Who here has settled a 2nd after a ch7?

[mmertens67]

Please post the contact details, some of us might need it.

Here's the link to the Web site that lists the contact info that I used for Bank of America. I contacted Cynthia. There is a lot of contact info here for many banks/mortgage companies. Hope this helps!

http://getoutofdebt.org/5003/mortgage-lender-list-of-loss-mitigation-contacts-that-can-help-you-avoid-foreclosure

[spidge]

One loophole in some of the info here is that in order to file a ch 7 and not loose your home you must be current on all mortgages. So is it recommended to become current, file the ch 7(do not re-affirm the 2nd), then default, and finally settle with 2nd lienholder.
Or, as is implied here, is to file ch 7 reguardless of ones status with the 2nd and settle after discharge.
Clarity please.

[Mensa1]

file the ch 7(do not re-affirm the 2nd), then default, and finally settle with 2nd lienholder.

By this statement of not reaffirming the 2nd you imply that one should reaffirm the 1st mtg/dot. I disagree. One should (almost) never reaffirm any mtg/dot.

The exception might be in the 11th Circuit, (FL, AL, GA), where case law is rather hard and fast regarding reaffirmation. In that circuit one could either elect to reaffirm or surrender, and do neither by not following thru on the reaffirmation or continuing to pay current if you elected surrender. Others here in the 11th have more experience and opinions that are relevant there.

In my case, I am in the 7th Circuit Court and Atty told me flat out that pass thru would not fly; I said we would see. Had a straight up convo with the TT about it in the 341 and there was absolutely no issue with pass thru on the 1st mtg. While it may vary as to your TT, (granted things should be more consistent but they aren't), you can't always believe everything that your Bk Atty tells you either.

[justbroke]

The exception might be in the 11th Circuit, (FL, AL, GA), where case law is rather hard and fast regarding reaffirmation. In that circuit one could either elect to reaffirm or surrender, and do neither by not following thru on the reaffirmation or continuing to pay current if you elected surrender.

Yes, that is all good. The technical aspect is that in the 11th, you must redeem, reaffirm or surrender. There is no "retain and pay" (or "pay and stay"). However, it is up to the Creditor to enforce it.

Many debtors select surrender but continue to pay and stay. However, a very recent case in Florida had the creditor complaining that the debtor didn't follow through with their intention, and the Court forced the debtor to reaffirm or surrender. The debtor chose to reaffirm the mortgage.

As with many aspects of asset planning in bankruptcy, strategy is important. Knowing what works and doesn't work in your particular district is important to know. As Mensa points out, some BK attorney are ultra-conservative and always take the more conservative approach.

[pcn]

AL here, and 8 days away from discharge, we hope. We selected "reaffirm" but did not sign the papers that were sent to our atty. It remains to be seen if the 1st will squeal (2nd is BOA). It may help that they are based in MS and we are in AL.

[BCA2009]

I'm in the 11th circuit. Tomorrow will be day 60 . I never received a re-aff form from my first or second, so it wasn't even an issue. (BOA first and Chase 2nd).

Just out of curiousity, do most banks send out the paper work or do you have to request it?

I never intended to re-affirm the house, but I did sign and give my attorney a re-aff for one of my cars. It was to Honda finance. Where on Pacer would I see where the bank submitted it? We gave it to our attorney about 4 weeks ago but haven't see anything about it on the docket information on pacer.

I hope this doesn't become a problem, every thing else has been very smooth inour case.

[Moneypenny]

Am I a candidate for post BK7 Heloc settlement with BoA?

1st (not BoA) owe 225K on a house valued at 243K on cyberhomes
2nd BoA, 3rd BoA 75K line of credit later split into line of credit 40K and installment loan 35K

I am also confused about reaffirmation in general. Any thread that would be good for me? I am wondering what the consequences of not reaffirming your 1st mortgage are if the value of the house rises and there is significant equity.

thanks,

MMP

[Mensa1]

I am wondering what the consequences of not reaffirming your 1st mortgage are if the value of the house rises and there is significant equity.

thanks,

MMP

NO consequences. You own the house just the same as if you had reaffirmed, no difference there. The only difference is that creditor will show the mtg as included in Bk, and no longer report payments to CRA, good or bad.

