I recently did a short sale of my property where the 1st mortgage settled for about 30% of the balance but 2nd mortgage(Wells Fargo) charged-off the 25K HELOC balance. So instead of a foreclosure, I'm left with a settlement and a charge-off on credit. I do understand that both a settlement and a charge-off both negatively affect my credit, but that was just the lesser of two evils I guess..
I would like to try to settle this HELOC charge-off as soon as possible but I'm not sure how to proceed. Since this charge-off occurred within the last few weeks I know I am definitely within the SOL. However, I figured they will come after me sooner or later so it might make sense to try and take care of this now. Right now the Recovery Dept. of Wells Fargo(OC) HELOC has the account as per the terms of the short sale. As far as being able to do PIF, I can probably make-up/borrow enough money to settle for around 50% of the balance (which I "think" they would take but not 100% sure).
Here are my questions/concerns:
1) Is it better for me to approach them 1st about a settlement? Or wait for them to offer me something in writing?
2) In my situation, is it still best to only communicate with them in writing and NOT over the phone?
3) Would I still need to ask for a DV since the debt is still with the OC?
4) Since I'm only about settle for about 50% of the balance, what is the best case scenerio I should be seeking as far as what is reported on my credit?
Should I ask for the charge-off to be removed and replace with "settled to our full satisfaction"? Or is there a even better possible outcome? I dont even think the charge-off has made it to my credit yet, I know its definitely on the way
5) When negoiating a settlement, should I offer that 50% from the start, or work my way up to that point?
6) What is the best way to go about getting the specific mailing address for the Wells Fargo HELOC Recovery dept? I do have a fax number for them but they said they the only thing they accept in the mail are payments (which I figured is a lie).
I'm pretty new to this world of charge-offs and settlements so any help would be appreciated. Thanks.
Thanks for your response and advice. So far I've spoken to the HELOC recovery dept once and they told me they would be willing to settle for 80% of the debt OR PIF spread over 10 years at 0%. I did get the feeling that they would probably settle for less that 80% (even with such a new HELOC charge-off) if I put forward I strong enough settlement offer. So at this point I'm planning on trying to together some funds and sending them an offer in the mail(or by fax, phone..not sure) to settle the debt for 30-50% depending on how much money I can source.
The recovery dept did try to get me to make a "good faith payment" in the meantime so that my account isnt sent over to the legal dept. Supposibly, charged off HELOC with no payment activity after 60 days are sent over to the legal dept where I guess they decide if they are going to sue you or just sell off your debt to a CA. I was told that a minimal payment of say $75 would keep my account within the recovery dept until we can both agree on a settlement. I'm just not sure if making these "good faith payment" are a good idea
PS. Is getting a lawyer involved at this point a good idea? Or, would that just be one more person I need to pay for something I can do myself? 
hmmmm