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Old 02-11-2014, 12:49 PM
 
1 posts, read 26,508 times
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my situation..i have 1st mortgage & 2nd morgage on house..i filed bankruptcy and did not re-afirm either..after bankruptcy discharged i did the making homes affordable and modded the 1st mortgage and have been paying...2nd mortgage i have done nothing..no pay /no mod...i have been expecting 2nd mortgage to forclose when house prices raise.. so i checked court records and about 2 months ago 2nd mortgagee did a satisfaction of mortgage and released lien...exact words**(this satisfaction is soley for the purpose of releasing the real property described above from the lien created by the mortgage and is not a release of the obligation under the note as said obligation has not been fully paid)** ....what exactly does this mean? do i not have to ever worry about foreclosure?
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Old 02-11-2014, 05:53 PM
 
Location: New York
2,251 posts, read 4,160,232 times
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.

The bankruptcy eliminated your legal liability to pay on the mortgages. Your home will remain under the original loan agreement as you resume making payments. You’re going to continue making payments on your first mortgage until you pay off the loan.

Your 2nd mortgage which was in second lien holder’s position, the reason why they didnt pursue the foreclosure was possible due to no equity, or the legal expenses of trying to collect wasn't worth the effort.

What happens a lot "behind the lines" concerning foreclosures, as deal is sometimes made between the first and second lien holder. Since the first wants a free and clear title so they have full control. They pay off the second to release the lien. The second lien holder freeing up the title and cancelling to debt, you should have received a 1099C "debt calculation" form to file with your taxes as income.

The bad news is that your credit report will be pretty much tanked for the next ten years. Your report will note that the first mortgage was discharged in bankruptcy and even though you are making payments, your report will not reflect your newly established good payment history. On the second it will show up on your credit report as a non-updated foreclosure. In the future when you try to requalify for new financing, it will be next to impossible to have removed off your report.

You might think you are actually rebuilding your credit score back up by paying your mortgage on time and paying period but you may not be gaining anything at all. When it comes to some people, they do not know this and years later when they want to take out a larger loan, they wonder why their credit score is still so low. They may even get denied for the loan because of the low credit score or lack of mortgage history. After you file bankruptcy, you will have to make a choice to reaffirm your mortgage or not to reaffirm.

Some homeowners will elect not to do this because they plan to walk away from their homes and do not want the personal liability hanging over their heads. At any time you can walk away from the property.

While others who want to stay in their homes with the benefits of good credit will most likely decide to reaffirm their mortgage. My suggestion if in the next ten years, you have children, plan to continue living in the home, or want to have a more successful future.

My suggestion to you or a third party - contact the second lien holder, call them to offer a settlement. In my experience have seen settlements as low as 10 cents on the dollar. Request a debt satisfaction letter with the statement appearing "Settle As Agreed". So you can forward to the credit bureaus to show as the amount settled. This is a step you are going to need to take if you decide to work on your repairing your credit. You are going to have to take many steps to turn your live around, small steps first, bigger steps later.

Good Luck
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Old 08-28-2014, 08:48 PM
 
1 posts, read 25,498 times
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Default Illogical double standard?

(I had replied before, but it did not seem to post - if it does later, forgive any duplication)

Why is there an illogical double standard when it comes to reporting to the credit bureaus after BK?

When the BK is final, the loan is settled, with me, the bankrupt person owing nothing.
That is, I assume, the reason that, if the debt is not reaffirmed, it does not end up on the credit report.

So, if I buy out the LEIN (not the loan, because the debt does not exist any more, so I cannot buy it out without reaffirming it) why is that reported to the credit bureau?

How can I settle an already settled loan?
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Old 09-04-2014, 10:51 AM
 
Location: New York
2,251 posts, read 4,160,232 times
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Quote:
Originally Posted by RWDC View Post
(I had replied before, but it did not seem to post - if it does later, forgive any duplication)

Why is there an illogical double standard when it comes to reporting to the credit bureaus after BK?

When the BK is final, the loan is settled, with me, the bankrupt person owing nothing.
That is, I assume, the reason that, if the debt is not reaffirmed, it does not end up on the credit report.

So, if I buy out the LEIN (not the loan, because the debt does not exist any more, so I cannot buy it out without reaffirming it) why is that reported to the credit bureau?

How can I settle an already settled loan?
Fling chapter 7 Bankruptcy and now trying the clear up your credit report, the illogical double standard is compared to "clearing a mind field"....

