anything we can do with our 2nd?

[DEBTCHAINS]

We just filed Ch 7 today. Finally! Lawyer has told us we'll keep the house, etc.
We got a home loan mod a few months ago, didn't save us much money on a monthly basis, just got our loan from an interest only to a fixed. We did get a good rate, and now have a 30 year fixed. However, during this time, we kept paying on the 2nd. It was part of the 80/10/10 we did when we bought. I think it's about 60k, and 400 and change a month. I'm reading a lot of people stopped paying and are settling or getting decent deals. Did we miss that boat? I figured we had to keep paying the 2nd, that they could just "take our house" when we were going through the home loan mod. I'd love to be able to lower that payment and really be in a better financial spot if/when our Ch 7 is discharged. At that point, all we'll have is our mortgage, (and 2nd) and two car payments.

Any ideas? Or are we stuck with the second and just need to try to pay it off sooner than later?

[forgotten]

Do you owe more on the first mortgage than the house is worth? If so, you can try to stop paying on the second for awhile and offer a settlement.

They can't really foreclose if you owe more on the 1st that the house is worth because they have to pay off the first lienholder in order to foreclose.

[DEBTCHAINS]

That's the whole issue.... it's close. I'd say it's pretty close to flat, or maybe 10k or so underwater. That's why it scared me to stop paying them, seemed like it would be in their best interest to be able to have the house.

[forgotten]

That's the whole issue.... it's close. I'd say it's pretty close to flat, or maybe 10k or so underwater. That's why it scared me to stop paying them, seemed like it would be in their best interest to be able to have the house.

Even if you had a little equity, it wouldn't be worth it.
Think of it this way:
1st mortgage: $180k
market value: $190k

They spend acouple thousand in legal/court fees to foreclose on you, then cut a check for $180k to the first mortage company.
If they can sell it they have about $10k in commision costs to the real estate agency, etc. Provided they can sell it at all... All the time they are waiting for it to sell they are out they $180k they paid the first.

As you can see, its not really worth it. If you are offering 20% of what you owe that is a better deal.

[DEBTCHAINS]

But, in a Ch 7.... would we just be delaying out credit repair? Basically, if we stop paying on the 2nd and offer 20%, we'd have to come up with 12k, which we sure don't have.
We're at 31% on our first, so that's all well and good, but the second, I'd like to get some help if possible. I guess it woudln't hurt to call them and ask, but I wouldn't think they'd help. BofA owns it now, (bought Wilshire) and I've heard the horror stories. Chase was HORRID, they still don't have our home loan completed in their system. (although it does show they approved it and have our signed paperwork)

[espo1357]

We just filed Ch 7 today. Finally! Lawyer has told us we'll keep the house, etc.
We got a home loan mod a few months ago, didn't save us much money on a monthly basis, just got our loan from an interest only to a fixed. We did get a good rate, and now have a 30 year fixed. However, during this time, we kept paying on the 2nd. It was part of the 80/10/10 we did when we bought. I think it's about 60k, and 400 and change a month. I'm reading a lot of people stopped paying and are settling or getting decent deals. Did we miss that boat? I figured we had to keep paying the 2nd, that they could just "take our house" when we were going through the home loan mod. I'd love to be able to lower that payment and really be in a better financial spot if/when our Ch 7 is discharged. At that point, all we'll have is our mortgage, (and 2nd) and two car payments.

Any ideas? Or are we stuck with the second and just need to try to pay it off sooner than later?

If you have no equity in the home, a 13 could strip the second mortage, as it is considered unsecured.

[dianissima]

DEBTCHAINS! May I ask you how you did negotiated the loan mod with BOA ? We are trying to Modify with them, also but it is so hard. I called them back on January and they promised that we will have the documents by Mid March. How long the process was for you ?

[DEBTCHAINS]

If you have no equity in the home, a 13 could strip the second mortage, as it is considered unsecured.

We can file a 13 after a 7? We're not doing a 13, we've already filed Ch. 7.

[DEBTCHAINS]

DEBTCHAINS! May I ask you how you did negotiated the loan mod with BOA ? We are trying to Modify with them, also but it is so hard. I called them back on January and they promised that we will have the documents by Mid March. How long the process was for you ?

