Settle Promissory Note After Short Sale – Glasser and Glasser Collecting for United Guarantee Residential
My wife and I short sold a house in VA two years ago. A 3rd party "short sale expert" helped us through the process-sort of. The sale negotiation with the bank was held hostage by the Private Mortgage Insurance company (United Guarantee Residential). They agreed to permit the sale in exchange for my wife signing (only one on the mortgage) signing a note for $10000 due in $100 monthly over 100 months.
The short sale expert recommended that she sign the note (since sale wouldn't go through without it) but then not pay the note. He said it was fairly common and chance of them pursuing the debt was very small.
Well, two years later, she recieved a letter from GLasser and Glasser PLC that they had been retained to collect a debt owed to United Guarantee. She requested verification in writing and was supplied with the original note. The "short sale expert" is nowhere to be found...
We/she cannot afford to pay the full amount on the note--in fact, she is a student and between student loans and medical bills, cannot afford much of anything. WE have no credit card debt or anything like that, so besides the short sales, credit is excellent. We would like to avoid her declaring bankruptcy, if possible. In fact, we'd just like this to go away as quickly and cheaply as possible (whether that means settlement, lawsuit, bankruptcy, etc).
I have spoken with GLasser adn Glasser PLC and apparently the United Guarantee is willing to settle for about half of the claimed amount (about $5000). We cannot afford that right now. I counter offered $2000 but am not hopeful that it will be accepted. We first heard from Glasser and Glasser in mid-dec 2012, and we would like to resolve this quickly to minimize any potential harm.
What are our options? Do you have any advice for how to proceed? What would be a reasonable/average settlement amount for this sort of debt/this stage, etc? If we settle, what should we ask for in writing to minimize impact on credit (or even repair it)?
Should we speak to an attorney (any recommendations in Reston, VA)? What amount would be reasonable to settle at this point? Is there any way to tell where they are in their
—John
Settling the promissory notes that have been demanded in order to get a short sale pushed through is becoming pretty standard. Ideally you would have wanted to wrap this up with United Guarantee Financial before a collection attorney got the account, as settlements may not be as good when someone like Glasser and Glasser gets involved.
The promissory note you signed off on has been common in order to push a short sale through. It is a little different that United Guarantee Residential was who dug their heels in over the short sale. They may have had to pay a claim related to your short sale?
Signing off on this now unsecured debt may/may not have been necessary in order to get the deal done. But it’s here now. I am curious about whether your “short sale expert” only got paid if the sale got completed?
Like with any settlement, whether short sale promissory note – credit card debt – other.
Targeting how much to settle the hangover from the short sale for can vary. 20% happens often enough. Especially when these promissory notes get sold off to distressed debt investors for a steep discount. Now that the account is with Glasser & Glasser, 50% may be as good as it gets. But I think you can do better. Negotiating a pay off with a firm like this is helpful when there is a limited income situation. Better still when there are medical concerns. I am not being glib here. The things that make it tough to be you financially right now are the very same things you can leverage when negotiating.
It comes down to money. What you can offer and what they will accept. You mentioned offering 2k as a counter. If your counter offer is not accepted, you may need to be prepared to increase your offer to 3k, or perhaps 3.5k.
I have a few questions for you that you can answer in a comment reply below. Once answered, I will have some additional feedback.
Your wife is back in school. Is she working part time?
What other types of debts are showing on the credit report as being kept current? You mentioned you do not have any credit card debt, but do you have credit cards that report and show use?
Who was the original lender on the home? Who was the servicer of the loan when the short sale went through?
I do have some experienced attorney info I can pass along near Reston VA. You really do not need one if your goal is settlement, at least not yet.
I am not sure what you mean by how far along in their process they are. You sent a validation request and got the promissory note back. You can be sued by Glasser and Glasser. How soon that would happen cannot be known with any certainty, but your current risk exposure is high.
About Michael BoveeMichael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry. He is available to speak with you about your financial struggle and helps people resolve their debt problems daily.
Thanks Michael for the information. I was wondering since the promissory note signed has the same account number as mortgage account would that be 7 to 7 1/2 years from stopped payments on the mortgage or after signing the note at closing? I’m really concerned with this now showing on my credit report because I am in the process and in contract with buying a house and closing will be around mid June.
Time typically starts from the date of missing payments, so in your case it is likely when the first payment was due.
