Settling 2nd Mortgage

[tonto]

I am in the process of a chapter 7 bankruptcy. I wanted to inquire about the chances of settling a 2nd mortgage (HELOC) after my debts are discharged.

The home info is as follows:
1st Mortgage: $132k, acquired in 2003
2nd mortgage: $240k, acquired in 2005
Approximate home value: $190k to $250k

Home value X 70-85% = recoup from sale - $168k
- legal fees - guess about $8k
-back taxes
-Sr lien holders - $132k
-------------------------
$28k Recoup - Assuming $240k house value & 30% recoup

The mortgage company is GMAC for the 1st & 2nd mortgage. However GMAC sold the 2nd mortgage to the Bank of New York Mellon(BNYM) in Oct of 2009 but GMAC continues to service the 2nd mortgage.

My plan is to reaffirm the 1st mortgage and not reaffirm the 2nd.

1. What are the chances that GMAC-BNYM (2nd mortgage) might foreclose on me?
2. What is the likelyhood and chances of GAMC settling with me on the 2nd mortgage?
3. If Settlement was a valid option, what would be a likely settlement, ie % of balance?

[justbroke]

1. What are the chances that GMAC-BNYM (2nd mortgage) might foreclose on me?

High.

2. What is the likelyhood and chances of GAMC settling with me on the 2nd mortgage?

Medium to Low. You'd be paying a LOT!

3. If Settlement was a valid option, what would be a likely settlement, ie % of balance?

They'd probably want the difference between the first lien and market value... if they are smart. I don't see any settlement since the home is worth more than the value of the first mortgage.

However, you never know. They may be in the mood to settle for something. Most people who settle are in a position where the senior lienholder(s) is wholly unsecured and has security at all.

[HHM]

Also, unless you file BK to discharge your personal liability on the mortgage, the chance of settlement is even lower.

[tonto]

Settling 2nd Mortgage - Reaffirmation

HHM

Are you indicating that I should not reaffirm both the 1st or 2nd mortgage or just the 2nd mortgage.

Thx

[HHM]

You should NOT reaffirm any of them. But if you "must" reaffirm for some reason (I can't think of a reason), then only reaffirm the 1st.

[tonto]

Settling 2nd Mortgage - Reaffirmation

Assuming the scenario that I don't reaffirm any of the mortgage loans, how would I have to answer/respond to the Trustee's letter titled "Statements Regarding Secured Consumer Debt". The trustees letter provides the following 4 options:
1. Surrender to the appropriate secured creditor
2. Reaffirm
3. Redeem
4. Payments are current

or should I not answer the letter.

Thx for great advice