OfflineAre you ready for this DG family? You are about to be blown away with what I tell you. And, if you are in a situation where your home is considered underwater on Zillow, regardless if Zillow is right or wrong, you may also be able to do this to. AND, you do NOT HAVE TO BE BEHIND to do it. I was always current. 
So, I've had this goal of eliminating my 2nd on my primary home since I began my journey. And, although I've been working hard and am turning around a company that was once so negative and had lost massive net worth due to the RE market turning around, I wasn't making a dent in this goal (some, but not much considering my balance). Until now.
I'm almost afraid to reveal this to you. I have essentially played by the banks rules, frustrated because I could NOT get a loan for the life of me with my situation of showing negative for so many years, and all my efforts being useless to the banks; even the portfolio lenders told me I need to show a profit on my tax returns before I can use them (P&Ls will not suffice as well as all the new efforts; UNTIL they're on the tax return); although they applauded me for the massive steps I've taken and progress I've made, they still would not give me a loan. Credit in the 750s-800s is literally useless to me.
So, I took this problem to heart, and instead of dwelling on it and allowing it to rule me and be a big negative looming over my head and stopping me from pressing forward in RE, (you know what I’ve done with RE since 
), I took over and used the banks ratios, calculations, and standard procedures to my advantage. I read about 2nd liens being stripped through bankruptcy and when buying homes, so I thought, why don't I try to do that for me; only I won't file for bankruptcy and I won't be selling my house. Sounds way too crazy right? It will NEVER happen is something I heard, a couple of times. But I heard THAT before with a few *cough* *cough* *sputter* *sputter* *cough* things along my journey, haven’t I?
I've been holding this in, because I actually wanted to SEE it on my credit before I posted. Well, its there today! I got word 2 weeks ago from my 2nd lien holder on my primary mortgage that they ACCEPTED my proposition to strip the lien for 10% of my original loan balance. So, I have to come up with $34,900. Yes, I am stripping a lien off my property for 10% of what I owe. You can do the math, but it essentially adds up to several hundreds of thousands of dollars of debt being removed from my liabilities, plus takes away a liability burden of over $2100/month from me and my family!!!
I don't know about you, but I call that a WIN/WIN. Banks never lose, they've gotten interest from me pretty close to what I still owe, they don't have to worry about another 'underwater' house, and the government will pay them for settling. I’m told sometimes these settlements will show paid in full only; sometimes they'll say 'for less than owed', but they would not allow me to negotiate that. I could not get a mortgage loan anyhow before, and it nicked my credit 45 points; so its 711 now instead of 750-800.
BTW, not once did I make a late payment, so when these companies (BANKS) tell you ‘you must be behind on your payment), that is ABSOLUTELY not true!!!!
Double BTW. Did you know, I’m doing a balance transfer to my credit cards, who will charge me a WHOPPING $250 (actually, they messed up a transaction they were doing, so the credit card WAIVED that altogether....) to use their money at 0% interest for over a year…. 
I know I'm going to get bombarded with questions, but what I will do is recommend the person who helped me achieve this. My goal is now a reality. I no longer have a second mortgage on my home. Is it the way I’d planned it or intended it? No, just like the refi out of hard money didn’t go as planned….. but I can’t complain…
Different banks are settling for different amounts on the dollar right now, so if you have what Zillow considers to be, an underwater house (owe more than Zillow says its worth), regardless if Zillow is right or not , and you have a 2nd mortgage, I just may be able to help you overcome that issue a little or lower your first mortgage with principal forgiveness. I have the best proven contact to do it!
Every day, in EVERY WAY, I am becoming a better and better person.
It is CERTAIN I will CONTINUE to SUCCEED!!!!
Hi There Tammy arent you awesome!!!!!!!!!!!, Jim
jbischoff
He recently settled his and now does it for others (only friends at this time).20 cents on the dollar and sometimes less.I have added him to my power team.It's good to hear others are doing this as well.
I think this should be considered a deal! Maybe even two deals!!!!
Love it!
Karen
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That is great news! Thank you for sharing this.
My family is why I do this, for my wife and my 2 boys - Nay, KII and NiK. Without you, my life would be meaningless.
It sounds too good to be true. You really know how to tackle a problem and make it a positive don't you? Congratulations on that huge freedom from debt!
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That's great, keep up the great work.
Jean Maestre
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Tammy, that's very impressive. 10% of the loan balance is unbelievable.
Chase made an offer to my brother of 63K on a 249K balance, which I thought originally was good, but yours is great!
I would consider that much much better than 1 or even 2 deals.
Never set limitations! There is always more than one way to make things happen.
it isn't showing on my credit officially yet; but it is showing a 0 balance; so I'll let you all know what my credit score goes to. Time to work on Phillip Tirone's 720 credit system.
My credit went down the 45 points due to having 21 inquiries trying to refinance out of my hard money loan.
Sounds awesome! You pu a lot of work into it and it paid well! Keep it up!
great use of your time. Getting rid of $306K is certainly worth the effort.