This could easily prevent you from closing on the home. Give me a call to go over more of your situation and I can offer actionable feedback from there. I am not available this morning, but will be in the afternoon. 800-939-8357, option 2 rings to me. If you do not get me live, be sure to leave a message so I know to return the call.
I live in New York. The new debt collector is Cadles of Grassy Meadows II, LLC and the former says Ocwen Loan Servicing, LLC, Servicer for Nationwide Credit Inc.
The SOL to sue on a promissory note like this one is 6 years in New York. That time has passed. The time for it to remain on your credit reports is nearly up. Neither Ocwen, nor Cadles of Grassy Meadows, can legitimately show on your credit reports for a longer period of time than the 7 to 7 and one half years from when you stopped (or never started) payments. If that were to happen post an update and lets go from there.
I signed a promissory note on a short sale I did in December 2009. It’s a Modification to the Original Promissory Note. It was for 119 monthly payments of $250 with 0% interest. I never made any payments and I never received in the mail or got any calls about making payments and I would always check my credit report to see if this showed up and it did not. The original mortgage would show up on my credit report and show up closed by consumer. A few weeks ago I received a letter from a debt collection company notifying me that they bought or were transferred this loan from another collection company I never heard of. They were informing me that I would now be paying them instead of the other debt company. I wanted to know what are my options here? Does the Statue of Limitations apply to this since it has been over 6 years? Also, I wanted to know that since this is a modification of the original note and the original note does not show up on my credit report anymore, can this debt now show up as a new debt since it has not been 7 years? Thanks
What state do you live in?
Who is the new debt collector, and who was the former?
Michael,
Thanks! Sorry I didn’t check this. I’ll call tomorrow.
Hi Michale! So, I received a 1099C for the $93K. Strange because this totally goes against the modified agreement as already explained. Can they do this? In 2012 they said they’d forgive $60K+ and I’d pay $450 per month at 0% for a total of $40K+. So now they switched gears half way through the payments.
Aside from the above, can one use monies used as a down payment, golf dues, HOA dues, mortgage interest paid on the vacant lot back when we had a mortgage to offset this? I mean it just seems to never end! I still don’t get how they just cancelled the debt after modifying the loan after short sale in 2012. Thanks! Michael
Call me this week to discuss your situation in more detail Michael. There are many oddities with your situation, but benefits too. I want to hit a few things in more detail.
As far as offsetting taxes I would encourage you to talk to a tax pro, and also read more about exemptions from tax on forgiven debt.
Okay. And so I figured. I’ll wait and see if there’s any contact made to me from a 3rd part collection company. If, I receive a 1099C for the remaining balance would it be safe to say they’ve written it off and discharged the debt? I don’t think that they could issue a 1099C AND send to collection.
It is reasonable to assume, but I see situations go FUBAR for inexplicable reasons (as evidenced by where you are at with Wells Fargo right now). I would keep well organized records like you are, and continue to place the money aside like you mention. Nothing wrong with a nice nest egg later on if this all washes out.
Thanks Michael. Sounds reasonable. One more update as of today: They have now reported to my credit that it’s closed with a $0 balance. My credit jumped 41 points to 773. If they come knocking maybe this is another card in my favor. Would it make any sense for them to close they account only half way through the $46K I owed? Do they consider possibly that they’ve taken enough and right the remaining balance off as a loss?
I do not think they are willingly writing off the balance as a loss. This could be another error, or it may be that they sold the legal rights to collect on the balance.
Thanks for the feedback Michael. Maybe a glitch and or human error indeed. I’m just a little tired of feeling the need to manage their mistakes. I’m not sure how obligated I am to continue if they’re telling me the account is “now closed”. I’ll sit back and put the funds into savings until I receive more indications on which way it’s going. You would figure a big name bank such as Wells Fargo would get this right. One final question. Do you think I’d have a leg to stand on if it came down to them pursuing me and me holding their own letter over their head regarding closing the account? Moreover, showing them multiple returned checks as I plan on continuing to send them in allowing them to return them? Thanks again!
It is likely that Wells Fargo’s mistake of closing the loan out is going to lead where any other loan in the same situation leads… placed in the recovery department, assigned out to a third party collection agency, or sold off to companies that buy bad debt.
I do not know if the letter and returned payments would help you win a lawsuit if you were sued, but they would come in handy, so save all of that in case you need it. I would encourage you to talk with an experienced debt defense attorney with mortgage experience in order to get a full handle on what any of that would mean (especially if you plan to continue to send the checks).
