Citi 2nd charged off, at collections, how much should we offer them?

Hi All, we just got my seller's 1st approved by BOA. The 2nd is a HELOC with Citi and went to collections, so now we need to negotiate to get the lien released. My seller's balance on the 2nd is $30,000. The "negotiator' with the collection company (NCO Financial) says they will want at least 50%, but of course they are just saying what they can to get as much as possible I'm sure.

Can anyone comment on what % of total balance owed to Citi or this collector they may release for? What has your experience been? I need this released but dont want it to cost my client more than it has to.

 

Thanks!!

 

Scott

 

 

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Replies to This Discussion

Scott -

 

Looks like Citi SOLD the 2nd to NCO.  I've been down this road before....  you will likely be able to get NCO to take 20 - 25% as they probably bought it for 5-10% so they will still make money.  Have the seller write another, updated Hardship letter and send along to NCO.  Hopefully, you will get it done as they will NOT release without settlement.  Also, make sure to get a no deficiency letter when a settlement is agreed upon.

 

Best of Luck,


Thom Colby

Broker / Negotiator

Newport Beach CA

Thanks Thom. In this case the seller actually has money, about $25K in the bank and NCO has seen this. I spoke with the negotiator's manager and he said that they are going to want more from her to release it since she doesnt have a hardship. Guess we can start at 25% and see from there.... either they get 25% or $0 if it forecloses right?

 

Scott

 

 

 



Thom Colby said:

Scott -

 

Looks like Citi SOLD the 2nd to NCO.  I've been down this road before....  you will likely be able to get NCO to take 20 - 25% as they probably bought it for 5-10% so they will still make money.  Have the seller write another, updated Hardship letter and send along to NCO.  Hopefully, you will get it done as they will NOT release without settlement.  Also, make sure to get a no deficiency letter when a settlement is agreed upon.

 

Best of Luck,


Thom Colby

Broker / Negotiator

Newport Beach CA

I have closed two recently with Citi collection companies both needed about 10% to release.

Hi Scott, What did BofA approve for the 2nd lien to get? You have at least that much to start with. Does the property have a foreclosure date? Here is some of the conversation, Let them know you want to work this out with them to everyone's advantage. Would NCO agree that it is better to get something than nothing?  The 3 questions I pose to the collection agency, asking nicely, are: 1. Is that the best you can do? (Then don't say a word, let the collection agency talk themselves down!), 2. HHMMMM, are you sure? again don't say a word, and 3. That still seems kind of high to me. again don't say a word. See what they come to for a number. Tell them you have to discuss this with all the parties to see what can be done. The national average is that the collection agencies buy liens for about .03 cents on the dollar and settle for about .09 cents on the dollar. I would think you may be able to get them to $3-5K.

I agree with everyone on this thread. 20-30% is reasonable on a chargeoff.

Start at 15%.  Good Luck

 

Thanks everyone for the great input!

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