Second Foreclosure

My question involves a foreclosure in the State of: Michigan

I’m hoping someone can give me some advice on my problem.

My predicament is that we (wife) had both a first mortgage 5 year balloon ($117K) and second balloon ($49K) due approximately 4 months ago. Our intentions were to refinance both as a first. When we tried that we found out our house was not worth what is was a few years ago and our first mortgage company refused the refinance because the LV was 97% and went ahead and did a mortgage mod which turned out pretty well.

Our second mortgage holder has not been near as easy to deal with. We missed the initial payoff date as we were waiting for the refi to come through and it didn't happen. We have since tried to refinance the 2nd through them with negative results as they would only do %80 LTV. When I inquired about a loan mod they said it could no longer be done as we missed the date. When I asked about a possible payment plan they said "Loss Mitigation" wouldn't talk to me until we were 4 months overdue (which we are now). We have made payments during this time. I contacted loss prevention and they said they would send out docs for possible loan modification. I received another call yesterday from their credit counseling dept. again asking for payment. When I explained LP was sending out docs I was told it was being done by mistake and my loan is now under “foreclosure review” (whatever that means).

I made a call back to LM and was told that yes the papers were sent out by mistake and they couldn’t help. I was then turned over to “Loss Recovery” and was told my loan was 1 week from being charged off and they would work with me on a payment plan at that time. Great, now I’ll have a charge off on my credit record. Why won’t they just do a loan mod as long as we’re capable of making the payments?

Up until this started 4 months ago our credit was in the 750 range. I have been at the same job for 31 years and my wife for 17 years. I'm having a hard time understanding what they have to gain by all this.

I spoke with someone this afternoon in Loss Mit. and they said it hadn't reached their dept. and wouldn't until next week and then bounced me back to credit counseling to speak with a supervisor which of course couldn't be reached. It wouldn't have mattered as I've talked to them before and it didn't do any good they just bounce me to another dept. I can't believe there isn't someone I can talk to that can help with this.


If anyone can offer any suggestions it will be greatly appreciated.

Thanks,
Eric

Other than calling and calling and calling until you chance across somebody reasonable?

I've heard countless "second mortgage" horror stories lately, often in the context of short sales, where they impede the sale to try to squeeze more money out of (in effect) the primary lender. In my opinion, a lot of second mortgage lenders are being neither reasonable nor realistic - I suspect it's because they have lots of failed and failing mortgages, and not a whole lot of new healthy mortgages being opened.

As an "educated guess", I expect that "foreclosure review" involved them looking at the amount you owe on your property and the balance of the primary mortgage, to see if they could recover money if they foreclosed. I expect that they are now talking about a write-off because they have realized that the most or all of the proceeds of a foreclosure would go to the primary lender - leaving them absorbing the loss of trying to resell the property in this market.