It’s funny that the advice is always to offer them a lump sum. If I had a lump sum big enough to satisfy them, I wouldn’t need any assistance! Ask anyone who claims to be an attorney or short sale specialist, and that’s the advice. It just infuriates me that there is not more regulation and uniformity for short sales. I am just going to keep paying my $250 until I die. I receive no statements, have no written agreement, and I have no idea if their balance matches mine. I guess it won’t matter when I’m dead.
Its an alternative to the pay forever plan or bankruptcy.
Well,I don’t have a “lump sum” hanging around so never proposed that to them. But now they’re stating they won’t accept any more payment as the account is closed. I’m wondering if I should just sit back and see what if anything happens since they wont accept my payments on the now closed account. It’s just strange how for four years they’ve been accepting payments on this modified loan and twice recently have closed it.
I would speculate it is a systems glitch or a human error that has reoccurred.
You can save up a lump sum, and sometimes the settlements are good enough that you can pull the money together quicker. That is how I would be looking at the situation at this point.
Michael,
I’m going to try and make this concise so it’s easy to follow:
In 2006 my friend and I purchased a lot in a gated community for $129K. We financed the purchase with Wells Fargo who’s Home Equity Line of Credit Department handled. That’s right, the HELOC Department financed a lot loan. Hoping to flip the lot we had an interest only loan for three years. The market tanked, the loan matured, and Wells Fargo pushed us through for another three years as we couldn’t sell and the lot was now only worth approximately $5K. So fast forward to 2012 after six years of payments, taxes,mandatory dues, etc. we were at the end of the second loan and they demanded the the full amount of $129K. Of course, we did not have this kind of money and Wells Fargo would not, nor would any other bank, refinance a lot loan that’s worth 95% less than six years prior.
My friend had just recently gone through personal BK and I was afloat. I aggressively marketed the property and offered a local agent a cash commission if they were able to come up with a buyer for a Short Sale which Wells Fargo stated they would consider but not guarantee. Meanwhile, the loan had ended and I was in default by a few months. No signs of foreclosure just yet. Luckily, I think, we found a buyer who purchased the approved Wells Fargo Short Sale for $7,500K.
Wells Fargo, in their approval letter, stated that an estimated $67K would be forgiven (I handled the 1099C) and that I would “continue to be obligated to pay Wells Fargo $46K in accordance with the existing account agreement as modified in the flowing manner”: $46K over 96 months at 0% and $479 per month. They also said that my friend, who filed BK, was NOT a party to this agreement. That’s understood.
Okay fine. Call it renting your credit etc. but I had and still have a high credit score and was not walking away. So, I have been paying for 48 out of the 96 months. The smaller question is: Is this a “Promissory Note” OR just a “Modified” existing loan? Wells Fargo uses the word “modified” and the loan number has stayed the same.
NOW, here’s the BIG question Michael. Last August (2015) one of my monthly $479 payment was returned to me by Wells Fargo stating they “could not process the enclosed payment because the account was closed”. I still wanted to show that I was attempting to hold up to the agreement in good faith. So, I contacted Wells Fargo Recovery to advise them that I would like to continue my obligation and they kept telling me the it was in the BK Department. After finally getting them to realize I was not the one that went BK, they sent a letter stating that an employee coded the account incorrectly and that I could continue making payments and that they would offer more training for the employees. ??? Now call me crazy to want to continue paying after they stated that account was closed but the last thing I need is five years from now them knocking on my door and, as they stated in the final Short Sale approval letter, immediately reinstate the $129K.
So, they agreed to waive the two payments they returned and I made my October and November payments without incident. Then, I made December’s payment and added some funds to accelerate my obligation. When I realized the check had not cleared the other day I called and guess what, the same thing occurred whereby they state that the check was returned to me and that the account was closed. Today, I received the check back with a letter stating, “Wells Fargo is unable to process the enclosed payment as the account is now closed”. I called them today and asked about it and they said if I send in further payments they would most likely be returned. When asked about lien release and such they stated I’d receive further information as the process concluded. This all sounds good but you can tell that they’ are standard answers to my questions.
The letters are always addressed to me and my friend who’s BK and every time I call they ask if I have any questions about the auto BK information you receive when calling, prior to speaking to a Wells Fargo representative. Now, I’m not as quick to come forward asking to pay. If they keep “closing” the account what recourse do they really have? All my calls to them I’ve recorded and of course have all correspondence.
BTY – It’s always been reported as a “charge off” and open with a balance of $129K. I’ve disputed that in the past and they said it would stay as such until the $46K was paid in full. It’s changed slightly now by there being no data in the “monthly payment” area.
