Question on settling the second .... yet again

[marchelala]

Hi,

I trying to get as much info as possible re settling the underwater second after CH7.

On some other forums I saw lots of discussion re the situation where 2nd is purchase money or not...
I understand what's purchase money is... I dont understand what is the difference doesit make when settling ...

Ours is not purchase money...

Thanks

[HHM]

It doesn't matter from a settlement standpoint...or I should say, I don't see how or why it would matter.

Now, I suppose that if you attempted to settle the 2nd without filing a chapter 7 (which is unlikely anyway), I do not think a non-purchase money mortgage qualifies for the 2007 Mortgage Debt Forgiveness Act such that you would be exempt from paying income tax on the difference. However, that issue is moot when you settle after a BK-7 because you have already discharged the deficiency balance.

[marchelala]

Thanks HHM - good to know

[marchelala]

HHM - may I ask you another question sort of related to that...
I keep thinking that we did not reaffirn the mortgage .... nothing was approved witt the court.. But WF ( our 2nd) sent us some paper asking to sign if we want to continue receiving our statements, we did signed it, this will not be consider reaffirmation, right?

[HHM]

Correct, I doubt that document would be considered any sort of reaffirmation.

[2manybills]

HHM, I'm very curious how to start this. We did not reaffirm either one of our mortgages. In our schedules, it stated that $130K of our 2nd was considered unsecured. Do we just start calling the bank to renegotiate the amount of money we owe them? Our equity line is with Wells.