HELOC Potentially Charged-Off; Letter from Attorney; Next Step?

[gwenny]

I've posted this in one of my other threads but have not received any responses since I did so on 10/21. I thought that perhaps I should have started a new thread, so here it is:

 

My state: WV

 

Please, I hope someone sees this and can offer advice. We had a HELOC with Wells Fargo. The dollar amount is just under $90k. The last payment we made was in January. We tried repeatedly to work with Wells Fargo but they were unable to come down to our terms. We did apply for a modification this time last year but were denied, saying we made too much money. Ironically, we were applying for a mod with our 1st at the same time and were approved. While speaking with a Wells representative in late March 2009, he cryptically told me that "I can't say much more, but it looks like we are going to charge-off this loan if the arrears is not current by [enter date nearly 2 weeks in future]. This SOUNDS like a bad thing, but is actually GOOD for you."

 

To my best recollection, we have never received anything in writing saying that the loan was charged-off so I am not sure that actually occurred. It appears as though it could have because we received a letter in late October from an attorney in WV.

 

My husband and I spoke to an attorney last Monday and his reaction was for us to do nothing in response to the attorney's letter. He advised this because he said that we should not draw attention to our loan, and that we are 'small fish' right now to Wells.

 

I still feel lost and scared, though. I've searched and searched the boards and have not found anyone that has posted regarding getting past this point with a HELOC/2nd mortgage. Sitting still doesn't feel 100% correct but yet the attorney's words do make sense. I have read Doc's information and just can't figure out if any of it truly apples to us?

 

Any input appreciated. Links are fine. Something that may put me on the right path. We do NOT want to lose our home.

 

This is very, very likely a stupid question, but would a DV letter be appropriate? ie:

 

"To Whom It May Concern:

 

This letter is being sent to you in response to your attached letter. This is not a refusal to pay, but a notice that your claim is disputed.

 

Under the Fair Debt Collections Practices Act (FDCPA), I have the right to request validation of the debt you say I owe you. I am requesting proof that I am indeed the party you are asking to pay this debt, and there is some contractual obligation which is binding on me to pay this debt.

 

Please attach copies of:

• Agreement with your client that grants you the authority to collect on this alleged debt or proof of acquisition by purchase or assignment.

• Agreement that bears the signature of the alleged debtor wherein he or she agreed to pay the creditor

 

Please also be advised that this letter is not only a formal dispute, but a request that you cease and desist any and all collection activities, including reporting of; or verifying of this account on my credit reports.

 

Your receipt of this letter will be considered as having granted consent to the taping of any and all telephone calls to me at my home or business by you or your agents or assigns.

 

I require compliance with the terms and conditions of this letter within 30 days or a complete withdrawal, in writing, of any claim.

 

In the event of noncompliance, I reserve the right to file charges and/or complaints with appropriate County, State & Federal authorities, as well as the BBB and State Bar associations for violations of the FDCPA, FCRA, and Federal and State statutes on fraudulent extortion and illegal collection activities on any account subject to the HIPAA and West Virginia medical privacy rules.

 

I also hereby reserve my right to take private civil action against you to recover damages."

 

This all feels like so much more than I can bear!

[US Loan Modifier]

Hi gwenny

 

Here's my take on your situation:

 

Wells Fargo can do a "write-off" on their books, however it is just a paper loss, not a re-convey of your loan. What that means, is there still would be a 2nd mortgage on your home.

 

They could also do a "write-off" and sell the note perhaps to that mystery attorney that sent the letter.

 

No news is not good news in my opinion. What is happening is, nothing is being paid on the 2nd lien and it may come back to haunt you big time. If you don't have much equity in the home they could sit back for years and start foreclosure when they can make more money. When it make sense financially for them.

 

If you try and sell or refinance your home now or in the future you will have to pay that mortgage off. Believe me it didn't go away, you didn't just get $90,000 in free money, they will collect in the future with penalties and interest. I'm sure that's not what you wanted to here.

 

I don't know if you tried this already, and perhaps it would have been a good time when they denied your request for a loan mod but, did you ask them for a buyout? Many lenders will settle for pennies on the dollar and for the amount you owe I'd expect to a good request from you would be around $8,000 - $9,000. If they agree to a buyout they would re-convey their note and no longer would you have a 2nd lien. Legally!

 

I hope I answered your questions, good luck