Any thoughts? The largest concern to the Final Short Sale Approval letter and the modified loan is that they state, “Wells Fargo has not waived, is not by this Short Sale Final Approval waiving, and has no intention of waiving any of its rights or remedies with respect to your default in this Account”.
Thanks for reading.
You appear to be making payments to Wells Fargo on a modified loan, and not a promissory note. The loan is now unsecured. Your credit is already damaged. Why not do a lump sum settlement for less than what is owed? Have you given this option any real consideration yet? If so, what prevented you from making progress with this approach?
Michael,
Before I write to you about a unique experience with a Wells Fargo Promissory Note from the Short Sale of a vacant lot I want to make sure you’re still here to answer as it’s been some time since the last comment was posed. Many thanks!
I am surprised this page has not drawn more comments, given the amount of short sales that took place, where lenders would not approve without signing the promissory note. Post at will. I am here to respond.
Hi Mike,
I’ve settled all my credit card debt successfully. But i wanted to see if it is possible to settle a lien put on my property by my Condo Association. Its approximately 12K. Will they do a settlement or the lawyer they hired to put the lien on me? And if so what is the best approach? This is something i have to get cleaned up in order for my title to be clean on my Condo. I’m trying to do a Deed in Lieu and this is holding things up.
Thanks.
Congratulations with settling those credit cards!
I moved your comment over to a page that is more relevant. I would encourage you to read from the beginning and in to the comments.
I have witnessed some unyielding Condo Association rules and guidelines, with board members who do not relent on accepting less than the balance owed.
By how much are you underwater on the Condo?
How much do you know about the board, or the finances of the association?
Thanks Michael,
I’ve heard the same regarding Associations. I’m just trying to come up with the best approach now moving forward.
As far as my condo. I have underwater by approx 100K. My lien is for 11.5k and i owe another 8k to the condo fees since they placed that lien. 19.5k total.
The board seems to be a mess. and the finances are even worse for the association. Constant assessments and increases over the last 2 years. They are struggling.
Any advice on the next step would be helpful.
THanks
With the association having financial difficulties of their own, they may be more likely to accept a reasonable offer to settle.
What amount are you prepared to offer to settle?
Yes that definitely makes sense.
Would I be dealing with the association directly or the attorney that they hire to put the lien on me for the 11.5k.
My goal would be to settle the lien for 50%. And then get on some monthly plan with the other 8k that hasn’t gone to lien yet.
My intentions here are to stop the block that this lien in causing in my deed and lieu gameplan. Wells Fargo said they cannot proceed without a clean title.
Wells Fargo seems very cooperative to this point and will to accept a “mortgage release” which is how they refer to the deed in lieu. As i said before i’m about 100k underwater. So I don’t want an 11K condo lien to hold up a 100k mortgage plan. I have the big picture in mind here. But still would prefer settling on this lien and not giving full amount.
My house closed in July 2014, it was a short sale. The closing attorney called me in September to come to his office and sign a new promissory note because the bank lost the original one I signed. I’m yet to go but his office keeps calling saying the short sale will be reversed if I don’t sign a new promissory note. I want to know if it can be reversed for real or they just trying to intimidate me into signing a new promissory note. I live in Rhode Island. Thank you.
I am not sure how that is going to work in Rhode Island. I would encourage you to call and consult with an experienced consumer law attorney and get an opinion from them about what is required of you.
Who is the bank requiring the promissory note for the short sale? How much is the note for?
My condo’s short sale when through in January 2014, there was about a $100k difference between my loan and the short sale price. I have a promissory note with Freddie Mac in the amount of $25k managed by a debt company (DTA Solutions) to be paid over 10yrs. My first payment is due June 1. I’d like to negotiate the debt with them however I’m afraid I don’t have a lot of leverage, no debt other than this, inexpensive rent and I gross almost $50k/yr. I’m wondering how to best approach the process.
Should I make an attempt to negotiate upfront before starting payments or should I attempt to establish a good payment history then negotiate? What should I start off negotiations at, a reduction of 50%?
Also having closed in 2014 and not knowing if the tax forgiveness will apply to my loan forgiveness, can you help me understand what portion will be considered taxable income? Is it the forgiveness amount ($100k) less what I will be paying on the promissory note ($25k)?
Thanks in advance , reading the other comments and answers has already been helpful.
