Settlement on 2nd- Pay a lump sum negotiated by our office to the lender. The amount the lender agrees on can vary tremendously. We have seen a ranch of 10-50% offered. Typically the lender wants the full amount for the lower percentage, the higher percentage at times can be broke down in multiple payments. Basically the lender will accept less than the amount due and the lien will be removed complete from your property.
* Modification: We will negotiate the best possible modification; this typically ends up being a very low interest rate, at times -0- interest. We have also been able to get some principal reduced, but not a significant amount. You will have to regain the negotiated payments.
* Ignore the 2nd: A lender (1st, 2nd, 3rd, etc) recourse on a borrower not paying their mortgage payment is foreclosure. If the lien does not have any equity behind it then there is no reason for the 2nd lender to foreclose at this time. Most 2nds have no equity behind them and that is why lenders are not foreclosing at this time. Many properties are so far in the negative in regards to equity that the borrower may never see the property even break even in our life time. For this reason the debt appears to be uncollectable until values increase significantly which could take 7-20 years. One of the important things to keep in mind, this lien is not going away. When the lenders use the word "Charge offs" on the 2nds, this does not mean that the debt is be waived from your liability. It most likely means that the lender on their books has wrote it off as a lost but sold the collection rights to a third party. A third party will always be there attempting to collect the monies. If you were to try to sale the property or refinance the lien is there and they would want to get as much as possible to satisfy the debt, the is a situation that will not go away. The benefit by ignoring though is that you are not making payments and if your ultimate plan is to short sale the property down the road then it might benefit you greater by ignoring the 2nd.
* Bankruptcy (Chapter 7 & Chapter 13)- These are options that could benefit you tremendously under the right circumstances. Chapter 13 allows for lien stripping and Chapter 7 can dismiss the 2nd lien. There are specific requirements for this and would require a meeting with one our BK attorneys. If you would like a free consultation please contact the front desk 510.456.7400 and schedule a meeting. This is not an area in which I can assist you.
Important: You should seek advice from a CPA/Accountant on all the above scenarios. It is very important that you find out the tax implications in regards to your mortgage debt and decisions that you make. This area is outside our scope of expertise and we cannot give out this advice. http://savingcaliforniahomes.com/