Chapter 13 and Loss Mitigation?

[Chop]

I filed Chapter 13 a few weeks ago...I have a second mortgage with Nationstar that we're trying to Lien Strip. I just received mail from Nationstar about "Loss Mitigation"? Sound like they want me to make some arrangement to keep the loan? I forwarded it to my lawyer, waiting for an answer.
Has anyone had success stripping a second mortgage with Nationstar?

[justbroke]

Do not worry about their letter for an arrangement. If you qualify for a lien strip, then they have no power over the Court granting an order to strip the lien of Nationstar. It's just a form letter for sure.

It is not up to Nationstar or any other bank (mortgage lender) to really defeat a lien strip motion. The only thing they could argue, and others have, is that you actually do have equity over the value of the more senior mortgage. For a lien strip to work, your appraisal must show that you are in fact underwater when it comes to the senior mortgage and that there is not $1 of equity for the mortgage being stripped. Suppose your home is valued at $200K today. You purchased using an 80/20 loan back in 2006 and the total of the loans were $300K. The first loan was for $240K and the second for $60K. If the "balance" on that first loan is more than $200K then you would be entitled to strip that second mortgage (of $60K). However, if that first loan balance was $199,999.00 then you would not be able to strip because the second enjoys limited equity of $1.

The key is in the appraisal and the balance on the senior (first) mortgage. It goes by the balance and not what you borrowed. If you are in arrears on the first mortgage, that typically helps put the second mortgage further without equity.

Any other questions?

[Chop]

Thanks Justbroke...my first mortgage owed is $121k and the house is valued at $107K

[justbroke]

Chop perfect!

[Chop]

The only thing that worries me is, the county appraised my house for $107K, but homes just like mine are selling for $126K in my development. I hope they stick with the county appraiser's assessment. My lawyer says that the county usually low balls on their appraisals

[justbroke]

Chop valuation is important and it will really come down to a.) how close the value is to the balance, and b.) how much Nationstar will squawk about the valuation. This is the reason that when I did my lien strip, I hired a licensed appraiser to perform an appraisal and to submit the appraisal on the standard appraisal forms. My appraiser was also willing to testify if it came down to a hearing on the valuation. Just printing the valuation of the county from a website isn't really good evidence of value, but, again, it will usually come down to whether the bank (Nationstar) objects to your motion to strip and if it goes to trial (evidentiary hearing).

[Chop]

Just received a letter that the 2nd mortgage company failed to appear or plead their case...default was ordered against Nationstar. Has the lein been stripped?

[LadyInTheRed]

Just received a letter that the 2nd mortgage company failed to appear or plead their case...default was ordered against Nationstar. Has the lein been stripped?

Chop, you asked the same question in another thread. Please do not ask the same question twice. It causes confusion when answers start getting posted in more than one place. I'm going to close this thread to avoid that confusion.