I have a question about my second mortgage and can't seem to find the exact answer. The background is that my Chapter 7 was discharged back in '06 and at the time I did reaffirm my first mortgage, but not my second. Since then, I have never been as much as a day late on my second mortgage and actually refinaced my first mortgage at a much better rate and have never missed or been late. I am in the process of putting my home on the market and building a new home. What exactly is my responsibility on the 2nd mortgage? When I ran my credit report the other day it showed that my 2nd was discharged in the Chapter 7. If I don't sell the home for enough to satisfy both mortgages, which is a slight possibility, does the 2nd mortgage company still hold a lein on the property, or is just considered a loss to them since it was discharged? Any comments or ideas would be greatly appreciated!!
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To err is human. To really mess things up, you need a computer. -
The security lein was not discharged in bk-just your obligation to pay.
You're going to need to settle with the 2nd mortgage holder before you can sell your home. -
Thank you for your response. I have not missed any payments and don't plan on it. Not sure if I can call the 2nd mortgage company and thell them I am selling the house for less than the two mortgages and ask if they would like to settle now before I sell the house? I have heard that you need to skip some payments to effictively do this, but I have rebuilt my credit and don't want to screw anything up by doing this. I'm afraid they would just go ahead and try to foreclose and don't want the problems that will bring.Originally posted by keepmine View PostTo err is human. To really mess things up, you need a computer.Comment
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why are you planning on selling for less than is owed on your 1st and 2nd? You'll be on the hook for any deficiency to the 1st (if it sells for less than owed to them) since you reaffirmed it. You also need to ensure the person buying your house knows there is a lien against it since the 2nd wasnt reaffirmed; when a title search is done, the lien will show.Originally posted by sp114 View Post
As keepmine stated, you will have to figure out something in order to sell the house with the 2nd either way, as you wont be able to transfer the deed/title.Comment
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I am not planning on selling the house for less, but like most places in the country right now, the property values have taken a big dump over the past several years. I would be happy as hell to sell it for the payoff of both mortgages and walk away even, but just trying to cover all of my bases incase it does not work out that way. I might just have to contact the second mortgage company and see if they would even consider a settelment, so that everything is already taken care of when I go to closing.Originally posted by Pandora View PostTo err is human. To really mess things up, you need a computer.Comment
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First, you will not be on the hook for a deficiency on the 2nd mortgage, because it was discharged in bankruptcy. I would attempt to settle the second mortgage for somewhere between 5 and 10% of your balance due. Then attempt, if you can to sell your house for what you owe on the first or possibly a little more. Your second mortgage has already reported the discharge, they can't report anything further to the credit agencies to mess up your credit. That the first is another story, because you did reaffirm.Filed Chapter 7: 7/3/09
341 Hearing: 8/6/09 - Went Smoothly!
Discharged: 11/30/2009
Closed: 12/16/2009Comment
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You can't sell the house without paying off both liens, regardless if it was discharged in a bankruptcy. The title company involved will never do it, as they can't insure clear title.
You have to get approval for a short sale (for the 2nd mortgage).Filed Chapter 13 02/2006 - Confirmed 05/2006 - Discharged 09/2011
I'm not an attorney. My replies are merely suggestions or observations, not legal advice. As always, consult with an attorney before making any decisions.Comment
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