2nd mortgage payments

[rjl0206]

To all,


My house which I will be appraising soon MAY MOST LIKELY not under water enough to where it is lower than my first mortgage, keeping my 2nd mortgage( HELOC)as secured. two questions I would like to ask the board:

1.) My heloc is one of those where my only obligation for 7 years per month is the interest rate which is variable (4.9%this month). Before filing for bankruptcy would I or should I convert it to a loan and lock in the rate? my monthyl payment would then be around $750+/- per month with a locked in APR and principle for the next 5 years.

2.) If I do lock in with a $750 or so a month payment, BECAUSE it is still secured to my house what will that mean/do to my BK filing? Im already paying $3350 per month for mortgage and with that now $750 for my 2nd, if that puts me in the negative side of my DMI will they take my house away via chapter 7?


thanks all.

Ray

[catleg]

You may be able to cram down the HELOC. Most likely, in fact.

If your house is worth 400k
First 350k
HELOC 150k
Then the HELOC is 100k unsecured.
Did you adjust for sale expenses as well?

Doesn't matter if you convert or not.
In a 7 you wouldn't necessarily lose the house.(no equity to surrender)
But you can only cram down in a 13.

[chloe0724]

You can't cram down a mortgage on a primary in a 13, you can only lein strip.

[rjl0206]

wait? so you CAN cramm down or not cram down on the HELOC? it is interest only for now, I will be converting it to a locked rate before I file for BK.

Ray

[catleg]

better ask a real lawyer for now, probably ask several lawyers
i am looking for cases like that on pacer
i know the 1st can't be touched but hoping the 2nd can be

[catleg]

I realize now that I've probably been giving out/hinting at bad information regarding cram downs and the 2nd/heloc's. I should have read HHM's piece on lien stripping first. I've been reading chapter 13 cases in pacer and seeing the loans reported as secured and unsecured amounts, and then in the confirmation order there is a box checked that says the lien amounts of the secured creditors will be removed or adjusted per the plan, but apparently there is a lot more to it than that. Very sorry about that. I'm hoping to take advantage of such a thing if they pass it into law in the next few months, as usmccop as suggested. Might be worth waiting a little while if you're on the cusp to see how things change.