Jennifer – Talk with a tax pro about what sounds like roughly 75k that has been forgiven. You will want to build your strategy form here around any taxes that result from this.
Post an update with what you learn, and lets dig into repaying and/or settling the promissory note then.
Also, what are the totals of debts you have out there that you continue to pay on time? Any unpaid debts? If so, how much does that add up to?
The only other debt I have is a credit card that averages around $1,800 but I pay it off every month. I’ll look into meeting with a tax adviser within the next month or so and report back on the tax implications.
i have taken loan against the promissory note, and according to the commitment i paid honestly, what is the document in writing to be taken from the promissory holder. please give suggestion with example
Can you post a comment reply with more details of the situation you are in with the promissory note? I do not have enough to go on to offer any meaningful feedback.
Hello
I am active duty military and it this was a VA loan. In 2007, I bought a home for 179K with BofA with an interest rate of 6.2%. In 2011 I refinanced with Navy Federal to take advantage of the interest rate (3.25%). Never had a late payment. I received orders for overseas in 2012 and had to be gone in 6 months. Around May 2013 I concluded a short sale with Navy Federal that left me with a 51K promissory note for 15 years (267 per month). The VA covers a certain amount of the loan I believe it is up to 40% of the fair market value. Anyway, with the VA only covering a portion of the current value (89K) I was told in order for the sale to go through I had to sign. I bring this up because I just did my taxes and showed agent the tax form and from how the agent explained it to me it sounds like my debt was forgiven, but I am still being made to pay. Anyway, it all doesn’t sound right. The house is sold, VA pays up to 40% or 50%, the bank changes my debt from a home loan to a personal loan, and then I do my taxes and the form I was given (1099 I think) represents canceled dept. Anyway, I feel screwed by the bank and tax season is brings up the bad memories. I have been reading the comments on the site and would like some advice on trying to settle this. I am about to have my second child and am due to get out of the military in the next 5 years. Any advice would be welcome.
Are you referring to settling the promissory note that resulted from the short sale, or the tax debt?
I signed a promissory for $158,000 on a lot I owned in order to get the short sale to go through. The note was for 3 years @ $50 per month, then a balloon payment for the remainder. I hired an attorney, but they wouldn’t budge (Hancock Bank). I made the payments faithfully. The negotiator said they would “renegotiate with me at the end of 3 years”. Nothing formally in writing about that (I asked, they refused), except email exchange, which I still have. They told me to keep the email as proof they would renegotiate. The 3 years are up, and they’ve sent 2 demand letters for the balance. I called the assistant referenced in the first demand letter, who said the original negotiator would call me back, but it’s been a week, and no call. I intend to call back next week, but what can I expect, and what are my option if they won’t rengotiate a reasonable payment? Should I try to settle.? I have a little cash, maybe 8k, but I doubt that will do it. My financial situation has remained static, and everything owed is still owed, but current. Thanks for any advice.
Annie – I do not like what I am seeing out of promissory notes with balloon payments like yours. If you are serious about settling this you may need to come up with significantly more than the 8k. Are there other resources you can pool together? If so, what would that amount to over the next few months?
Certainly nothing close to the $158,000. They have now increased my payments to $250/month, which is doable, but no end in sight! I asked them for a negotiated payoff amount–what would they accept–but have not heard anything in over 2 weeks. I could borrow a bit more, but nothing like 100k or anything. The increased payment came with nothing in writing…just a verbal, which makes me nervous.
Annie – I will have some additional feedback to offer after you post answers to the following:
What state do you live in?
Are you working at a reliable job?
Do you own a 5 yr old or newer vehicle outright?
Do you own a home or other real estate? Free and clear, or mortgaged?
If you are making current credit card balance payments, what are the total balances owed?
Husband’s answers to same questions.
We both live in Virginia.
We both have reliable jobs.
No. My car is paid but is 6 years old. His has a lien.
We own our home, mortgaged. We own 2 rental properties together, with mortgages, and I own 2 additional with mortgages. None can be sold for the mortgage amount owed, but all are rented.
Credit card balance of $6000 (down from $20,000–a debt from my previous marriage). SBA loan balance of $20,000.
Okay – Your profile does not suggest to me someone who can get a bang out settlement on the promissory note (10% to 20%). You have too much out there as assets (whether actually under water or not), and too much current to show any real hardship.
