mckenzie4d

Advice on Settling 2nd Mortgage Lien Serviced by SLS

4 posts in this topic

 We filed Chapter 7 in 2008,  and later Select Loan Servicing began servicing 2nd mortgage, for which there was no Reaffirmation Agreement.   We stopped paying in 2011 and they posted a balloon payment due in 2021.  Recently we contacted SLS and found out they've added $40k unpaid interest to what they said we owe on a 2nd mortgage.    The 'gap' according to our attorney  is that the 2nd mortgagee cannot come after us personally, they can only come after the property, and the first mortgage has first position there.

What negotiating tool do we have for pressuring 2nd to reduce the balance due to something manageable?  We can wrap the 2nd mortgage into a re-fi and at $39k or less, it's worth it to do that.  But at $79k in loan and interest, its not worth it.  And yes, we want to stay in the home.

Again, any ideas or advice on how to negotiate with SLS for 2nd mortgage lien?

Thanks 

 

 

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Is the attorney a BK attorney? I'd run it by him/her. I'd guess that someone that lives in the trenches of this stuff would probably have a pretty good feel for how a negotiation would go. 

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On 8/24/2018 at 9:11 AM, mckenzie4d said:

The 'gap' according to our attorney  is that the 2nd mortgagee cannot come after us personally, they can only come after the property, and the first mortgage has first position there.

Hi Harry, thanks for the suggestion.  Our attorney is a BK attorney and he's the one who pointed out the small gap, and nice guy that he is, he's saying that's our only angle....and that at least we had a break from paying it up to this point.  He's such a nice guy,  and that's his nice guy perspective. 

I was hoping to get some grittier guidance from someone in the trenches on the side of the consumer.   We refied to have funds to invest in real estate and when the bottom fell out of the market, we lost everything and filed BK.  And not paying the second helped us get back on our feet when our income was cut during the recession.  I read a post from 2016 about SLS's unfair debt collection practices and was hoping there was/is a shark-like strategy for dealing with them.  Quite sure they benefited from the bailout and now, honestly, we want to get out from under this with as little out of pocket as possible.

Again, thanks

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It's a tricky situation, in that there is no legal action pending.  Have they done something that you think is illegal or unethical?  You can dispute the amounts they are claiming, but if they provide an accounting that jives, the only other thing you can do is sue them. You're not in any position of negotiating power. They know the house will eventually go on the market and, because real estate historically increases in value, they'll just sit back and let the interest accrue knowing they'll get paid, at least a large part of what's owed, when the house sells. 

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