Please someone - I am terrified

[AngelinaCat]

Hi LOLA: I merged your two threads into one located in the Chapter 7 forum, since that is the Chapter you are planning for, and is the thread that has gotten the most attention. Please don't make duplicate threads as trying to keep up with the postings to more than one thread becomes problematic.

As for the situation, I think you will be fine. You are working with an attorney anyway, so make sure that he/she knows the situation.

There is not one of us, lendee or lender that has NOT made a mistake. Several years ago, before 'Hub and I were able to pay off our mortgae, we refinanced. The lender's representative made several mistakes, but the most glaring one was attaching the mortgage to the wrong parcel of land. Had we not caught that--because she already cued us in to the fact that she was 'error prone'--the collateral for the mortgage would have been the family CEMETERY, not our homestead!

It would have been entertaining had we defaulted and they tried to foreclose on a cemetery......

[LuciluS]

IF you already had a 2nd mortgage on your home when you applied for your HELOC and forgot to list the 2nd mortgage.....I don't think it is a problem. Just make sure you list all 3 in your BK petition.

The bank you got your HELOC through would have pulled a Credit Report (required) and would have seen the 2nd mortgage on your report. So you forgot to list it, that bank would have known by the Credit Report.

Hard to do, but this is really minute when it comes to your Bankruptcy petition. Nothing to worry about. Get the awful thoughts out of you Mind/Brain and use such to carry on thru your bankruptcy.

Trust me, we've been on this BK route since late last Sept. and will be filing this Sept. If you let your money problems, etc. overload your brain, it will cause mental and physical problems. Try to look at your BK as a 'Fresh Start'.

[Bex]

I have processed quite a few refis...

Lola:

I really have nothing new to add that other folks have not said already, but it sounds like you're spinning out of control and, hopefully, the more the merrier.

First and foremost, as other folks have mentioned, it is your intent that matters...that anyone (the lender) would have to prove in order for this to cause you any problems

Secondly, banks aren't generally in the habit of overlooking things like 2nd mortgages in the course of extending new credit...generally, if this kind of "mistake" were at all common, they would have busted years ago and we'd all be free and not even be here at this forum

I'm trying to imagine why your paperwork might not show the other loan...I suppose if your old 2nd agreed to become subordinate to the new HELOC, it might make the paperwork look that way? Not sure--I did a lot of loan processing but it's been 6 years or so--RAM has been dumped since then! At any rate, there are a LOT of places along the way to closing where this 2nd would be discovered including your credit report, analysis of your current expenses and title search. The whole underwriting process is designed to make sure the value of the collateral is there (as the borrower states) so they must ensure no other lender has gotten there first (or include that in decision-making)--regardless of what you state on the application. The bank does all this in underwriting because once the loan is "perfected" they are on the hook, no matter what.

IF the 2nd was truly not considered in granting your HELOC, again, they would have to prove that it was covered up intentionally and, given that the bank claims to have done due diligence and made a good loan, I think that would be a very VERY hard case, indeed! Show it to your attorney, my bet is s/he will either have an easy explanation or say something like "sucks to be them"

But in the meantime, just put it out of your head!

[kw1025]

This kind of thing is going on at every bank in this country. As long as you did nothing fraudulent to get your money, don't worry. most loans that have been fradulent are no doc loans, meaning you just have to state verbally the application, not provide any info really. Just tell the attorney your concerns.

[mynextlife]

Lola:

Banks are well prepared to handle situation in which information is left out whether it was intentional or not. They have credit reports, closing attorneys, title insurance companies, etc. to also make sure of any debts of record. It is not a problem....if asked simply say you forgot. The title insurance/closing atty is on the hook should something arise about the 2nd not being of record.

[music12]

LOLA, it is the bank's responsibility to make their forms clear enough that you would know where to put the 2nd. if they want to know, it was their responsibility to ask. there is no doubt you would have put it in the form if they asked.

you are not going to prison.

take that bubble bath.

[Lolabeagle]

Thanks to all of you SO MUCH. I am not looking for sympathy here, but in the last 3 years I have gone through so much. My Mother died, I got divorced, got remarried, had a baby (my only one at 44, I was told I couldn't have any) lost job then my home, and now bankruptcy. Talk about changes - good and bad and SO much stress. Oh, and between all that my daycare provider had to shut down because of molestation! Yes I am spinning out of control, I had myself more than convinced I was going to federal prison! I guess I am just waiting for the next bad thing to happen.

[justplaintired]

Well it seems that the mortgage co would have done a credit check wouldn't they? The loan, or any kind of secured loan would have shown on there would it not? So, if they skipped that step, that seems to me to be their mistake.

Try not to worry too much, it seems like it was a mistake on their part. Just talk to your attorney. I would imagine since you are not keeping the house, you should be fine. Frankly I know when we dealt with mortgage companies, they checked up up and down, side to side, nothing got past them. Your mortgage company dropped the ball.

[jribe]

I would NEVER do anything like that on purpose. If I did I wouldn't be in this forum. I know that they checked my credit report because they made me payoff a couple of credit cards with the loan.

if they checked your credit report- they saw the other loan. No biggie. It's also recorded and when they send the papers to your county to get recorded- again it would be there. Companies do title/lien searches also to verify this information ( i work at a bank) so you shouldn't have anything to worry about.

[aljohnson007]

Nothing to worry about. When I got two HELOCS from BofA, they didn't even ask about my income. Also, when they make a loan, it is their responsibility to do a title search which would reveal any outstanding loans.

[2manybills]

Not only that but remember when they record a lien against your property, they run a title search. They would have seen the 2nd mortgage.

As has been said, the only debtor's prison is the one we make for ourselves. No one is going to put you in jail.

[hereforinfo]

This kind of thing is going on at every bank in this country. As long as you did nothing fraudulent to get your money, don't worry. most loans that have been fradulent are no doc loans, meaning you just have to state verbally the application, not provide any info really. Just tell the attorney your concerns.

Actually, "no doc" loans still required you to put your financial information in writing and sign it, it's not verbal. They just don't verify the information, which left room for a lot of people to be dishonest.

To the original post, I wouldn't worry. Yes, you should have listed ALL mortgage information. You made a mistake, it happens. I doubt the bank is going to notice or pursue anything. They should/would have caught the second mortgage when and if they did a title search. There are so many real cases of intentional fraud for a lot more money out there, they have their hands full with that and aren't going to waste their time on something like this.