Well, it’s an absolute struggle every month to keep everything paid, and with the uncertainty of this note ( will they call it due? Will the payment go up again and how much?) only adds to it. Every little repair that comes up, every vacancy, puts me on the brink of disaster. I need to replace the roof on one property, but I can’t afford to do it yet. So, while it might appear I’m doing ok, it’s not the day to day reality. While I do have a steady job, it pays 1/3 of what I made in in 2009. Believe me, there’s not much left at the end of the month!
Annie – I know what you are talking about. I am only commenting from the perspective of how your file might be viewed. And if I am a debt collector, or a recovery specialist at a smaller bank, I would see you as highly collectable – even though the real picture would prove otherwise. And the only way they see that picture is by you, or someone else, painting it for them. I, and others like me, train people how to paint their own picture to creditors and collectors, or are hired as the artist. But I would have a hard time getting this settled for less than 20%. You would possibly be able to force the issue in a chapter 13, or you could shed the entire promissory note, and even the other properties that are at/under water, if you qualified for chapter 7. Have you thought about how bankruptcy can be used strategically in your situation?
My husband has a security clearance, so I don’t think it would be wise. Truthfully, however, I am not familiar with the differences in or consequences of the bankruptcy options and process.
It would be worthwhile to talk with an experienced bankruptcy attorney. Many offer a no cost initial consult to get the serious and heavy lifting questions (like security clearance, keep or let go of rental property, etc) out of the way. You can look for one nearest you at http://www.nacba.org
Thanks for your help and advice. Much appreciated!
We had a hell of a time trying to get Navy Fed to compromise when I was trying to get the short sale. I gave up on a Job offer on the east coast that would have extended my career due to the uncertainty of my financial situation. Its a very unfair situation to the Smaller lender that the entire amount of the Short-sale goes to the largest loan. We tried to negotiate this with BofA but it wasn’t happening. I will be receiving a pension in 2015 and what little our business makes (Ballroom dance studio). Physical limitations prevent me from making more. I wish there was a way I could leverage with an offer but Frankly I need money for a down payment if we are going to purchase in Pennsylvania when I return. If you hear of any circumstance where Solders and Sailors Relief act bails us out of a promissory note please let me know!
$5000. Please! Pay it off! Your getting a gift. I was socked with a 26000 Promissory note and have been paying on it 144/month since July 2010. I’m sure The real estate agent made out well on your shortsale . Mine got 17K! These people are not your friends. Hunt them down. I wish I could exterminate the whole lot of them. They are parasites! The banking industry got bailed out despite their dysfunctional lending practices and those who were noble enough to negotiate a short sale are getting screwed. Consider it will take me another 12 years to pay off the note. I should have just walked. I’ve served my country for over 20 years but the Filipino janitor down the street who bought the same condo gets off without having to pay anything more. I’m paying for him instead. Nice
John – What was the reason for the short sale as opposed to walking away from the condo? What is holding you back from settling the promissory note from the short sale then and now?
Michael I do check the news frequently to see if there is any legislation which prevents banks from doing this or to see if there might be some new forgiveness clause or trend. I am Active Duty in the Service and have a higher security clearance so walking away jeopardizes this, however I am getting out January 2015. THe Bank I deal with is Navy Federal. Their issue is that I refinanced with them to the 83,000 loan. which I did but it was solely to lock in a lower interest rate in 2006 (6.5%), because my HELOC was going up every Month . THis backfired in a Big way. Had I just stayed with the original HELOC it would have been forgiven along with my BofA loan for 325,000 as BofA agreed to the short sale all along and this was their practice at the time. Navy Fed treated me like a delinquent borrower and imposed a promissory note for 26k after much haggling and indicated I would be responsible for the full amount of the loan (69K at the time) if I did not agree to monthly payments of 144/month 0interest. I saw this was the only way as I had a buyer who had hung in there 6 months on this . Navy Feds take on this is that they have to look after their members of which I was one at the time! Im all for renegotiating but what leverage do I have? I am leaving my Job in San Diego to move back home to Scranton PA to live with my Wife in her parents house. I have a small business there which makes borrowing difficult. I will be moving into an apartment after two months of paychecks hit. THe Business is small and we need to work on it to make it grow. I do not want to jeopardize potential future employment by refusing to pay.
Thanks for the follow up info John. I completely agree there are rock meet hard place situations where you are damned if you do, and damned if you don’t. If you do find yourself in a position (security clearance not an issue, business contracts, job apps) where you can stall payments on the promissory note in order to reach an affordable settlement, Navy Fed is one of only a few credit unions I consider reasonable in their negotiations and settlement expectations – at least as of today , and since a little after the recession set in.