What is most likely to happen if we stop making our second mortgage?

[tucson]

I currently have a first and a second mortgage with Bank Of America...Neither was reaffirmed and both were discharged in my BK but we have continued to make timely payments until last month. We want to stay in our house but we simply do not have enough left over every month to pay the second mortgage. Our house was appraised at 150K In January (probably lower now) and we owe 198K on the first and 70K on our second but again both are with the same lender. Whats most likely to happen if we simply stop making the payment on the second? Will Bank Of America foreclose since they own both notes? Any tips? Thanks in advance!

[spidge]

Tough spot to be in when the same company holds both mortgage notes. BofA has been known to be slow but I would think they would foreclose.

[onwards]

they will foreclose. same institution so they don't lose any more by doing that. did you apply for hamp?

[tucson]

they will foreclose. same institution so they don't lose any more by doing that. did you apply for hamp?

No we havent because we can't yet, or at least thats what we are told. Our BK discharged in April but has not closed yet so no one will talk to us at BofA

We were hoping that if they still saw that monthly payment on the first coming in they would look the other way? Wishful thinking

Guess we just wait till the case is finally closed.

[onwards]

No we havent because we can't yet, or at least thats what we are told. Our BK discharged in April but has not closed yet so no one will talk to us at BofA

We were hoping that if they still saw that monthly payment on the first coming in they would look the other way? Wishful thinking

Guess we just wait till the case is finally closed.

If it were different banks, this would be true, but seeing as its the same bank... not even sure if you should be making payments on the first.

With that said, why don't you qualify for HAMP? yes, you need the discharge first, but I got a permanent mod following a discharge recently.

[tucson]

If it were different banks, this would be true, but seeing as its the same bank... not even sure if you should be making payments on the first.

With that said, why don't you qualify for HAMP? yes, you need the discharge first, but I got a permanent mod following a discharge recently.

Thanks for the responses...I have continued to call B of A almost daily but I continue to be told they cannot talk to me until the case is closed which In AZ may be years at this point. Anyone know of another avenue I can call other than the 800 number? Thanks

[lorrieduke]

Assumung you filed Chapter 7 BK and included your second mortgage, you don't have to pay it and there is nothing the bank can do about it should you stop making the payments on the second only. Regardless if both notes are held by the same institution, if the second was discharged in a chapter 7 bankruptcy then that means you no longer owe it and they are forbidden by law to pursue you for it in any way shape or form. It's history and shoud not even be an issue.

But the first, thats a little different. If it was included in a Chapter 7 bankruptcy, that means you surrendered the home back to the bank. If your still making payments on the first note, I suppose they won't forclose until you fall behind, but legally you already surrendered the property when you included the first in the BK.

I don't understand what you mean when say you the bank tells you they can not talk to you until the case is closed? What are you talking about? I'm confused because you said your bankruptcy has been discharged. What is there to close?

Why hasn't you bankruptcy attorney given you the advice your seeking? After all, you paid him already right?
I would call him and have him answer your questions.

[aquavir]

Assumung you filed Chapter 7 BK and included your second mortgage, you don't have to pay it and there is nothing the bank can do about it should you stop making the payments on the second only. Regardless if both notes are held by the same institution, if the second was discharged in a chapter 7 bankruptcy then that means you no longer owe it and they are forbidden by law to pursue you for it in any way shape or form. It's history and shoud not even be an issue.

But the first, thats a little different. If it was included in a Chapter 7 bankruptcy, that means you surrendered the home back to the bank. If your still making payments on the first note, I suppose they won't forclose until you fall behind, but legally you already surrendered the property when you included the first in the BK.

I don't understand what you mean when say you the bank tells you they can not talk to you until the case is closed? What are you talking about? I'm confused because you said your bankruptcy has been discharged. What is there to close?

Why hasn't you bankruptcy attorney given you the advice your seeking? After all, you paid him already right?
I would call him and have him answer your questions.

The bank still owns the house until it is paid off, regardless of whether or not they can come after you for the money. I'm pretty sure the 2nd has at least some kind of lien on the property, and in this case it's the same company, so I would think they would foreclose.

[onwards]

Assumung you filed Chapter 7 BK and included your second mortgage, you don't have to pay it and there is nothing the bank can do about it should you stop making the payments on the second only. Regardless if both notes are held by the same institution, if the second was discharged in a chapter 7 bankruptcy then that means you no longer owe it and they are forbidden by law to pursue you for it in any way shape or form. It's history and shoud not even be an issue.

