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  1. #1
    Join Date
    Feb 2010
    Posts
    2

    Unhappy HELOC After Short Sale

    My question involves real estate located in the State of: Colorado. We purchased a home in Glenwood Springs in August of 2007 and closed a couple weeks after the mortgage market crashed. We called Wells Fargo a couple of times after the crash but were told to go ahead with our closing, that it would be a great investment. We were purchasing with an 80/20 and were really concerned about the value going down. We never saw an appraisal until I finally got a copy a couple of months ago while we were going through a short sale. Wells Fargo first agreed to the short sale and so did Wells Fargo HELOC as long as we agreed to work with their "recovery team" after the closing. We did get two months behind in the HELOC mortgage payment before it closed. Now for my questions.

    1. I contacted the "recovery team" the day after closing and they weren't ready for me and told me to call back. I did, five times. I finally got to talk to someone the other day who told me that we should just send a check to them each month for a certain amount. He told me that we would not receive anything in writing, no letter, no bills, and that I would not reference any account number on the check because we have no account with them any longer.

    2. We have received three letters in the last two weeks stating that effective the 12th of March they will be foreclosing on our HELOC. The short sale closed on the 21st of January and the HELOC received $5,000 in the short sale. This seems really odd to me that they are still wanting us to pay the missing mortgage payments. I had understood that would be taken care of with the $5,000. The "recovery team" specialist was also confused about us being listed as a foreclosure, but couldn't really give me any information or fix the problem. He also said it shouldn't be listed that way.

    I'm not comfortable making payments without any bill, receipt or even an account number. I've never even been informed by Wells Fargo HELOC exactly how much they show we still owe on our HELOC. I don't know what to do. Do we pay it blindly? Do we refuse? He also said something strange to me about listing something on the check like "payment on discharged account". I really don't understand and need some advice.

  2. #2
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: HELOC After Short Sale

    Did you enter into a written agreement in relation to the $5,000 given for the second mortgage in the short sale, or your obligations after the sale? If the short sale went through, such that the second mortgage lender agreed to waive its claim against the property, what are they presently threatening to foreclose?

  3. #3
    Join Date
    Feb 2010
    Posts
    2

    Default Re: HELOC After Short Sale

    It's really strange all the way around. We were required to sign a letter at closing time that said we would work with the recovery team after closing. No terms, no balance info, nothing. Their representative said the recovery team would work on a settlement with us. The recovery team won't work any settlement unless we can figure out how to come up with about $50,000 in one lump sum. Otherwise they want us to continue to pay every month for as long as it takes to pay it all off. They did release the property. I finally got in touch with Wells Fargo executive office and the gentleman I talked to there said that in the state of Colorado that letter regarding "right to cure" before foreclosure is automatically generated when the property is released as they no longer have any collateral against the loan. However, he could not explain to me why they were asking for back mortgage payments and just basically said ignore the letter and go through with arrangements to make a payment each month. He also told me that they would not be sending me any statements, receipts, etc.

    I also checked our credit report and found that the HELOC had listed us as "Account charged off. $67,896 written off." Someone in this deal told us it would be showing as a short sale, which would then drop off our credit record in about three years. The way Wells Fargo HELOC listed it, it will show on our credit for many years to come - even though they want us to make payments to pay that balance off.

  4. #4
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: HELOC After Short Sale

    They may become a lot more willing to settle if they think you're going to file for bankruptcy.

    A short sale will remain on your credit report for seven years.

  5. #5
    Join Date
    Apr 2010
    Posts
    1

    Default Re: HELOC After Short Sale

    TCROOT,

    I am will potentially be in the same situation that you are in. Wells is saying the same to us.

    How did it end up? Did they come after the full amount or sue you?

    How did you come up with how much you were going to pay each month?

    Thanks so much

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