Bottom line is, the price of reaffirmation is a big price to pay for the lender reporting a trade line. If you want positive TL get a cc or other revolving acct and build from there. The downside of reffirming can be substantial if you run into any rough period financially going fwd. Just not worth reaffirming the mtg.
__________________________________________________ ________

PS. Let me add one thing here... the 2nd and the 3rd are still going to have their lien in place and if you don't settle with them they could always foreclose. So it is a bit of a balancing act; one not being too anxious or too soon attempting to settle, or two being too complacent and the mkt rebounds and you lose some bargaining power if prices are rising (although I think we are a far cry from that happening).

[Moneypenny]

thanks that clarifies things.

your ps was different than the first thing you said, right? In the ps you were talking about settling and intentionally not paying the 2nd and 3rd in order to set the stage for that. in the first part of your message, you were talking about staying current, right?

[scla]

Although lump sump settlements for 2nd mortgage are few, I have seen a few clients successfully negotiate a lump sump settlement for a 2nd mortgage or HELOC. In my view being able to negotiate such a settlement will depend heavily on the bank that holds this note and whether they are open to this type of settlement.

[Mensa1]

thanks that clarifies things.

your ps was different than the first thing you said, right? In the ps you were talking about settling and intentionally not paying the 2nd and 3rd in order to set the stage for that. in the first part of your message, you were talking about staying current, right?

The first part was theory and the ps was more practical, in that the jr liens will still need to be dealt with in the future. I was and am assuming that your plan is NOT to continue to pay the 2nd and 3rd mtg liens, right? In doing so, and after disch of Ch 7 Bk, you have set them up for settlement negotiations.

As stated by the other poster, there is no guarantee that they will settle, but the only place they have to look for repayment is against the property since their debt has been discharged. It comes down to what is feasible and practical here; some will sell of the paper before settling, some won't. Even if it sold to a new entity, and maybe the is the most plausible and beneficial since you didn't default on that entity, then the new entity (JDB) is usually interested in converting the paper to cash at a profit. Aka lump sum settlement for less. Yes, it is a crap-shoot on settling jr liens but unlikely that they are going to foreclose since that only adds insult to their injury if they are not in an equity position. Times will be interesting going forward because you will have lots of company having a defaulted jr mtg that is out of the money.

[Moneypenny]

thanks that clarifies things. I think my plan is still to be current on 2nd and 3rd unless i get some idea that its possible to settle. then of course i would need some money!

But I do see that at least its possible. Probably we will have to see how things are trending around here and with BoA. If property values dive some more then I assume settlement is an option.

thanks,

MMP

[Mensa1]

thanks that clarifies things. I think my plan is still to be current on 2nd and 3rd unless i get some idea that its possible to settle. then of course i would need some money!

But I do see that at least its possible. Probably we will have to see how things are trending around here and with BoA. If property values dive some more then I assume settlement is an option.

thanks,

MMP

Trying to settle a 2nd or 3rd mtg for less, while continuing to pay it current is about like trying to go swimming without getting wet. Not happening.

[Moneypenny]

no, that's not what I was saying. I was saying I am not going to stop paying my 2nd or 3rd until I have some money to settle with and I have some idea that a settlement is possible (such as further dip in the housing prices). If I dont have money to settle, and BoA is not settling anyway, then if I dont pay my 2nd and 3rd, what would happen?

[spidge]

Good question. I have not paid BofA full payments since December 2008 and they still are not talking settlement. I did do the trial payments about six months ago but they never did anything to assist me so I suspended payments agian. No calls of any kind since, not even from a junk debt collector. I have yet to file and prefer to file a 7 but with the 2nd in the current state I don't think it is possible. I would think I would need to file a 13.