Always Looking to Acquire Houses | Always Looking to Amaze Investors
Tammy, what you have accomplished is nothing short of amazing! You have the touch! Thank you for putting yourself out here for us, even knowing you would get inundated.
Oh yes, I need to do it. I would welcome any outline you would like to offer up on what you might do in my family's position!
I've chatted with Keb64 about my primary and my original home being underwater, and my daughter's 2006 purchased home also being underwater. I was thinking to do the SS's, but it is so scary.... not really the rental, but my home for sure. My credit is already hit hard from my sign business's use of my credit cards and the limits being zapped.
Payments have been current on all three houses, with no lates. I only have a second on the rental house, though, so I guess your amazing second obliteration won't be the solution here.
My daughter's credit is excellent and she is settled with a family, so she does not want to short sale.
It's a mess. I would be happy to hear any recommendations you have.
I've already started credit repair, but it will be a long haul. In the meantime the sign company is trying to support 2 households in our family-- but it had triple growth back in 2005-2008, followed by a hard hit the next 2 years leaving us currently at 20% revenue as compared to 2008. EEEEK!
My RE earnings are amazing, but I have put every bit of it back so far into education (probably much too soon-- eeek, again). We are struggling terribly. In debt $125k, all lines of credit are gone. Our (2) 2006 houses (ours and my daughter's) are underwater by $80K each and my primary (leveraged for the business several times) is underwater $241,000 according to Zillow!
I keep thinking if I just keep making money in RE and when I hit my $100K goal in Aug that I'll be ok, that I will be able to start recovery. But I question it mornings like this.... my daughter (who has perfect credit, a wonderful family, her husband brings in good money, she is frugal, they gave up their cable! and she decided to come back and work/run our sign shop 7 years ago, and in 2009 when she saw the hit coming she stopped us doing anything unnecessary, we tighten our belts all around as a company under her direction, and now for 2 years she has only taken half pay, (my husband & 1 also) and she told me last night her bank account has been overdrawn for 2 days! She can't cash her last two paychecks because the business needed the money again!!!!
Mornings like this are tough.
-Love you all!
Thank you
Never, Never, Never Quit, N3Q
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"Skip Deal #1, go straight to Deal #2; it's so much easier."
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Tammy-that is awesome what you accomplished, and even more awesome of you to post it here for everyone to see and learn from you. It's obvious that the housing burst hurt many of us, but we are now making a difference! Thanks for sharing!
Tina- wow- I can feel your pain! but I know that you're out there making it happen, and you will get through this hardship... stay strong girl!
Valerie
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Your DETERMINATION to get things done in the face of resistance is is second to none!!!!
Nice job !!! And to share this info here is FANTASTIC!!!
Jay
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Grabbed this from the other post. For some reason, posts are disappearing on me, and then I just repost them (I think its the new spam filter), so this thread just posted again today out of the blue. I'm moving Mike's post over here and deleting the other one.
Posted on: Fri, 06/08/2012 - 17:56 new #1
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Amazing job on your success
I have tried to do what you have done. I have tried to go to the second lender and ask them to sell me the second lien on the home. This was a home I wanted to buy, they were upside down and if I could pay $10k for it, I would have been able to buy the home at a great price.
Who did you have to talk with to settle the 2nd lien? How did you get to them? What did you propose as a settlement that they decided to take it?
I would love to know.
Thank you
Mike Kessler
This was such an INCREDIBLE relief! Tina, I will send you my contact so you can do this too. They are also able to short refi firsts where they can refi while forgiving a part of the principal. The motivation for the bank is that if they don't forgive some of the principal, then it will eventually short sale or foreclose. Banks don't want any more property.
Mike I did this with a negotiator who knows the exact words to say to the banks to do this. So, essentially, by wanting to get rid of the 2nd, I went out and found someone for my power team that could help me with the task.
Your networth is only as valuable as your network. 
So, yes, I essentially bought my own note for $35K. 
The motivation is to say that the owner is trying to avoid bankruptcy and to be cordial and nice to them
If an owner files bankruptcy, the bank will not get anything on the 2nd, so its a bit of a motivation to them, and that's part of the angle. The other strategy was to keep paying the bill, and never be late. We dealt directly with a negotiator at the bank as well; so it was negotiator to negotiator. They actually didn't settle as low as we were going for, which was 10% of what we still owed; instead of 10% of the original loan amount, so it was $5K more than I was going for.
So, this was a VERY valuable addition to my power team, and ended up helping me out in a tremendous way! And, I can always recommend this person to others in the same situation. I'd post it here, but I believe that's against regulations, so PM me and I'll give you my contact's information.
Ok, so the payout was officially reported. My credit score is ... 691. A 13 point hit.
For some reason, my husband's took a little bit more of a hit and is at 679 (A 32 point hit). Not too bad for the incredible relief this had to us!!! With all the activity we have on our credit, that will be back over 720 in no time. 
Give it 1 to 3 months. 
