Bank of America Home Equity Line of Credit (HELOC) Forgiven!!!

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The Law Offices of Michael Gaddis recently negotiated the forgiveness of a charged off 2nd lien held by Bank of America.  The homeowner, a resident of Valley, Center, CA, retained Michael Gaddis to negotiate a settlement and release of lien with Bank of America.  The 2nd lien had an outstanding principal balance of $56,277.03 and had only recently been charged off.  Bank of America is a VERY difficult servicer and negotiating settlements on 2nd liens can be nearly impossible at times.  However, Michael Gaddis knew that once the underlying debt had been charged off that that a window of opportunity had been opened.  Utilizing his close relationship with Bank of America Michael Gaddis approached the bank with a settlement offer.  The bank reviewed the offer and after a couple of weeks Michael Gaddis was notified that there might be a possibility of getting the entire lien extinguished via the Department of Justice (“DOJ”)settlement provisions pertaining to 2nd liens.  Although optimistic, Michael Gaddis continued to push the settlement while continuing to encourage his contacts to get the loan extinguished via the DOJ program.   Finally, on December 3, 2014 the borrower received a notice from Bank of America stating that they had received full forgiveness of the 2nd lien.  The borrowers were stunned to say the least.

As mentioned in previous posts, borrowers that have outstanding liens on their property need to try and negotiate a settlement on these liens as soon as possible.  Many borrowers think that if the loan has been charged off or if they have not heard from their lender in a while that the loan has been forgiven and they are off the hook.  The problem is that the lender retains a security interest in the property and most definitely will create problems for the homeowner in the future.  Now is the perfect time to negotiate settlements on 2nd liens such as a home equity line of credit (“HELOC”).  As the housing market recovers and the value of homes continue to rise the leverage that borrowers have against the lenders will decrease.

If you or someone you know has a lingering junior lien such as a HELOC and you are wondering what your options are please contact Michael Gaddis, Esq. at 760-692-5950 or by email at Michael@LawOfficesofMG.com.