settle the debt for a certain amount that you are comfortable with paying. You can definitely negotiate with the lender to lower their settlement offer. If you cannot pay the money at once, they will probably set up a trust account where you can make the payments on a regular basis. If there are any charge off fees, that will be included in the amount you pay.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi,

I have a 2nd mortgage that used to be with BofA, but now turned to a third party. Currently, I am negotiating with them for a modification of the loan and possibly a settlement amount also. My question is: what is the lowest possible settlement percentage if the holder is not a charge-off account?

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savior70's picture
savior70 | Joined: March 25, 2009 05:14 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

To n.tom,

There's no such lowest possible settlement percentage. How much you can settle the debts for depends entirely on your lender and your negotiation capabilities. What other lenders accept as settlement money, may not be enough for your lender and vice versa. Thus, it is hard to say what would be the lowest possible settlement percentage in your situation.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

i stop paying my 2nd morgage around may of 2009. i recently got a letter from a law firm also know as debt collector. my question they offer to settle my 42,000 loan for 4200 and claim the account will read on my credit report as settled in full/zero balance. i call my bank and they claim my account was charge off and sent to this debt collector.i thought if an account was charge off by a bank i should have recieved a 1099c. then why pay and settle with the creditor?

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jerry's picture
jerry | Joined: October 17, 2005 03:24 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi hugo,

When your bank charges off your debt, it does not always suggest that they will not come after you for the mortgage balance. It simply means that they will report the debt as their loss for accounting reasons. Your bank sends you 1099C Form when they have forgiven your debt and decided to not come after you to collect it. This forgiven debt amount will be considered as your income and you will have to report it to the IRS. But in this case, you are still responsible for the debt and you need to pay it off.

You negotiate further with the debt collector and settle the debt for less than what they are currently demanding. Before you pay them anything, you should get everything in writing, for instance, how they will report the debt to the credit bureaus, etc.

Thanks,

Jerry

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patrickd1958's picture
patrickd1958 | Joined: September 15, 2010 09:50 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

I just got off the phone with BofA's Payoff Dept., he told me BofA does not accept cash settlements for any loans. Has anyone heard of this nonsense? Because my next approach is BK in which I really don't want to do.

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jerry's picture
jerry | Joined: October 17, 2005 03:24 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi patrickd,

Accepting cash settlements may vary from lender to lender. Most lenders normally accept cash settlements. You should contact Bank of America once again and negotiate for the cash settlement. If you can convince them, they may agree to your request.

Thanks,

Jerry

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patrickd1958's picture
patrickd1958 | Joined: September 15, 2010 09:50 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Has anyone negoitiated a cash settlement w/BOA for 1st or 2nd loan?

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

We had a second loan with Indymac. We filed for [url=http://www.mortgagefit.com/bankruptcy/chapter7.html]chapter 7 bankruptcy[/url], then got a modification on our first loan with Indymac and we are current on payments. In the meantime, they sent our second loan to a collection agency. When I called the CA to set up a payment plan they said they could not work with me because we had filed for Ch. 7 and therefore, they had to return our second loan to Indymac. Indymac says they don't have our loan and they assure me the CA has it. The CA says they don't have it. No one will accept a payment on the 2nd loan. Thoughts?

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

We are in the process of negotiating a cash settlement with BofA for our second, so they do indeed settle. In fact, we just got the letter from them accepting less than 10% of the outstanding balance, but we have 1 week to pay it or the settlement offer expires.
Our situations: Our first and second were with BofA. We completed a short sale in March, where the first was considered settled, but the department that handled the second wouldn't accept the short sale terms as settling the debt. We were contacted by a third party (Solace Financial) regarding this debt and they have been surprisingly great to work with. BofA had tried contacting us directly, but as we had moved and they were sending the letters to the old addy (that we no longer owned), the letters didn't catch up with us until about the same time Solace contacted us.
So, yes, BofA does settle.
Oh, and if you are trying to do a short sale with BofA, let me tell you, it's a nightmare (it took over a year to do). They lost so many docs in our process it was insane. Finally, my hubby found the email addy for the VP of that department and sent him a letter explaining our circumstances and how the bank had dropped the ball. It was a virtual cake walk from there.

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smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi TJ!

Welcome to forums!

Your query has been replied to in the given page:
http://www.mortgagefit.com/minnesota/second-chargeoff-1.html#191098

Take a look at it. Hope it helps you.

Sussane

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patrickd1958's picture
patrickd1958 | Joined: September 15, 2010 09:50 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

I have a 2nd loan with BOA (home equity line of credit) since May 2005. I have not made a single pymt since Nov.2008, because we been trying to get the 1st lender Wells Fargo completed first. Finally after 18 mos., we got a fix rate 4% and made our first pymt Nov. I want to do a cash settement with BOA (loan amount 142K, behind 22K). I spoke at 2 separate times with the payoff dept and both times they say that BOA are not doing any cash settlement with any loans. I find that hard to believe. Our only option, when press by BOA is to file BK 13. I hired a BK laywer, but I don't want to file BK. Does anyone have a suggestion?

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jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi patrickd,

It might be the policy of BOA to not go for cash settlements with the borrowers. You can contact BOA and ask them to modify your loan for suitable terms and conditions. This will not only help you in paying off the dues but you will also be able to save your property.

Thanks

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I'm also looking to settle my second with BofA. If anyone can help with the appropriate contact within BofA I'd really appreciate it. I just spent 3 hrs trying to find a contact in BofA and they gave me the run around

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jerry's picture
jerry | Joined: October 17, 2005 03:24 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Danny,

Check out the given page in order to get the contact details of Bank of America:
"https://www.bankofamerica.com/contactus/contactus.go?HTTP_REFERER=&SOURC...

Thanks,

Jerry

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Was anyone able to do a cash settlement with b of a? I stopped paying my second and 90 days letter I have a foreclosure date and notices!

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Niicss's picture
Niicss | Joined: October 3, 2005 11:54 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

You will have to negotiate with your lender for a cash settlement. It will depend upon your lender whether or not he will consider your request for cash settlement.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

My Ca home had a Bof A 1st and 2nd. The home was foreclosed on last August. I've received the 1099c for it. The 2nd has just sort of languished until last Friday 3/4/11. I was contacted by Solace Fincl about how to handle it. Thanks to this thread I have a much better idea of my strategy . I have some semi-liquid assets(a retirement annuity) which I have tapped once to settle 2 credit cards and some cash on hand. Wish me luck.

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sara's picture
sara | Joined: July 5, 2006 03:16 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

All the best, Aprilian :-)

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

BofA has screwed us up and delayed our short sales. We have lost eight buyers in the past year. BofA is the [url=http://www.mortgagefit.com/second-mortgage.html]second mortgage[/url] lender and is totally unsecured by any equity. I have file BK7 and have wiped away their note. But the mortgage remains. So, I would like to make them an offer to settle and release the mortgage. But, no one I have spoken with at BofA knows who to work this out with. Most say it can't be done - they don't settle! If you know who to contact to settle this out, please give me a name, title, department, phone number, and email address.

Your heol would be most appreciated.

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adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Welcome Guest,

Your query has been replied to in the given page:
http://www.mortgagefit.com/know-how/about50285.html

Take a look at it. I hope it will help you.

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