what about a 2nd mortgage "charge off"

[spidge]

I'm not following your attorneys logic either. If you're under water and the 2nd has no equity, they have no power. Even if they get a relief of stay are they really going to foreclose. They'd have to pay the 1st $729K to lose their $50K, highly unlikely they'd do that.

Since there's a chance you'll get pushed into a Chap 13, the 2nd could be stripped so why continue to pay it now. Even if it wasn't stripped you could use Chap 13 to catch up on the rears.

My attorney gave me the opposite advice and said the 2nd with no equity is out in limbo land.

This is what I have come to learn also.

I would make the full payment on the first to show it in expenses and base your 13 payment on that number, if you are able to get into the 13. Otherwise the ch 13 payment will become difficult when you approach the negative amortization limit on your loan and be forced to make the much higher full payment.

[Lajazz947]

Actually, there is some risk to having the HELOC lift stay. That frees them to collect the debt, and they can use whatever means is available to them, i.e. sue you, get a judgment, and go after other assets not protected by the BK estate. However, I think that is a very low risk.

I am in California and I have no assets that are not protected or fall under the exemptions.

I really have NO idea what my house is worth.

I live in a very stable area and the only two homes that went up for sale within a mile of mine in the last 1 1/2 years (one two weeks ago ) literally sold in less than two weeks. The homes were comparable in size although mine has no work needed and is in move in condition.

Now, the sales prices were lower than what I owe (although not by much, $700,000 and $650,000) so that tells me that I am OK.

I had an appraisal in November of 08 that came in at $625,000 so who knows now what it would look like. For me the lower the better as I have no plans to move.

Given this would you stop paying the HELOC?

I know it's just an opinion but I would like to hear anyway.

My continued, continued,continued,continued, continued 341 hearing is coming up next Monday so who knows if it makes a difference now anyway.

Lets see what my TT says about the latest batch of papers I gave them.

[Lajazz947]

This is what I have come to learn also.

I would make the full payment on the first to show it in expenses and base your 13 payment on that number, if you are able to get into the 13. Otherwise the ch 13 payment will become difficult when you approach the negative amortization limit on your loan and be forced to make the much higher full payment.

Thank you, I am going to start the fully amortized payment next month as this neg amortization scares the daylights out of me.

Once I have a BK approved I am OK with the payments.

I was told by Wachovia that once I have a " no asset " report from my TT that they can tack on the late payments onto the balance and start new.

They also said that at that point they would talk to me about modifying the loan. They said that they are working out details on a program but who knows.

[chad9162]

There are many here who are not paying on their 2nd.....

[ShouldWeFile]

Lets see what my TT says about the latest batch of papers I gave them.

Based on your signature, it looks like your case has been continued several times...

I would definitely stay with the advice of your attorney at this time.

Now if you feel very strongly the your attorney is looking at it incorrectly, which is entirely possible based on the discussion so far here, I would think the best thing to do would be to have extensive communications with him or her to determine EXACTLY why you should continue to pay on the 2nd...

[tkharvey]

We have not paid our heloc since January. Haven't filed 13 yet. Waiting to try to modify first mortgage. We did get an "Intent to Foreclose" from our second lienholder but recently had an appraisal which indicates that there is no value (appraisal came in 20K less than what we owe on the first). Our attorney indicated that we could defintely lien strip the second in the 13. If this is your plan, too, I wouldn't waste the money paying the second. Just my thoughts.

[StartingOver08]

Lajazz, do you think your attorney might be trying to build a little extra into your budget in case you get thrown into a 13 by having you pay the 2nd? That way when you strip the 2nd you have extra money to fully amortize the first .....just thinking outloud here.

[ShouldWeFile]

Lajazz, do you think your attorney might be trying to build a little extra into your budget in case you get thrown into a 13 by having you pay the 2nd? That way when you strip the 2nd you have extra money to fully amortize the first .....just thinking outloud here.

Lajazz was asking if it would be best to pay the fully amortized payment on the first (as opposed to intrest only) and stop paying the second, or pay the interest only payment on the first and continue paying the second. The total monthly obligation in both cases must be similar.

eg. intrest only $3000 + 2nd $500, or $3500 fully amortized first mortgage and no payments towards second mortgage (arbitrary numbers, but you get the idea).

[spidge]

There are many here who are not paying on their 2nd.....

Yep.

[Lajazz947]

Lajazz was asking if it would be best to pay the fully amortized payment on the first (as opposed to intrest only) and stop paying the second, or pay the interest only payment on the first and continue paying the second. The total monthly obligation in both cases must be similar.

eg. intrest only $3000 + 2nd $500, or $3500 fully amortized first mortgage and no payments towards second mortgage (arbitrary numbers, but you get the idea).

Exactly.

I would rather pay the fully amortized amount on the first.

I am not paying the first right now either, just saving the money until I see what chapter I am in.

I will either pay the back payments in a 13 or work with the first to add the payments onto the back end on a 7.

I am just a couple of payments behind but I can catch up if they decided to do anything.

Am I missing anything here?

[albacore44]

Exactly.

I would rather pay the fully amortized amount on the first.

I am not paying the first right now either, just saving the money until I see what chapter I am in.

I will either pay the back payments in a 13 or work with the first to add the payments onto the back end on a 7.

I am just a couple of payments behind but I can catch up if they decided to do anything.

Am I missing anything here?

Isn't that a bit risky ?? I was always under the impression that you had to be current on your mortgages to be considered for a Ch-7 ?? I thought being behind would automaticly throw you into a Ch-13.

[chad9162]

Isn't that a bit risky ?? I was always under the impression that you had to be current on your mortgages to be considered for a Ch-7 ?? I thought being behind would automaticly throw you into a Ch-13.

Not if the 2nd is technically "unsecured" this has been discussed many many many many many times on the forum.

[albacore44]

Not if the 2nd is technically "unsecured" this has been discussed many many many many many times on the forum.

well maybee technically. But what if it isn't ??. The only trully way to find out is a professional appraisal. I know mine is close........but not close enough. problem for me is there are so many forclosures sittin.......and no one buyin. So it would be hard to get an accurate appraisal.

[chad9162]

So it would be hard to get an accurate appraisal.

Actually no it wouldn't. You are correct that a "standard" appraisals only looks at square footage and averages prices. I forgot that exact term but the other appraisal would be a fair market value and would take other things into consideration like house condition, your specific market, etc. This would show a NET profit, after including selling cost like realtors fees etc...

If you're close by say $10-20K then yes, the mortgage company will challenge the appraisal but if you're like me and $150K under according to zillow then it won't matter. Everyone knows zillow is inflated.

[albacore44]

Actually no it wouldn't. You are correct that a "standard" appraisals only looks at square footage and averages prices. I forgot that exact term but the other appraisal would be a fair market value and would take other things into consideration like house condition, your specific market, etc. This would show a NET profit, after including selling cost like realtors fees etc...

If you're close by say $10-20K then yes, the mortgage company will challenge the appraisal but if you're like me and $150K under according to zillow then it won't matter. Everyone knows zillow is inflated.

it's still really hard to say. so many vacant forclosures. I am waiting for one 3 doors down, same model/sq ft. as mine to sell. it was walked away from July 4 last year. I think the bank is asking to much to move it. it just sits, weeds growing , custom pool stagnant.