Posted on: 07th Sep, 2011 06:35 am
My home has an FTD for $50k and a Bank LOC (2TD) for $300k.
I just filed Chapter 7 due to business failure.
The home is worth around $250.
I just retired and have very low income.
I can get a family loan to pay off the 2TD if is significantly reduced.
I am trying to save my home and can pay the FTD.
How should I approach the 2TD bank for a payoff settlement and
what should I expect for an amount?
avatcns las Vegas
I just filed Chapter 7 due to business failure.
The home is worth around $250.
I just retired and have very low income.
I can get a family loan to pay off the 2TD if is significantly reduced.
I am trying to save my home and can pay the FTD.
How should I approach the 2TD bank for a payoff settlement and
what should I expect for an amount?
avatcns las Vegas
Hello Avatcns,
You would first want to know the laws regarding the recourse from the lender is there is a deficiency judgement allowed in your state. Most Trust Deeds do not allow for deficiency, only the collateral, but if you refinanced and cashed out equity, then some states can come after you for the deficiency. As for the 2nd, you would want to get a BPO or appraisal on the home, gather all your documentation regarding hardship, and income, and then request a settlement. Send in a QWR a qualified written request, stating your goal and what you would want. Send certified and wait for the 21 days the lender has to respond. If you can show that the bank will net nothing at foreclosure, they might be willing to take a 40 cents on the dollar settlement. It never hurts until you ask. If the 2nd will not work with you, speak to a BK attorney and see if you have any protection under BK...Then you can look into renting the home, until the market turns in several years. You can do a deed in lieu and rent a home, or a short sale...There are options, you just need to know what is available and what will work best...Think of it like this, if you cant get reolved with 2nd, you can opt for the short sale, stop making payments while on market, save every penny, then once the home sells, you may get relocation fee from bank, and take all the saved money and get an apt and use money to supplement your income...Good luck
You would first want to know the laws regarding the recourse from the lender is there is a deficiency judgement allowed in your state. Most Trust Deeds do not allow for deficiency, only the collateral, but if you refinanced and cashed out equity, then some states can come after you for the deficiency. As for the 2nd, you would want to get a BPO or appraisal on the home, gather all your documentation regarding hardship, and income, and then request a settlement. Send in a QWR a qualified written request, stating your goal and what you would want. Send certified and wait for the 21 days the lender has to respond. If you can show that the bank will net nothing at foreclosure, they might be willing to take a 40 cents on the dollar settlement. It never hurts until you ask. If the 2nd will not work with you, speak to a BK attorney and see if you have any protection under BK...Then you can look into renting the home, until the market turns in several years. You can do a deed in lieu and rent a home, or a short sale...There are options, you just need to know what is available and what will work best...Think of it like this, if you cant get reolved with 2nd, you can opt for the short sale, stop making payments while on market, save every penny, then once the home sells, you may get relocation fee from bank, and take all the saved money and get an apt and use money to supplement your income...Good luck
Met with my BK Atty today, he said to wait until 2 mo. late on 2TD then make offer to settle. It seems that the (2TD)bank would have to clear the FTD (another bank)first so they would be in the first position to pursue forclosing on me, so I think I would have some leverage to negotiate a reduced settlement amount.
Thanks for your response Chris. Any othe advice out there?
Thanks for your response Chris. Any othe advice out there?
Hi avatcns,
I think you should go with the advice that your bankruptcy attorney has given you. You should wait for at least 2 months and then offer them a settlement. There are chances that the bank will agree to it.
I think you should go with the advice that your bankruptcy attorney has given you. You should wait for at least 2 months and then offer them a settlement. There are chances that the bank will agree to it.
Advice is appreciated. I realize it does not make sense for me to stay in a house that I am over $100k upside down and paying two mortgages, as I can rent a lot cheaper. Would like to keep house, so the only way would be a negotiated payoff at least at or below market value and cost of sales.
Any more ideas or experience with this out there?
Any more ideas or experience with this out there?
Hi avatcns!
Welcome to forums!
If you get a rented lot for cheaper rates, then it will be a good option to go for it. You will have to contact the lender and set up a negotiated payoff with them. It will be the discretion of the lender whether or not they will consider your request.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
If you get a rented lot for cheaper rates, then it will be a good option to go for it. You will have to contact the lender and set up a negotiated payoff with them. It will be the discretion of the lender whether or not they will consider your request.
Feel free to ask if you've further queries.
Sussane