Chances are - the debt or lien was already on the credit report before the bankruptcy. Your report has old information and needs to be updated. The responsibility of cleaning your credit report falls on you.

If you settled on liens, to need to dispute and send a lien satisfaction letters to the credit bureaus...
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Old 09-04-2014, 11:08 AM
 
3,317 posts, read 7,251,326 times
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I had a similar situation with a client, and even consulted with ModSpec. In the end, things did not go well for the borrower.

Borrower re-affirmed first mortgage, did nothing with the second mortgage. No negative reporting on her credit from new 2nd lien holder. We finally contacted them and had to have the 2nd lien "graded," and came up with a ton of Mortgage lates: basically none made in 3 years.

The company holding the lien did not re-classify it as an Installment Debt, it remained a mortgage. Even though they never foreclosed or reported to credit bureaus, we got killed when we had to have the thing rated. Lost her deposit, inspection, appraisal fees.
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Old 12-10-2014, 03:52 PM
 
4 posts, read 50,143 times
Reputation: 13
Default 2nd lien not released after it was transferred/sold?

Quote:
Originally Posted by Pfhtex View Post
I had a similar situation with a client, and even consulted with ModSpec. In the end, things did not go well for the borrower.

Borrower re-affirmed first mortgage, did nothing with the second mortgage. No negative reporting on her credit from new 2nd lien holder. We finally contacted them and had to have the 2nd lien "graded," and came up with a ton of Mortgage lates: basically none made in 3 years.

The company holding the lien did not re-classify it as an Installment Debt, it remained a mortgage. Even though they never foreclosed or reported to credit bureaus, we got killed when we had to have the thing rated. Lost her deposit, inspection, appraisal fees.
Pfhtex or anyone else- You might be able to help me here. I'm selling my house and missed the close date because of a 2nd mortgage lien. I re-modified my first mortgage in 2009 but not the 2nd mortgage, which was $31000. Never heard a thing from Homeq the lienholder on that one. I kept paying my 1st mortgage after the re-modification. I'm now selling the house and 2 days before closing the title company came back and said there's an unreleased lien on the 2nd mortgage. Homeq is out of business and Ocwen was the original lienholder who transferred 2nd mortgage to Homeq back when I bought my house. I was very close to foreclosure back in 2009 and luckily re-modified with Bank of America. I definitely just barely saved the house from foreclosure. Bank of America didn't re-modify the 2nd mortgage(Homeq) and I never heard anything from them again.

My Dilemma:

Homeq is now out of business and was servicing the 2nd mortgage in 2009 and there's still a lien on the 2nd mortgage. Ocwen supposedly bought them out in 2010. Ocwen has no record of buying back the loan. I can't close on selling my house now until I find out which company will give me a payoff to get the lien released. I'm at a dead end. Did Homeq write it off before they went out of business thinking I foreclosed on the 1st mortgage and if so, how do I figure it out when Homeq is out of business? Surely I'm not the only person in the USA that this has happened to. Please advise, I'd appreciate it. I'M TRYING TO CLOSE ON MY HOUSE SELL QUICKLY.
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Old 12-12-2014, 02:17 PM
 
Location: Phoenix AZ
5,920 posts, read 10,437,079 times
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Quote:
Originally Posted by dlelandr View Post
Pfhtex or anyone else- You might be able to help me here. I'm selling my house and missed the close date because of a 2nd mortgage lien. I re-modified my first mortgage in 2009 but not the 2nd mortgage, which was $31000. Never heard a thing from Homeq the lienholder on that one. I kept paying my 1st mortgage after the re-modification. I'm now selling the house and 2 days before closing the title company came back and said there's an unreleased lien on the 2nd mortgage. Homeq is out of business and Ocwen was the original lienholder who transferred 2nd mortgage to Homeq back when I bought my house. I was very close to foreclosure back in 2009 and luckily re-modified with Bank of America. I definitely just barely saved the house from foreclosure. Bank of America didn't re-modify the 2nd mortgage(Homeq) and I never heard anything from them again.

