Lien Strip

[jwmc1]

I will be meeting with two attorneys on Friday to discuss my situation. Based on everything I have read I will be filing for Chapter 13. I live in Michigan and the housing values in my area have collapsed (to say the least). I have a first mortgage with a balance of roughly $180,000 and a second mortgage for about $90,000. I would be very luck to sell my house for $175,000 so I am going to ask my lawyer to look at stripping the second lien.

I was wondering how this went for others or if anyone else is currently going through this in their Chapter 13? How contentious can this get with the creditor? How hard will they fight this you think? I plan to have an appraisal done as well as get a listing of sales in the last year or so in my neighborhood.

Thanks all!!!!

[rfassett]

I was in a similiar situation with the numbers, for what it is worth, about half of what you are stating. I secured an appraisal. My attorney filed an adversarial petition on the second and we won by default. The lender never responded to the case. That may not be the case with your higher numbers though. I reasoned that the lender did not respond because it had bigger fish to fry - but that is only a guess. Also, my appraisal came in at about 55% of what I owed on the first. I was shocked. You might be as well. Anyway - good luck!

[jwmc1]

Did you tell the appraiser why you were getting the appraisal done?

[getmeouttahere]

Did you tell the appraiser why you were getting the appraisal done?

Also from Michigan here. When we had our appraisal done, the lady came right out and asked me "are you filing BK?" I was shocked she had asked, but told her our story. She went on to tell me her story and that she had filed also some years back.

Regarding the lein strip, we also filed an adversary petition on the 2nd and won by default. Never heard a peep from the 2nd. It has since been moved to "unsecured" and will only be paid a percentage along with the other creditors - when we successfully complete our 5 year plan.

One more thing, it may take you longer to get confirmed if your stripping the 2nd. AND in Michigan your plan doesn't start until confirmation. For example, we filed in December 08, confirmed in April 09. Even though we started making our payments in January, our 60 months actually started in April.

Which district are you filing in? Good Luck and let us know how it goes.

[jwmc1]

Also from Michigan here. When we had our appraisal done, the lady came right out and asked me "are you filing BK?" I was shocked she had asked, but told her our story. She went on to tell me her story and that she had filed also some years back.

Regarding the lein strip, we also filed an adversary petition on the 2nd and won by default. Never heard a peep from the 2nd. It has since been moved to "unsecured" and will only be paid a percentage along with the other creditors - when we successfully complete our 5 year plan.

One more thing, it may take you longer to get confirmed if your stripping the 2nd. AND in Michigan your plan doesn't start until confirmation. For example, we filed in December 08, confirmed in April 09. Even though we started making our payments in January, our 60 months actually started in April.

Which district are you filing in? Good Luck and let us know how it goes.

So, did the payment before comfirmation count toward the 60 payments you needed to make?

I am filing in the Eastern District, I think in Flint...how bout you?

[getmeouttahere]

So, did the payment before comfirmation count toward the 60 payments you needed to make?

I am filing in the Eastern District, I think in Flint...how bout you?

From what I understand, no, the extra payments didn't count towards my 60 mos. Very disheartning, I know. We are also Eastern District (Detroit).

[jwmc1]

So how were those payment applied then?

[getmeouttahere]

I'm assuming they were added to the "pool" to pay the creditors. My attorney fees were also paid through the plan, so I'd like to think they used that $ to pay him since he was the 1st one paid (he is now paid in full through the plan).

[jwmc1]

I absolutely need to get rid of this second mortgage...there is no way there is enough value to even come close to my first mortgage balance. Is one appraisal enough, or should I have a couple? Or should I get both a realtor and an appraiser to weigh in on the value?

[rfassett]

Sorry I had not checked back in. The appraiser asked what I needed the appraisal for and I told him. Appraisers are no dumbies. There are very few reasons to request an appraisal. So they can narrow it down pretty quick. Besides, my appraiser said he needed to know the need for the appraisal so he could factor that into the scope of his work, ie, who would be using the appraisal and for what purpose. I actually had two properties. The one previously described from which the lien was stripped. And another that we rescued from sherrifs sale that we were able to cram down the mortgage to the amount that the appraiser said it was worth - about 30% of what the mortgage was.

When I went looking for an appraiser, I looked for one that had been around a long, long time and whose reputation was solid. I did not want to give the court any reason to question the numbers. I see no reason why you need anything other than the appraisal. The appraiser is a professional and his opinion is treated as such in the court.

getmeouttahere, I would ask the attorney about that payment thing. I would be quite surprised if your understanding is correct. You would, in essence, have a plan that was five years plus and I do not think the law allows that. Just my thoughts.