But the first, thats a little different. If it was included in a Chapter 7 bankruptcy, that means you surrendered the home back to the bank. If your still making payments on the first note, I suppose they won't forclose until you fall behind, but legally you already surrendered the property when you included the first in the BK.

Huh?

Let's sort things out a bit...

BOTH loans are no longer your personal responsibility if they had been discharged in a chapter 7.

BOTH loans still have valid notes and liens. Therefore, a default on EITHER loan can lead to foreclosure - even if that's all that can occur (due to the discharge).

There is absolutely NO difference between the first and second in this regard.

And NOTHING in the bankruptcy code says you automatically "surrender" the property in a chapter 7. That's nonsense. Normally, you choose the "retain and pay" option, which means that everything goes the same as before, but your personal obligation for the debt is discharged. This works only for houses, by the way (prior to 2005, you could use this for things like cars too).

[tucson]

Assumung you filed Chapter 7 BK and included your second mortgage, you don't have to pay it and there is nothing the bank can do about it should you stop making the payments on the second only. Regardless if both notes are held by the same institution, if the second was discharged in a chapter 7 bankruptcy then that means you no longer owe it and they are forbidden by law to pursue you for it in any way shape or form. It's history and shoud not even be an issue.

But the first, thats a little different. If it was included in a Chapter 7 bankruptcy, that means you surrendered the home back to the bank. If your still making payments on the first note, I suppose they won't forclose until you fall behind, but legally you already surrendered the property when you included the first in the BK.

I don't understand what you mean when say you the bank tells you they can not talk to you until the case is closed? What are you talking about? I'm confused because you said your bankruptcy has been discharged. What is there to close?

Why hasn't you bankruptcy attorney given you the advice your seeking? After all, you paid him already right?
I would call him and have him answer your questions.

Both the first and second mortgage were included in the bankruptcy but the home was not surrendered. We chose the retain and pay option but as stated are now having difficulties paying both the first and the second. Our attorney has advised us to stop paying the second and see what happens. Maybe B of A wont want the house back as long as they are getting the payment on the first...Maybe they will we'll just have to wait and see I guess..LOL My hope was someone had already been down this road and could give me some insight..Thanks!

[aquavir]

Huh?

There is absolutely NO difference between the first and second in this regard.

Except that if someone were upside down on the house and the 2nd WAS with a different company than the first it would be a waste of money for the 2nd to foreclose, as they would incur a bunch of legal fees and there wouldn't be anything left after the 1st was paid off...correct?

[onwards]

Except that if someone were upside down on the house and the 2nd WAS with a different company than the first it would be a waste of money for the 2nd to foreclose, as they would incur a bunch of legal fees and there wouldn't be anything left after the 1st was paid off...correct?

Sure - that's the exact strategy I'm using right now with our second. But it has nothing to do with the BK process; the loans were still treated the same from that perspective.

[lorrieduke]

Onwards-

Exactly what me and my husband did was file chapter 7 and we included the house.. the 1st and the 2nd which by the way BofA held the note on both. We "decided" to surrendered the house in our bankruptcy which took care of the 1st and our obligation on the 2nd was discharged by the court. It's not nonsense. It happens. We choose to surrender the house. Maybe thats the part your confused about. It was a choice we made and was not mandated by the court. It was and is a way to protect yourself from a deficiency judgement.

[pcn]

If I'm not mistaken the bk process in general is your protection from a deficiency judgment, as long as the home is included in the bk. Retain, surrender, or redeem are your choices. You are protected if you either retain or surrender. If you redeem, you don't really need protection since you paid it off. If you retain and signed a new contract that would remove your protection, but BOA doesn't do that as a practice.

[aquavir]

Onwards-

Exactly what me and my husband did was file chapter 7 and we included the house.. the 1st and the 2nd which by the way BofA held the note on both. We "decided" to surrendered the house in our bankruptcy which took care of the 1st and our obligation on the 2nd was discharged by the court. It's not nonsense. It happens. We choose to surrender the house. Maybe thats the part your confused about. It was a choice we made and was not mandated by the court. It was and is a way to protect yourself from a deficiency judgement.

No one is arguing that the discharge removes one's liability on the loans, but the original post was asking about whether or not BOA would foreclose if one kept paying the 1st and stopped paying the 2nd. They CAN foreclose and the consensus here is that the likely WILL foreclose in this case (but hopefully not).

Edit: By the way, you have to include your house in the bankruptcy (assuming chapter 7); you aren't allowed to pick and choose which debts you put in your bankruptcy. You get discharged and then you can keep the house or not; they can't come after you for the debt, but they can take your house if you stop paying. No free houses...