second mortgage! help!

[carlos74]

I filed chapter 7 and was discharged in 2007. I had a 30 year fixed mortgage for 110,000 and a second variable rate of 32,000 from Suntrust. The problem is that my lawyer forgot to reafirm the second mortgage and They are not sending me bills since 2007. This second mortgage does not show on my credit report as a debt either. They told me that I will have to call them every month to know how much I will have to pay a month for this second mortgage.
How can I fix this issue? If I stop paying the second mortgage will they foreclose my home?

[justbroke]

They told me that I will have to call them every month to know how much I will have to pay a month for this second mortgage. How can I fix this issue?

You can't "fix" this issue. You do not OWE them any money. Therefore they are precluded by law from billing you. However the discharge received in bankruptcy does not prohibit a debtor from paying on a discharged debt.

If I stop paying the second mortgage will they foreclose my home?

Yes, they could... especially if there is enough equity above the balance of the first mortgage, that would yield them some return. If you owe more on your first mortgage than the home is worth, then the foreclosure is unlikely but still a possibility (based on various factors).

You should be thanking your attorney for making this mistake. Unless you had equity over both mortgage balances (combined) at the time of discharge, then maybe it wasn't a great mistake, but still... it doesn't affect you. However, if you were underwater... it's a great gift.

[carlos74]

Thanks!

Thanks so much for reply.
Ok,
My first mortgage balance is 108,000 and my actual townhome value is around 135,000. I paid 144,000 when I bought it back in 2006. They could make around 20,000 if they sell my home. I don't know if it will be worth to them to forclose my home for that amount of equity. Also, If I stop paying that second mortgage, is there a way they can put negative feedback on my credit? I've been sucessfull rebuilding my credit and don't want to hurt that.
Muchas gracias!

[SMinGA]

If your value estimate is accurate - then they have motivation to foreclose if you choose to stop paying it. There is equity.

They can't report any negative information - because you don't owe them. But they still have the security interest in the property so nonpayment carries consequences.

[BCA2009]

Thanks so much for reply.
Ok,
My first mortgage balance is 108,000 and my actual townhome value is around 135,000. I paid 144,000 when I bought it back in 2006. They could make around 20,000 if they sell my home. I don't know if it will be worth to them to forclose my home for that amount of equity. Also, If I stop paying that second mortgage, is there a way they can put negative feedback on my credit? I've been sucessfull rebuilding my credit and don't want to hurt that.
Muchas gracias!

If I understood correctly your first is $108 and you have a second of $32. You said you re-affirmed the first so they won't foreclose unless you stop paying them. And if they did they can only get the amount you owe them ($108). The second would get the rest. Your second could foreclose but they would have to pay off the first and legal fees and real estate commision, etc.

If you home sold for $135 the second would be lucky to get 10K out of the deal. Maybe nothing depending on how mcuh it cost to foreclose in your state.

There are no guarantees on what a bank will do, but the second probably would not be in a big hurry to foreclose on that small amount.

But again, you have to be willing to take the risk.

As SMinGA says once you have been discharged (and didn't re-affirm) the bank cannot report missed payments. You don't owe the debt anymore, so there is nothing to report.

[carlos74]

Guys,
Ok, the loan does show on my credit report, but shows last updated in 2006. It shows no terms. How can it shows on my report if it has not been reafirmed?...I'm very confused now...sorry about the missunderstanding! please help me understand this mess!

Gracias

[carlos74]

I have been trying to refinance with them but my home will have to be appraised at 147000, that's because all fees after closing, then I asked the loan officer to do a refi-modification and he told me I do not qualify without explaining why. Then I asked to told him I knew we owed them more that what the home value was and that my loan is owned by Freddy Mac. Then he said that "my original loan was a reduced documentation loan……unfortunately these loans aren’t eligible"

[BCA2009]

Guys,
Ok, the loan does show on my credit report, but shows last updated in 2006. It shows no terms. How can it shows on my report if it has not been reafirmed?...I'm very confused now...sorry about the missunderstanding! please help me understand this mess!

Gracias

Nothing on your credit report should change at all.

But if there is a foreclosure on a property you own. The only way for the deed/title to come out of your name is for it to be recorded at your county courthouse. Those records are searchable if you go to the county website (in most places). But they have nothing to do with your credit report.

[carlos74]

I wonder how many months will take them to start a foreclosure after I stop paying that second loan. Will they let me know?

[BCA2009]

I wonder how many months will take them to start a foreclosure after I stop paying that second loan. Will they let me know?

Hard to guess. It would depend on how much it costs to foreclose in your state. If your second is only 32K, by the time the bank paid legal fees, insurance, taxes and upkeep after the foreclosure, Real estate commission to sell it. etc. The bank may decide it is not worth it to foreclose (at least for a long time). Or they may do it immediately based on some other rationale.

Totally a guess, but I bet it would be a year or longer.

I bet they won't let you know, because nobody you talk to will actually know. Plus they want you to keep making payments, so if they tell you anything, they would say a shorter time than it would actually take.

These are just guesses, you have to be prepared for any outcome if you do decide to stop making payments.

[carlos74]

So let's say they don't try to foreclose me and in three years I sell the house. Can they still come after me for the difference?

[BCA2009]

So let's say they don't try to foreclose me and in three years I sell the house. Can they still come after me for the difference?

Because you were discharged in chap 7 and didn't re-affirm the second, they can never come after you for the difference on the second if they foreclose. But if you ever want to sell, you will have to either pay both notes (1st & 2nd) or get them to agree to a short sell.

But there is no reason to sell it unless there is enough equity in it for you to pay both notes off and make a profit. You can just walk away anytime if there is enough equity to satisfy the first. If you had not re-affirmed the first, you would have nothing to worry about, but since you did, you need to make sure they (the first) get paid, but don't worry about the second.

Are you absolutely sure the first was re-affirmed? Have you looked at PACER?
Just because the first continued to send you statements, doesn't mean it was re-affirmed. I would double check that.

[carlos74]

Ok, I'm on Pacer right now but can't find a way to find if my first mortgage was reafirmed...any help will be appreciated.

[justbroke]

Just search (Query) for your case. Once the case screen comes up with all the links, just click " History/Documents". Take the defaults on the next screen and click the "Run Query" button.

Just look for a docket entry (document) titled Reaffirmation. If you see any of those, then at lease one reaffirmation was filed.

[carlos74]

Thanks so much, looks like the only thing reafirmed was my car's debt. There is nothing there that shows mortgages or titles. Although it looks like my first mortgage still reporting to credit companies and they bill me every month. I really don't want to lose the townhome but I think I will be forced to stop making payments on the second one. Hopefully they don't try to forclose me. What makes me nervous is that both loans are with the same bank (suntrust) advise please!