After chapter 7 bk options on 2nd mortgage?

[wj2005]

Here are the specifics....

 

$320k House value approximately according to tax department

$140k 1st mortgage balance current on payments

$105-110k 2nd mortgage that hasn't been paid since 2014

$26k property taxes currently due

 

The 2nd is with chase... had received an offer by mail to settle for about $9k over a year ago.

 

Now that chapter 7 bk is complete and discharged what is the best plan of attack to get this 2nd cleared for the lowest amount possible? I know some people have been lucky and the 2nd has just forgiven the whole amount but I don't think they will be this lucky... but I think based on how long it has been and that now they are in the position to just walk away if they wanted to and they wouldn't get anything at all that they can settle for a low amount. This 2nd was paid on for about 10 years as well and started at about $125k with a payment of $1150 a month.

[tiggerlgh]

Your equity position may cause them not to settle. You sell and they get all owed to release the lien. Most write offs were when owners had negative equity. They could even foreclose if they wanted to but I doubt they will.

[wj2005]

They wouldn't get the value I gave above more like 2/3 of it. So it is upside down for sure.

 

Once you add in the property taxes and the loan payoffs plus the cost to foreclose they wouldn't get much. Have only heard from them 2 times since 2014 as well.

[tiggerlgh]

Ok so what do you think the real value of your house is if you sold it today?

[Kuuner]

They wouldn't get the value I gave above more like 2/3 of it. So it is upside down for sure.

 

Once you add in the property taxes and the loan payoffs plus the cost to foreclose they wouldn't get much. Have only heard from them 2 times since 2014 as well.

I totally disagree. If the numbers are correct, the 2nd already charged their loan off and the borrower has already been discharged in BK so, the 2nd can simply put the borrower into foreclosure, foreclose, pay off a $140K mortgage and then sell a $320K house to recover their losses (Assuming they are the successful bidder...and they will be if their asset manager has even half a brain). They stand to make a significant recovery by foreclosing. Any halfway decent manager will do the same math I just did (I'm only halfway decent) and will decide to pursue foreclosure.

[wj2005]

Ok so what do you think the real value of your house is if you sold it today?

Roughly it would sell for about $225k. Which would a much less then what's due

[wj2005]

 

They wouldn't get the value I gave above more like 2/3 of it. So it is upside down for sure.

Once you add in the property taxes and the loan payoffs plus the cost to foreclose they wouldn't get much. Have only heard from them 2 times since 2014 as well.

 

I totally disagree. If the numbers are correct, the 2nd already charged their loan off and the borrower has already been discharged in BK so, the 2nd can simply put the borrower into foreclosure, foreclose, pay off a $140K mortgage and then sell a $320K house to recover their losses (Assuming they are the successful bidder...and they will be if their asset manager has even half a brain). They stand to make a significant recovery by foreclosing. Any halfway decent manager will do the same math I just did (I'm only halfway decent) and will decide to pursue foreclosure.

If that was the case why wouldn't they have done so years ago especially when the taxs were not behind like they are now?

[tiggerlgh]

$100k is a huge difference between tax values and actual. I would request them to lower your tax value if your other value is accurate.

[wj2005]

Also looking at values of house near by this one they have sold between $200-300k but at the same time these house are in better condition as well. My friends house needs a lot of landscape help (no curb appeal at all... weeds overgrown bushes etc) the house it's self is out dated and is in need of some repairs as well.

 

There are some that were in the low to mid 300k prices but these are also properties on a lake so the value of those are more.

[DollarDog]

I doubt your friend opened all their personal financial records up in front of you, so there's probably much more to this story than you're posting.

 

Tell your friend to create an account here so we're not playing a game of telephone with a third party.

[wj2005]

I doubt your friend opened all their personal financial records up in front of you, so there's probably much more to this story than you're posting.

 

Tell your friend to create an account here so we're not playing a game of telephone with a third party.

It is a friend of the family basically like family. I asked questions about everything and also can see the house with my own eyes... there is nothing more to the story unless you have a question about something that hasn't been talked about. At the same time what else would there be? If you think there is more that's your opinion... but your opinion is wrong.

 

They are older and don't use computers or I would have told them to setup an account them selves.

[Kuuner]

 

 

They wouldn't get the value I gave above more like 2/3 of it. So it is upside down for sure.

Once you add in the property taxes and the loan payoffs plus the cost to foreclose they wouldn't get much. Have only heard from them 2 times since 2014 as well.

I totally disagree. If the numbers are correct, the 2nd already charged their loan off and the borrower has already been discharged in BK so, the 2nd can simply put the borrower into foreclosure, foreclose, pay off a $140K mortgage and then sell a $320K house to recover their losses (Assuming they are the successful bidder...and they will be if their asset manager has even half a brain). They stand to make a significant recovery by foreclosing. Any halfway decent manager will do the same math I just did (I'm only halfway decent) and will decide to pursue foreclosure.

If that was the case why wouldn't they have done so years ago especially when the taxs were not behind like they are now?

 

Because the value to do so did not exist years ago. Time is the friend of the lender in these situations. Those old charged off loans come back around and lenders start knocking on doors saying, "Remember me!?..."

Charging off a loan means nothing to anyone except an accountant. The lien is still there. This is a huge issue that consumers don't seem to get. We charged the loan off but we retain the lien and just sit back and wait until values come back. Then...if the borrower doesn't cooperate, we foreclose. I can't tell you how many times I get a phone call from a borrower that we charged off their loan four years ago saying, "There must be a mistake, you charged my loan off four years ago and now I'm trying to refinance or sell and the escrow agent sent a demand in and you gave them a payoff amount for thousands"! That's when I say, "yes. That's correct. Will you be wiring the funds"?