My Dilemma:

Homeq is now out of business and was servicing the 2nd mortgage in 2009 and there's still a lien on the 2nd mortgage. Ocwen supposedly bought them out in 2010. Ocwen has no record of buying back the loan. I can't close on selling my house now until I find out which company will give me a payoff to get the lien released. I'm at a dead end. Did Homeq write it off before they went out of business thinking I foreclosed on the 1st mortgage and if so, how do I figure it out when Homeq is out of business? Surely I'm not the only person in the USA that this has happened to. Please advise, I'd appreciate it. I'M TRYING TO CLOSE ON MY HOUSE SELL QUICKLY.
You might want to discuss your situation with an attorney. In some states, you can file a "quiet title action" - creditors that don't come forward after that is filed are barred from collecting on those debts. Not quick (usually a 6-9 month time period & you have to advertise that you're quieting title).. but it can work.
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Old 12-12-2014, 08:21 PM
 
Location: MID ATLANTIC
7,598 posts, read 17,614,249 times
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Find out the Statute of limitation. Let's say it is 5 years - they can wait until 4 years, 11 months and file a judgment against you. By then, the homeowner forgiveness act will be long gone and you will pay taxes on any bad debt. Or you can try to buy, actually get the loan , only to later find the old debt is also been attached to the new house.

What I am trying to get across - it's a time bomb ready to blow. Go settle it to pennies on the dollar.
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Old 12-15-2014, 01:01 PM
 
Location: New York
2,251 posts, read 4,160,232 times
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I'm at a dead end.

Seeing a small amount of posts in this forum, plus seeing your same (copied-n-pasted) post in other forums. Normally I don't go off on people situations having financial hardships. Telling it straight, your situation is a result of lack of responsibility and not being organized. Now your looking for a quick fix, it is going to take a lot of time to clean up this financial mess. I have worked of this type of situations before, my fee is a few thousand to help you correct, or you can do this on your own.

Trying to sell your home quickly is an understatement. You are going to be required to get debt validation letters to settle, or satisfaction letters that the debt no longer exists. Then you are going to go back to the title company to show the property can be free and clear from any past Lis-Pendens.

Re-modified the first mortgage in 2009 with BOA.
  • The first time a loan is modified is call a modification, the 2nd time a loan is modified is called a fresh start.
Bank of America didn't re-modify the 2nd mortgage
  • Your 2nd is a separate loan from the 1st mortgage. You are responsible to modify it not Bank of America. In the loan modification package, there was probably a subordination letter you were required to sign. Similar to refinancing a 1st mortgage when there is a 2nd mortgage. Because of changing the loan terms, many large lenders now ask for subordination letter. This is one item to investigate is look at your old modification paper work.
Homeq is out of business
  • Because Homeq was a loan servicer that went out of business, they transferred (sold) the debt to another servicer (or debt collector).
Right now the first priority is validating the debt. How did the title company find out about the 2nd mortgage? Was it recorded at your local court house, or was it listed on your credit report?

Most likely on your credit report, the first thing is getting a copy of your tri-merge. Writing a letters to all three bureau’s disputing the debt is no longer valid (and request them to update your report). Depending on the day of the month you do the dispute, it can be two weeks, or up to a month to get any action.

How do you know Ocwen re-inherited the debt?

When Homeq closed their servicing was split between four different servicers. You mentioned Ocwen doesn't own your old debt. Next is contacting the all the new servicers that inherited Homeq debt. Requesting letters from them you do not owe them anything. Don’t call them by phone asking, you are going to have to formally request in writing.
  • Quantum Servicing Corporation
  • Ocwen Loan Servicing
  • State Bridge Servicing Corporation
  • Wells Fargo
Another item to investigate is having the title company validate the debt separately. Investigating if or who initiated the Lis-Pendens, and/or still holds open liens against the property.

In this case due to liens secured on a property, the Statute of Limitations are not applicable. Not unless the 2nd lien remove themselves from the title, for example to sue in civil court for a court ordered judgment or wage garnishment. Then the statute of limitations comes into play if/when the debt transfers from secured to unsecured. Additionally a quiet title, have talked with more people who were scammed out of money. It’s almost always a complete waste of time, it creates false sense of hope and expectations for homeowners.

*** Another important consideration to find out / be aware of...

When bank of America did/redid your modification(s) of the mortgage. I am seeing many lenders to make the payments more affordable, reduce the balance by reducing the principle. Adding the principle reduction amount, included with the arrears placed at the back end of the loan. The balance showing on the monthly mortgage statements most likely doe not include the total pay off balance....


...

Last edited by Modification Specialist; 12-15-2014 at 02:18 PM..
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Old 12-29-2014, 04:56 PM
 
4 posts, read 50,143 times
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All above is correct in your first two paragraphs and an understatement indeed is what I've found out, based on my previous post thinking. Not a quick fix, I've lost the buyer for my house and have now hired a real estate lawyer. Good info you have provided and it is appreciated.
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