Persistence and Determination is key in this journey! And each time I persist, I have overcome what others say is impossible. Repeatedly. Result? Nothing is impossible and everything can be done with a positive mental attitude and turning problems into opportunities for greater things!
Tammy, how will this impact your income tax for next year? Will this be looked at as a gift. I am asking because a friend of mine was underwater for her primary mortgage loan and was approved for a mortgage reduction by $30K. Need some education on this matter.
Sandra
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Hi Sandra. Excellent question. I did ask my CPA about this, and because of the government program right now that allows mortgage debt that is forgiven through a short sale, it will not count as income through the end of 2012, and it will not be taxed. On the credit report, it is recorded as a short pay, and the wording is "account legally paid in full for less than the full balance".
Also, even if it did, I have receipts that show that all of that money was put back into my home, so none of it would be taxable anyhow even if that law was in place due to all the money being put directly into my home.
Just got the good word that I can STILL refinance my 2 investment properties that are underwater and have a 6.5% interest rate/interest only with the HARP program; EVEN with this on the credit report. And, I no longer have any DTI problems in the banks viewpoint. What a relief!
Sorry
AWESOME! I want to explain to you what I'm learning. That 691 credit score is my CONSUMER score; and banks do NOT use that. Its so SHODDY what these banks try to pull to trick us as consumer's. There are FICO scores and then there are CONSUMER score. 0 creditors use those CONSUMER SCORES> So... my REAL FICO score is now 631... the 711 WAS a FICO score because it was run by my mortgage guy, so that means I lost 80 points in reality. I will have it back up to 720 in no time.
WATCH ME! Your FICO scores can only be found at www.myfico.com; the ones you pay for at annualcreditreport.com are WRONG and are NOT what banks look at! (you CAN get your FREE credit report at that address, just NOT the correct FICO score.
I will keep you updated on this journey as well. I want to show you and prove to you that ANYTHING is possible!
Don't EVER believe someone that says you CAN'T do something or it is IMPOSSIBLE. Those words and NEVER should not be words in your vocabulary. 
Always great information!
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But, it ISN'T the payoff of the mortgage for 10% that is hurting my credit... but the fact that I put it all on my credit cards at the 0%! I'm amazed! I now have 80% of my available credit card limits utilized due to carrying $35K on credit. Once I start paying that down, I'll make significant improvement in my credit rating.
Its amazing the games they play with our credit to get us to pay more in interest. Phil's program is amazing. If you haven't tried it, its at www.720credit.com 
That is amazing what you did!!!! I wish I could have done something similar to prevent my Deed in Lieu, but it hasalready been approved. I have to be moved by July 22nd.
so for the next few weeks, I'm gonna be looking for an apt or a house I can afford. I guess I'll have to put REI on hold for a couple of weeks!
shirley
Everything works out in the end. If it hasn't worked out, it's not the end.
You have not lived a perfect day, unless you have done something for someone who will never be able to repay you. Ruth Smeltzer
It is what it is 'til you change it.
You don't have to put REI on hold; just spend a little less time on it during your transition. I researched doing this for almost a year when I had the problems refinancing out of my hard money loan and then made this contact. Of course, I had my husband help finalize and edit the hardship letter only and so he is taking 100% of the credit for this. All the hours of research and paper pushing I did don't count.
But, I just snicker on the inside; but he keeps trying to tell other people it was him that accomplished this and not me. Some things just never change. 
This is just part of my journey I've come to accept will not change. And it will continue to be anything that goes wrong is all my doing and anything that goes right is all his doing. SNICKER on the inside!
Shirley, if you don't have Phil's program, definitely get it! Its is really great! It will help so much. If you don't want to buy the whole program, the book itself will help you do it as well! All the best, move on to the next chapter in your life and be so very proud of all you've accomplished and overcome!
wonderful strategy. thanks for sharing.
I wish I could post it here, but yesterday I received full reconveyance of the bank's interest in my home.
That's a nice piece of paper to be holding. 
Today I found out something serious and wanted to share with you because this is something I never knew and it is important information. I have followed Phil Tirone's program and have been successful in raising my credit, but every time my credit is run, it is showing 'serious delinquency' and 'time since delinquency is too short'. But the problem is, I have never made a late payment at all. Even doing this payoff, I kept making my payments and never paid late, and never paid late on any of my payments for anything else.
It appears Citimortgage has reported that I didn't paid my final mortgage payment before the payoff, which is absolutely NOT true; and it DOESN'T show on my credit! There is NOTHING on my credit report to suggest they reported it as late. We had to physically call Equifax and apparently there is a SEPARATE report, that we can't see as the consumer, showing we did not make that payment, causing those serious delinquency comments to show up on my credit. That alone will put my credit back up to 740 after that is repair.
But, BE WARNED, that there can actually be lates on your credit that YOU CAN'T SEE ON YOUR CREDIT REPORT that the credit agencies see only on a report we aren't privy to seeing. Sounds pretty crooked to me... So always be diligent!