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Heloc

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My bank offered mortgage mod at current payment as mortage mod. I am $100,000 underwater and an interest only loan. Mod would help me barely make it but I have an interest only HELOC due to having to drill a new well. Since my well dried up had no choice. Paying for the was only half of what I owe for the HELOC. Now I really can barely make the mod mortgage if I accept it. May do Chapter 7 insted. Citi Bank has my HELOC. How can I get Citi Bank to settle my $42,000 HELOC??? If I could just pay them $2,000 to settle I would possiblky be able to keep my house? Who do I call at Citi Bank? Help!




SOAPLADY


Debt Samaritan
Posts: 17191
Credits: 474465.88869987

Sub: #1 I would recommend speaking with a bankruptcy attorney.
Thu, 07/01/2010 - 07:45

I would recommend speaking with a bankruptcy attorney.




ball_mich
Debt Samaritan
Posts: 360
Credits: 5392.2

Sub: #2 Quote:Originally Posted by AnonymousMy bank offered mortgage mod
Fri, 07/02/2010 - 10:14

Quote:
Originally Posted byAnonymous
My bank offered mortgage mod at current payment as mortage mod. I am $100,000 underwater and an interest only loan. Mod would help me barely make it but I have an interest only HELOC due to having to drill a new well. Since my well dried up had no choice. Paying for the was only half of what I owe for the HELOC. Now I really can barely make the mod mortgage if I accept it. May do Chapter 7 insted. Citi Bank has my HELOC. How can I get Citi Bank to settle my $42,000 HELOC??? If I could just pay them $2,000 to settle I would possiblky be able to keep my house? Who do I call at Citi Bank? Help!


Well, it's more complicated that that. First, the laws differ depending upon what state you are in. But ideally you want to hope that your loan is non-recourse, which means that your lender cannot pursue a deficiency judgement (i.e. sue you for any unpaid amount after the foreclosure). That puts you in the best position of leverage because their only remedy is to foreclose the house (and if the home is underwater, there is no point in doing so). But HELOC lenders do settle with folks that they could pursue via deficiency judgement as well, and I am an example of that. But it could mean you won't get as low of a settlement as some other folks who have non-recourse loans, hard to say for sure. Second, are you behind on your HELOC payments? Unlikely that they are going to jump at a settlement unless you are delinquent with payments. And in my experience, they don't get serious about settling until after they charge-off the debt, typically at 180 days past due. Third, a settlement of $2k on $42k of debt is less than a 5% recovery for Citi. Never say never, but that's awfully low. It doesn't hurt to shoot for that, but realistically I think you probably need to plan for 15-20%, or something closer to $8k.

As to who to call at Citi, if you are delinquent in your payments, they will be calling you. Or they should be.




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