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jasummers76

Interest on HELOC not reaffirmed in BK 7

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I will try and make this as short as possible. I live in Illinois, bought my home in Jan 2005, and took out a HELOC in April of 2005 with E-Trade. Defaulted on HELOC in late 2008 with E-Trade Filed BK 7 in December 2009 and Discharge in March 2010 the E-Trade loan was never reaffirmed during BK. The loan was sold to Specialized Loan Servicing (SLS) in January 2014 without me knowing or getting notification from either party. Neither showed up on my credit report.  I new the BK protected me from being sued for any balance left if I sold my home at a loss were the junior lien holder (E-Trade / SLS)  was not paid in full but the lien was still attached to the property and they could foreclose.  Recently applied for a HARP loan and that is when SLS showed up on the title search, they refused to subordinate and sent a payoff letter for the 41k principal and had an additional 12k in interest that they charged not E-Trade which we hadn't made a payment to since late 2008 the interest was from January 2014 when they purchased the account from my math. Is this 12k interest legal without at least letting me know somehow they even owned it? I got my first letter from them a few weeks after the harp loan was dead in the water. I hired an attorney but since they have only sent one letter giving me like 4 options to cure the situation it isn't a pressing matter for my attorney who I have only been dealing with for about a week. They are still in the process of collecting my documents and trying to get a modification hopefully on just the principle. I just want to know if I am on the hook for the extra 12k which is growing by $7.89 daily.   

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What did the original contract say about interest? 

 

My guess is that it had language permitting them to unilaterally sell the contract.  There is no reason for the interest clock to have stopped save for a brief period while the BK stay (if any) was in place.   My other guess is that it is time to don the Monty Hall hat and play Lets Make a Deal.

 

Something else to look at, however, is that if you are having to pursue HARP so soon after getting out from a BK, then perhaps it is time to let the house go and find something more affordable. 

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The BK was due too medical bills. Harp was just too get a better interest rate and lower payments.

 

I just don't understand the reason why E-Trade didn't start the interest themselves after the stay which isn't more than a year. They would have increased the amount of the loan. Even if planning on selling they would have gotten more for the loan from SLS when purchased in 2014. E-TRADE would have been able too generate at least 10k in interest themselves and say SLS purchased it at 30 cents on the dollar that would be 3k.

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Also the payoff letter stated that SLS was a debt collector. Can they even charge interest? Also wouldn't monthly statements or notice that they're now the owner of the account be required? I mean I could easily make the payment now, just have the lawyer fighting the 12k in interest. I would have even been a little understanding if it showed up on any credit report giving me a chance at noticing

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