current on 1st, defaulted on 2nd 15 months ago, want to make settlement on 2nd

[DoReMi]

My intentions are to keep the home.
I am current on 1st ( major bank) , haven't paid 2nd ( credit union) in 15 months.

I may eventually have to file BK due to mounting consumer debt but likely not this year.

Back in Dec 2010, I made settlement offer with 2nd. They told me I needed to contact their collection agency. I did and they never responded. In March 2011 I contacted collection agency again, again no response but a few weeks later I received short sale papers from the credit union.

My house isnt for sale. I have no realtor nor any buyer.

House valued at $190 back in March 2011. Owe $180K to 1st, $70K to 2nd.


Where do I go from here??

[Pandora]

Credit unions dont generally sell their debts, they keep them in-house and will not release the lien/rights. Usually they will just hold onto their rights until the house either gains in value, or the 1st is paid down; at that point they can enact their right to foreclose. Although, given you state you have equity, they may opt to foreclose anyway, as is their right.

As to where to go from here: if you file BK, a Ch 13 gives you the ability to cram down the 2nd, but only if the value of the home is less than what is owed to the 1st (and in your case, it isnt...) - other option is Ch. 7, to which you pay and stay or reaffirm (not recommended).

Either way the CU can foreclose..should they opt to.