2nd Mortgage Question

[Zrew]

Hi all, first time posting here. I looked through stickies and tried to search, but didn't find an answer for my question.

I just went through chapter 7 bankruptcy and my debt has been discharged. I didn't do a reaffirmation agreement with either of my mortgages. I am current on my primary mortgage(thanks to a loan modification) and about 4 months behind on my 2nd.

The question I have is now that my debt has been discharged and since I didn't do a reaffirmation agreement do i still have to pay on my 2nd mortgage or can they take my house?

[Calthius]

Yes if you don't pay the second Mortgage they would be able to foreclose.

[StartingOver08]

Well, they can foreclose, but will they? That is the issue. What is the value of your home (actual value, not zillow or any of the automated valuation models)?

How much is your first? How much is your second? With this information we may be able to help you with a course of action.

[car67]

Same thing here

House is worth $388k
First is $280k
Second is $65k

Just converted from a 13 to a 7
Just spoke to my mortgage firm they service
both loans......... I paid my first and asked the
lady in the mortgage office what happens if
I pay the first and not second... What is she
seeing across the board as my mortgage firm is
Option One.... She said people were paying the
first but not the second and since not reaffirmed
they are writing off the seconds in general.

So I smiled and payed my first and called my attorney
to see what the general view was.. They said technically they can forclose
but none has foreclosed yet and everyone is skipping the 2nd coming out the
Chapt and the Judge wont even reaffirm the seconds anyways the attorney said.. I am happy I now like my adjustable loan IT ADJUSTED just fine

[car67]

House is worth 388k according to Zillow but the value is less with current market conditions and can be addressed with a certified appraisal

[HHM]

This blog should address your questions

http://askmethner.com/?p=450

[justplaintired]

I find all this very interesting. We have a second mortgage, current on it and on first. Neither were reaffirmed. We plan on remaining current. I would dearly love to get out from under the 2nd, but not at the expense of losing our home. I am afraid to call and ask the 2nd to work with us on a reduced rate or a modification, but I don't even know where begin.

[albacore44]

I find all this very interesting. We have a second mortgage, current on it and on first. Neither were reaffirmed. We plan on remaining current. I would dearly love to get out from under the 2nd, but not at the expense of losing our home. I am afraid to call and ask the 2nd to work with us on a reduced rate or a modification, but I don't even know where begin.

I know it sounds like a scary thing to do. I assume your through your ch-7. my plan it to stop paying after my 341/or discharge, and hope they send to a JDB. in the mean time i'll bank the $$ payments i would normally send toward a settlement. Should the decide to settle, i'll have that $$ to put to the settlement. should it backfire and they move to forclose, then you have the $$ saved to pay and catch up. not a fool proof plan, but at least a plan

[StartingOver08]

I know it sounds like a scary thing to do. I assume your through your ch-7. my plan it to stop paying after my 341/or discharge, and hope they send to a JDB. in the mean time i'll bank the $$ payments i would normally send toward a settlement. Should the decide to settle, i'll have that $$ to put to the settlement. should it backfire and they move to forclose, then you have the $$ saved to pay and catch up. not a fool proof plan, but at least a plan

This sounds like a great plan. FWIW, just make sure the servicer of the 2nd does not have access to the funds. I know you know that the Ch 7 discharge wouldn't allow the servicer to touch the funds, but its better to be cautious. For example: EMC Mortgage is owned by Chase - so I would not keep the funds in a Chase account.

[Zrew]

Thanks everyone for the responses. I tried to use Zillow to find the value of my house and if I'm using the right number its about 65,900.

Primary Mortgage = 55,904
Secondary Mortgage = about 22,000

I'm going to have to look into that website you mentioned HHM.

[mmenz22779]

I am in the same boat execpt my 2nd is already a lien agaist the house.

Yes they can forclose at anytime but they would be stupid to becase the valuse is less so even if the 2nd did forclose they would still get nothing.

The lien will stay on the house forever. the nice thing is you can walkaway at anytime during the loan and be protected. Just never refince that loan. It is only the original loan that is protected.

We will pay on the 1st (loan mod) until we save up enough money then maybe move or have someone buy our house through a short sale.

[StartingOver08]

If you do like Relief did - save enough to pay off the second at 12 cents on the dollar AND have the 2nd remove the lien when you make the payment, then you don't have to worry about the 2nd. It is highly unlikely for the second to try to foreclose, unless it is much larger than the first (rare).

[Ann]

Real confused here... I was told you have to be current on both mortgages to be able to file a chapter 7 so why was this person discharged from the 7 when they were 4 months behind on the payments??? Am I missing something here?

[liboton21]

What about if both lender own the 1st and 2nd?

[Zrew]

Real confused here... I was told you have to be current on both mortgages to be able to file a chapter 7 so why was this person discharged from the 7 when they were 4 months behind on the payments??? Am I missing something here?

I'm not sure if it is different in different states, but I was not required to be current on my mortgage to file chapter 7. I just ran the risk of my mortgage company foreclosing after bankruptcy. I went through a loan modification with my primary mortgage company to bring the loan current, but I did not do a reaffirmation agreement with either.