What will happen to my house?

[MrsDixon]

I filed a Chapter 7 10/2008. I didn't reaffirm on my house, I just kept making the payments.

I have an FHA loan w/ balance of $178K
I have a 2nd mortgage w/ $36K balance.

My house it probably only worth $165-$170 now. According to Zillow it's around $150K

What happens if I stop paying the 2nd mortgage?

TIA

[dspii]

That's a tough one. On one hand, you can walk away from your house and not owe any money on difference between what the house sells for and the value of the notes.

If both mortgages are with the same company, you may be able to negotiate it, but if it's with a different company, there is no reason for them not to let it foreclose and try to get some money.

If you stop payments, you risk the house going to foreclosure to satify the second mortgage, even though your first takes priority on the proceeds. If your $64,000 underwater, you may want to consider walking away. Just my opinion, but I see the market taking decades to return that kind of value to your home.

[Flamingo]

I look at it this way; since you filed Chapter 7 in 2008 and can afford the house payment, keeping the house is in your best interest because there is no guarantee in the years to come if you want another house that you will be able to get one. If you let the house go, you will just have to go rent somewhere paying rent for something that is not yours. You will have to figure out if you want to keep your house and can afford to keep your house or pay rent to someone else for use of their property.

Best of luck to you.