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90% settlement offer - Legit?


fiasko527
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I currently have two mortages on my house, one of those 80-20 loans. I had some financial trouble in the past, however fixed all of those problems and am back soundly on my feet. I was behind on my first loan (primary) and got a loan modification, and am all caught up and even ahead now on that loan..

On my second loan, valued at about 21,000, I fell behind and had not made payments for quite a while. I called yesterday to make arrangements to pay the past due balance and catch up, and they offered me a staggering 90% settlement, where I would only pay 2100 of the balance and the debt would be settled.

I have verified that they own the debt. It is with FASLO. Once they told me the settlement they asked me to fax in settlement letter, which I did.. It stated:

After a second conversation with XXX on 04/13/2009, I am offering a settlement amount of $2100.00 which will be paid to your company, Faslo, by May 31st 2009. With this payment, the account will be settled, any and all collections activities will be ceased permanently, the account will be closed, the remaining debt forgiven, and the account will be “settled” with the appropriate notifications to the credit reporting agencies.

I am awaiting a written response from them with their reply, however according to the supervisor, it should get approved.

Is there anything I should watch out for on this, any advice anybody has when dealing with this, specifically for any specific wording when I receive their reply, etc? Thanks in advance!

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Be careful with this company, they are a CA that collects on defaulted subordinate loans. This is a screen shot from their website:

First American Subordinate Lien Outsourcing (FASLO) provides servicing solutions for delinquent and defaulted subordinate liens. Liens include HELOCs, conventional seconds and subprime seconds. Utilizing the nation’s largest real estate and consumer databases, FASLO applies advanced analytics with proprietary technology to create a superior solution to the complex world of subordinate liens.

Using data, analytics and technology, FASLO is able to provide a robust menu of services to supplement each of its lender/Wall Street clients, but also is able to offer a complete outsourcing solution as well. One of the key ways in which FASLO differentiates itself from the rest of the industry is that not only do we offer services and data, but actually use those services and data to manage loans for our clients. By being our own customer, we have refined our products to specifically meet our client’s needs.

48-72 hour timeline

The FASLO solution combines three major components: Data, Analytics and Technology. This unmatched solution drastically cuts the timeline for default analysis to actionable options from the traditional 30-45 days to 48-72 hours.

The benefits of this accelerated turn time include increased ROI, minimized risk exposure and optimized portfolio performance.

Check it out here: http://www.firstam.com/product.cfm?id=7578

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Denita,

Yeah that's the company, and they purchased my defaulted subprime second loan. I had been receiving settlement offers, and actually received one the day after I called.. presumabley sent out before I made contact.

That settlement offer was for 4100 on a 21k debt, roughly 20% of the balance. I've asked over and over again with them and made sure to stress that if settled, the remaining amount will be forgiven, the mortgage released, any and all collection activities will be suspended permantley, and the account will be closed. They have advised me they will send this to me in writing prior to any settlement agreement. I am awaiting that settlement letter prior to agreeing to anything. All of this was sent in my original settlement offer letter to them, which you can read in the first post.

Are there any other questions or statements that I need to add to protect myself in case they do send me this settlement offer, which it looks like they are going to do. I am specifically looking for anything else that they could use against me. I saw an example on here where a lady settled with a CA on a Macy's account, however the CA sold the remaining debt to another CA. I am looking to protect myself for that situation specifically, along with any other similiar situations. Thanks a bunch, I will def. keep everyone posted.

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One of the most important parts about settling a subordinate mortgage is getting the lien off the asset.

It will not do you any good to work out a settlement agreement if the lien is still on the house. Part of the agreement needs to have the lien released from the asset. You would get a lien release or a mortgage satisfaction from the lien holder and make sure it is recorded in your county. Otherwise you will not be able to sell the house later without going through the negotiations again.

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One of the most important parts about settling a subordinate mortgage is getting the lien off the asset.

It will not do you any good to work out a settlement agreement if the lien is still on the house. Part of the agreement needs to have the lien released from the asset. You would get a lien release or a mortgage satisfaction from the lien holder and make sure it is recorded in your county. Otherwise you will not be able to sell the house later without going through the negotiations again.

Exactly my thought. Some companies deal with the loan and the lein as two seperate entities. They will settle the loan for pennies on the dollar, but will not release the lein without you paying a very large amount.

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One of the most important parts about settling a subordinate mortgage is getting the lien off the asset.

It will not do you any good to work out a settlement agreement if the lien is still on the house. Part of the agreement needs to have the lien released from the asset. You would get a lien release or a mortgage satisfaction from the lien holder and make sure it is recorded in your county. Otherwise you will not be able to sell the house later without going through the negotiations again.

Thank you. This is exactly what type of knowledge and insight I was looking for. On my settlement letter to them, I should state specifically something to the effect of:

Upon agreement of settlement of this loan, Faslo agrees satisfy the mortage, release any liens on the property releated to this mortgage, and report the lein release and mortage satisfaction to the county of XXXXX.

Would that be satisfactory to ensure everything is released?

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No, the company would send you a signed, original mortgage satisfaction or lien release and you would take it to the county recorders office and record the lien release. This protects you in the future when you go to sell you have proof that the debt was paid in full and because it is an actual mortgage that mortgage is recorded as a lien on your house now for X and does not get removed without either a Mortgage Satisfaction or a Release of Lien.

This is a little better explanation (this is a partial, the link includes the full explanation):

When a mortgage is paid off, the mortgagee (secured creditor in URMSA) generally owes the landowner two things. First, a document called a payoff statement that provides the landowner proof that the mortgage amount has been paid off. Second, the secured creditor is also obligated to record a statement that establishes the mortgage is satisfied in the land records. The statement makes it clear to subsequent purchasers and their secured creditors that the title is clear of the mortgage obligation. In this era of remote secured creditors, the timely transmittal of payoff statements and recording of mortgage satisfactions has become more problematic. There is a cost to the landowner, particularly if the landowner has paid off the mortgage in order to sell the real estate to another person. If his or her secured creditor is tardy in providing payoff statements or recording mortgage satisfactions, the sale cannot go forward.

http://www.nccusl.org/nccusl/uniformact_summaries/uniformacts-s-urmsa.asp

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Thanks Denita, I appreciate it. I revised my settlement offer with them to include that I needed the required lien release and mortgage satisfaction documents. I also put in a line that they agree to not sell the remaining unpaid portion of the debt to a 3rd party collection agency. I'll keep everyone updated.

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  • 2 months later...
  • 2 months later...

Just to keep everyone updated, I was ready to make a settlement payment, and at the last minute, they said, oh by the way, our 'investor' did not accept the settlement offer. I laughed at them and hung up on them. Im no longer in a position to negotiate a settlement offer with them. They call alot, but its always a recording to contact them when I get a chance.

I'll probably call them in a month or so and see if they've changed their mind on being honest in their conversations with me. I would give this advice though with faslo..

GET IT IN WRITING BEFORE YOU DO ANYTHING.

Also, on an unrelated note, Im finishing a settlement with BOA on a credit card.. 1400 on a 4800 balance!

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  • 1 month later...
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