Creditor disputing lein strip

[whiscox]

I was very excited as we were getting close to confirmation hearing and just got a curve thrown at me which has me very worried. We had filed for our second mortgage to be stripped as our home is very much underwater at this point (based on tax assessments nearly $130,000). We originally did not have an appraisal done on the advice of our attorney because he said it was a waste of money as in all likelyhood the creditor would not dispute the claim because it was such a large gap, and it would only be necessary if they disputed the claim.

As I should have guessed would be the case they have disputed the claim. We now have an appraisal which shows that our claim was valid, and will be submitting it hopefully very soon. What I am concerned about is what happens now? Can they get an appraisal from someone who works for them that shows something different? I am fairly confident that they have no basis to say we have equity in the home, but if there is one thing I have learned through this process is that things don't always have to make sense and I am worried this whole thing is going to blow up in our faces. Any advice is greatly appreciated!

[lrprn]

Take a deep breath and relax. If you are truly underwater $130K, the house is worth less than the amount owed on your first mortgage, and that your true current home value was confirmed by a professional appraiser, then showing that proof to the court is 99% likely to be the end of it.

Let's say your lender is one of those really stupid ones and they decide to they will continue to pursue this. First, they have to prove the house is worth what they say it is (not likely if you are truly $130K underwater.) And second, even if they use a "crooked" appraiser, all you have to do is ask a local real estate agent to pull all comparable home sales from your neighborhood from the last six months. My guess is that the comparables will be a second source of truth that proves your property is worth what your appraiser says it's worth (the comparables might even show your house is worth less than your appraiser thinks it's worth).

The comparables documentation very likely won't be needed, but you'll feel better having something to do while this winds its way through the slow court process until it is finally resolved Hang in there!

[LadyInTheRed]

Never mind. lrprn covered it.

[Nanzee]

Our second also disputed the strip. Our attorney told us they probably would, and that they would lose - they did, and they did, lol. I am sure you will end up okay, but I know, the extra stress sucks.