Mortgage Settlement Quote Offer

Just looking for some opinions on a mortgage settlement quote offer I received in the mail a while back. They are asking me to call in for a quote for them to negotiate a settlement with my 2nd mortgage lender. The letter claims the can negotiate a settlement for tens of thousands of dollars less than my balance without any upfront costs, no appraisals, they handle all paperwork, all done in about 6 to 8 weeks. This is what I am sure of, if it is too good to be true, it probably is, nothing that good can be cheap cost wise. I am upside down with my mortgage, but I never plan on selling my house. I have no financial hardships whatsoever, I also pay an extra $1000 combined towards both principals each month. So why would a lender want to settle for tens of thousands less when they can have me make payments for the original balance over the whole life of the loan?

If the lender is one that was involved in settlemen with UG Gov't over mortgage/foreclosure issues, they may be required to 'fix' so many mortgages. Or it could be that they are receiving a credit from HARP program or something similar.

Personally I would only entertain the offer if it came from the bank that owns and/or services my loan (which actually happened to me). If it's an unsolicited offer from a mortgage-broker type I'd not do it.

Just a WAG ... did the letter come unsolicited from a company you've never dealt with before?

Mortgages are public documents. Anyone can find out that you have a mortgage with ABC Bank and send you a letter promising to help you refinance at a lower rate, but that doesn't mean that they'll actually be able to do anything for you if you call them or that they will do everything they promised. It's like all those letters you get from insurance companies, telling you that you're paying too much for auto insurance and you should call them right this minute for a lower premium.

Unless you are the one who initiated contact with this company, toss the letter and go on about your business they way you have been doing.

Oh yeah, I forgot to mention, the offer is from a company not affiliated with the lender..

Yes, it was an unsolicited offer, never dealt with them before..

Don't talk to them unless they are a "BANK" and are FDIC insured. Places that are not banks don't have the same regulation as banks do.

Toss it. Several things may happen. Most involve you stop paying and make a cash offer to settle. If they do settle for less it could be a taxable event and a hit on your credit report. I work in mortgages and spent some time in loss mitigation. I can promise you that there is no free lunch. If you borrowed you need to pay, even if you are upside down. Offers to settle for less or reduce principal are limited at best.

Read your last sentence to yourself any time you get another letter like this and you think about doing it. You hit the nail on the head.

Quote: jmurillo74

So why would a lender want to settle for tens of thousands less when they can have me make payments for the original balance over the whole life of the loan?

Beats me, but alot of lenders are handling this stuff in large blocks with armies of untrained clerks processing paper so I'll give it a go for you. If it works, you owe me this humungous fee, if it don't work, you owe me this smaller fee. Simple.