Profile picture for user45862427

What does it mean now that my HELOC lender has released their lien?

I recently received a letter in the mail from Wells Fargo, the lender for my HELOC with a $250,000 loan balance, stating that they were releasing the lien on my home.

The background: Due to financial hardship, I haven't made a payment on the HELOC in years. I modified my first mortgage and then filed for Chapter 7 bankruptcy soon after. Due to the bankruptcy, Wells would not work with me on a modification. On all of my credit reports, they report the loan as if it were included in the bankruptcy, so my failure to make payments has never had an effect on my credit. I had always thought that I would offer them some sort of settlement as soon as I was in a position to do so, but that time seems far off at this point.

The details: My home is currently worth approximately $540,000. I owe about $475,000 on the first and about $250,000 on the HELOC. I assume that they have come to the conclusion that they're not in a position to recover enough if they were to try and foreclose. Even so, I don't know what they have to gain by releasing the lien when I haven't requested that they do so. I'm not planning to short-sell the home.

So why would they do this and what does it mean to me?







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September 17 2013 - US
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Answers (6)

Profile picture for poet0084
I have a similar situation.. I left my home because I couldn't afford it.. stopped making payments in June 2013.. then in December I called to get info on a short sale process... never even did the paperwork or anything.. just spoke with them..Then my step dad died and I was away for a while.. and I didnt call back since December.. Then I out of the blue 2 weeks ago I received.. a copy of the release/ reconveyance.. notarized and filed in my county.. then 3 days ago I received all my original loan documents marked paid in full..original lender was AIG/Wilmington Finance ..  Also received a list of all the servicers that have had my loan.. Today I called caliber who was the last servicer.. they said a lien release was sent out to me a couple of days ago.. I called the county were the house is they said it was filed in there office last week.. satisfaction of mortgage.. reconveyance of deed.. they checked everything they have and the house is in my name with no lien.as of January 13th 2014.. I don't know what is going on.. I am so confused..
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March 10
Where do you live? There may be evidence of their action available online. They may have filed a mortgage satisfaction that is proof of their lien release. If they did, they did. Doesn't seem like something they'd BS you about. The States' Attorney's General lawsuit may have prompted it. I have seen it happen with an explanation that it was due to the settlement.
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September 17 2013
Profile picture for user45862427
Thank you. Yes, it has been released (I am the realtor). 
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September 17 2013

 I would suggest you pull a title report on your property and see if WF released the lien.  Your previous realtor or lender should beable to assist you with this.   Ive seen to many time where the banks wouldnt work with people  to settle but then you get this in the mail.  Good For You.

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September 17 2013
Profile picture for user45862427
Thanks for your reply.

Both mortgages were listed as debts in the BK, but neither were included (discharged). I know that they haven't forgiven the debt, because they sent me a statement on the same day as the lien release letter. They have simply given up their claim against my property. I just cant figure out what they would have to gain by doing this or how this might affect me.
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September 17 2013
Profile picture for shapiroamg
This is probably a better question for an attorney. Releasing the lien says they have separated the loan from your property, but I wouldn't assume that they have released the liability of you owing them.

You mention the BK but was the debt on the schedule of debts in the BK paperwork??
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September 17 2013
 
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