Stop Paying Second?

[yoyoma51]

Our mortgages (1st & 2nd) were both discharged in our Ch. 7. We have continued to make payments.

BOTH mortgages are with GMAC. First is for approx. $95k, $615/month second for approx. $18k, $222/month. Our home is now worth only about $95.

Because of loss in pay, it won't be possible to keep paying the 1st, 2nd AND property taxes. I think we would be fine if we could get rid of the second.

Anyone have any guesses on what will happen if we just stop paying the second? Seems like they would be foolish to foreclose, or would they?

Your input is appreciated!

[BassBoy]

You could do this and the 2nd may not bat an eye at it. If you elect to do this, be on your toes incase the 2nd lien holder is able to get the foreclosure agreed upon with the 1st lein holder.

[relief13035]

I haven't paid mine in 3 months now haven't heard a thing.

[albacore44]

I haven't paid mine in 3 months now haven't heard a thing.

alright. you have me convinced. once i'm through my ch-7, that's what I'm gonna do.

[yoyoma51]

What about if the first and second are with the same company?

[CCCrazy]

That's my situation...first and second are with the same company - do you think that will make a difference if I stop paying my second? My house is 64K upside down and I owe 45K on my second mortgage.

[relief13035]

My 1st and 2nd are both with CitiMortgage. I haven't paid the 2nd in 3 months. I haven't had a single phone call either.

BUT at the same time - I have been working with the CitiMortgage Executive Response Team on settling the entire thing. My proposal and all the paperwork they asked for has been submitted to settle for 10% of balance. Right now I am just waiting

[CCCrazy]

Thank you for your response, Relief...you give me hope!!! And if I remember correctly, you didn't reaffirm either mortgage? or you just didn't reaffirm the second one?

[relief13035]

Thank you for your response, Relief...you give me hope!!! And if I remember correctly, you didn't reaffirm either mortgage? or you just didn't reaffirm the second one?

I didn't reaffirm either one of them! I am very anti-reaffirmation!

I do know that CitiMortgage IS working on my HELOC settlement. They called me this morning letting me know that it is being processed. I refuse to give up.

[Ifonly]

Well, we have both mortgages with Countrywide and once we went 61 days on the second they sent the "Intent to Foreclose" paperwork. We received that a few more times (one payment made, went to 61 again, that kind of thing). We tried to modify the second mortgage and knowing that they hold both - 1. they said the "rules" don't allow them to modify seconds; and 2. that we didn't qualify financially because even if they lowered the payment, they said we would still have trouble paying. I get their "bank" reasoning, but common sense says I could have been more able to pay if the payment was lower.

So the short answer is, "yes, sometimes they will foreclose on themselves, meaning not care that the 1st is paid and start foreclosing on the second."

I wouldn't even begin to guess what a lender will or won't do during these times. Common sense does not dictate their actions so don't count on their not foreclosing.

Once we realized that Countrywide was simply not going to help us we stopped paying both. I haven't paid the first since February, '09 and haven't paid the second since October, '08. We clicked off the surrender box in our CH13 so we're hoping that makes it very clear to them that the house is now theirs. I'm crossing my fingers on the taxes, HOA fees, etc. I had my lawyer name the HOA with the 2009 dues and the county with the property taxes in my creditor matrix even though he said that the debt wouldn't follow me personally. I wanted to make certain that I wouldn't be on the hook.

[CCCrazy]

Ifonly, if you filed chapter 13 and did not request your 2nd mortgage to be stripped, then I assume that their was enough equity in your home that ate into your 2nd mortgage.

My house is 60K upside down and I owe 42K on my 2nd. I think Relief was also considerably upside down which is why she is able to work out a deal with her 2nd. I hope I can do the same with Wells once I'm discharged.

[Ifonly]

No, there wasn't enough equity in the house to even cover the first. We chose to surrender the house. It was just too much in taxes, HOA's, etc. It's a relief to get away from that debt trap. I'll never be house rich and cash poor again.

[chad9162]

Well based on what you said I'd stop paying the 2nd. No one knows what they will do. But remember that its cost money to foreclose and sell you house....so they'd lose more than 18K. On the other hand, as you pay down your 1st you are giving the 2nd equity or a better position.