I was just presented by a co-worker with a letter from a very large mortgage servicing company. It was sent to a homeowner in CA who was likely upside down on their mortgage and still current on their payments. The letter basically stated that the lender would accept about $25,000 to settle a $71,000 debt on a 2nd mortgage. The difference would also be reported as 1099-C income. That's about a 46,000 reduction!!
At first I thought this had to be a scam, but after some investigation, I confirmed that this was a ligitimate offer!
Draw your own conclusions, but I figure some lenders are trying to stop the bleeding and get as much cash as possible before they are put into a position where they'll receive pennies on the dollar in a Short sale or foreclosure.
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