settled 2nd mortgage

[clevelandmom]

@ Scorpion: You seem to have forgotten one other thing my friend: Unemployment. My husband and I had a mortgage and bills to pay and could afford everything, until he got laid off. Welcome to America. Yes, we're all trying to live the dream. Just owning a house and 2 cars and raise a couple of kids is nowhere as easy as it used to be. But because this country realizes that sh!t happens, we have bankruptcy to help us. I am sure the vast majority of people on this board are filing bankruptcy because they HAVE to, not because they want to. Just remember that Capitalism without bankruptcy is like Christianity without Hell. You have to have one to balance the other.

[HHM]

So, kind of back on track here. In my case my wife only filed ch7 because most of the debt was in her name other than the mortgage and a home equity loan with the same bank as the mortgage bank. Our 2nd mortgage is also totally unsecured and we've been paying it on time because it's also in my name. Do we have options or any chance of trying to negotiate a settlement with them since I didn't file and it's the same bank as the mortgage bank?

You can try, but it's risky. Reason being, to motivate settlement at all, you will need to stop making payments on the 2nd mortgage, so your credit will be impacted. Also, you have less leverage because the bank can presumably come after you since you are still personally liable. If they actually settle, that personally liability is a moot issue, but you will have to deal with the tax consequences.

You will need to prepare for the contingency, that is, SAVE the payments you would have been making and set aside money so that if they say no, you can get back to even with them.

[msm859]

people bought homes they knew they could not afford,used interest only mortgages,bought rental properties thinking the housing market would only go up up up.got greedy

That is a pretty broad brush you are using. Although what you say did happen I actually suspect it would be the minority. And yes greed probably is the major force behind our current economic situation and continues to bring us down. The concentration of wealth in the few and greed of power causing all those in power to sell their soul to get/stay there. It is NOT bankruptcy -- that actually has biblical roots.

[albacore44]

people bought homes they knew they could not afford,used interest only mortgages, thinking the housing market would only go up up up.

Guilty

[nichole04]

Scorpion35-first of all, I did NOT walk away from my home. I am paying my first mortgage. I did not force the 2nd mortgages to settle. It was up to them to take my offers and they did. Secondly, part of this money was used to fund my business which failed because of the economic downturn. I did not forsee it coming when I opened my business in the height of the market. I did not friviously just use my home as a piggy bank to go on a huge shopping spree and party with! Everyone's circumstances on this forum are different and I never intended to end up in bankruptcy and I know that most people on here didn't as well. Prior to the economic collapse I always paid my bills on time and had a good credit score. Sometimes things happen that are beyond your control and that is what bankruptcy is there for. You shouldn't be so quick to judge people when you do not know all of the factors that contributed to them filing bankruptcy and since you had to file bk for your own reasons you really have no business getting on this forum and critizing others. Kind of hypocritical don't you think?

[calgirl67]

Guilty

I'm guilty too!

[IBroke]

they should make it illegal to just walk away from mortgages and auto loans
u should only be able to discharge credit card and medical debt
to much people taking advantage of this loophole
and everybody else that bought houses that could afford pays the price

Oh really? I thought that you share the opinion that after a BK without a reaffirmation, the bank owns the house anyway? So the bank owns the house and the former owner shouldn't be allowed to walk?

In this country, at least officially slavery is a thing of the past...

[csonly]

When you settle with second mortgages, do you have to claim the difference on your taxes as income?

[HHM]

When you settle with second mortgages, do you have to claim the difference on your taxes as income?

Not if you filed Bankruptcy.

[Freddy03]

Could this be done if the same company holds the first and second mortgage?

My second (HELOC) is about $12K I would love to settle with them after discharge.

Is that possible?

Good Job OP!!!!

[HHM]

Could this be done if the same company holds the first and second mortgage?

My second (HELOC) is about $12K I would love to settle with them after discharge.

Is that possible?

Good Job OP!!!!

Yes, it is possible. Even though the same company may be servicing the loan, odds are, the loans are backed by a different pool of investors, so different rules will apply. (unless the mortgage was through a Credit Union).

[Freddy03]

Yes, it is possible. Even though the same company may be servicing the loan, odds are, the loans are backed by a different pool of investors, so different rules will apply. (unless the mortgage was through a Credit Union).

Thanks! I'm going to look into it.

[iwentbk]

Thank you for sharing this info Nichole04. My situation is similar, and I welcome any comments. I have been discharged via chapter 7 for over a month now with a first and second mortgage with different lenders that were not reaffirmed. I've never been late on the first, and I'm now about 30 days late on the second. House value is maybe $135k, with the first mortgage balance currently at $115k and the second at $26k. I'd like to stay in the house and settle like you did and get rid of the second mortgage lien. Not terribly underwater, but do you think they will settle??

[HHM]

Thank you for sharing this info Nichole04. My situation is similar, and I welcome any comments. I have been discharged via chapter 7 for over a month now with a first and second mortgage with different lenders that were not reaffirmed. I've never been late on the first, and I'm now about 30 days late on the second. House value is maybe $135k, with the first mortgage balance currently at $115k and the second at $26k. I'd like to stay in the house and settle like you did and get rid of the second mortgage lien. Not terribly underwater, but do you think they will settle??

First, how much cash on hand do you actually have to settle. Do you have the money to do it (we are talking payments in lump sum here)?

Second, if by all accounts the home is worth $135K and your 1st mortgage is only $115,000, the 2nd mortgage does have an equity position in the house. If the home were sold for $135,000 and assuming roughly 8% in costs, the second would net $9,200. Might they settle, maybe? If the house is really worth $135,000 will you get a 5% or 10% settlement, probably not. Get a realtor to do a Current Market Analysis and get a better sense of your homes value. Also, keep in mind, the 2nd mortgage does have the legal right to foreclose, so you are gambling that they won't because of the financial circumstances, but it is not unheard of for a 2nd mortgage to start to foreclose.

[iwentbk]

Thanks HHM, it looks like I will stick to my original plan of riding though (yes, I know ride through was eliminated when the bk law changed, but both mortgage lenders said I can keep the property as long as I remain current). Has anyone ever had difficulty getting the 2nd mortgage to send statements after discharge? My 1st mortgage still sends them.

So, if I attempt to settle with the 2nd do I run the risk of foreclosure or otherwise jeopardize my current ride through situation? In other words does it hurt to ask, or should I let sleeping dogs lie?