Our first was with CHASE, not BofA. (they own the second)

The process was horrible, and has taken forever. In fact, it's still not done. After countless calls and being on top of things, being lied to basically, etc, we got the home loan mod, and it UPPED our payment. But, it did get rid of late fees, etc, and from an interst only ARM into a fixed mortgage which is what we wanted. We've made two payments, FEB and MAR, and have yet to get a statement. I called to get one, (need it for the BK) and they don't even show it uploaded in their system yet. They show it's approved and that we signed off on it, but that it takes, "up to 60 days" to get it even loaded, I'm assuming from the first payment. We signed the loan mod Dec 4! I was working WAMU/CHASE A YEAR before this all went down with the economy. I wanted a fixed mortgage before home mods were being done. They told me to pound sand, they had bigger fish to fry. I hate CHASE. Their customer service is soooo bad. I actually emailed the CEO and got responses from their "executive problem fixer upper" department. With that said, I've heard similar horror stories with BOFA. If you need any input on the process, what to expect, etc, let me know. I've been through it all, asked questions galore, and think I have a grip on it.

[dianissima]

Thanks for the info ! I' m affraid that is exactly what we are going trough right now. We are not late yet and they keep telling us that if we will be late with payment we cannot modify. I will wait untill Mid March as they promised to see where the documents are ? We don't even know the amount or terms. We have fixed 20 years but we must lower monthly payments, we are both uneployed now. Good luck to you and all of us...

[espo1357]

We can file a 13 after a 7? We're not doing a 13, we've already filed Ch. 7.

I think so, yes.

As for the loan mod, you have to just hang in there. It took me almost 2 years! And I was ready to walk if it didn't go through. Be patient and work with them, but when it doesn't make financial sense anymore, then look at you other options.

[onthebrink]

Espo,

Did you pay your mortgage during those two years? Two years of free rent sounds like a pretty good deal to me. I am just starting to miss the mortgage payments. I have heard that in order to get the bank, in our case, Chase, to pay attention to a request for a loan mod you need to stop paying for awhile. Would be interested to hear your experience.

Thanks!

[espo1357]

Espo,

Did you pay your mortgage during those two years? Two years of free rent sounds like a pretty good deal to me. I am just starting to miss the mortgage payments. I have heard that in order to get the bank, in our case, Chase, to pay attention to a request for a loan mod you need to stop paying for awhile. Would be interested to hear your experience.

Thanks!

I never missed payments on purpose and was put on several modifications, which put me behind in my payments. In my case, the interest rate was too high, and being upside down as much as I was, I requested a modification (lost my job too and was unemployed for six months).

Anyway, since I was way behind in my mortage and facing lawsuits from 3 ccc's, I decided to go with a 13 to get caught up with the mortage, and to strip the second mortage (unsecured debt). At this time, I was waiting for the loan modification (it is better to wait for the loan modification BEFORE you file a 13 if you can, because if you don't get it modified and want to walk from the home, then you can just file a 7 (if you qualify) and walk free with no repayments. Of course, in a 13, you have to pay something back.

So, I filed during the modification process (my attorney had to send a letter to my servicer allowing for them to modify). so, now I am going to be permanently modified (took over one year), and I will stay in the 13. also note, that I like my home and community, and play to stay in the home long term, so it makes sense for me to stay, and not have to put down 20 percent on another property in a few years. So, you have to consider that also.

Just keep working with the bank. If they don't want to work with you or if the situation doesn't make financial sense, then file the 7 (if you qualify) and you can live there for awhile and walk with no burden.

As for staying 2 years, I am not sure about that. But you can stay at least 6 months, and possibly up to 2 years.

good luck.

[dianissima]

We are facing the same challenge right now, We never missed a payment & mortgage payment is pretty high and hard to pay now when we are both lost our jobs. We cannot pay next month for sure
We were hoping to modify and then file Ch 7. but if Bank will not work with us within month or so we will have no choice but file and then potentially walk away. We are about 10 % underwater based on county treasurer and county taxes and we are at break even based on Zillow (on both first ands second mortgages) but there are 2 homes in our neighborhood for sale and one foreclosure within last 6 month and nothing is selling.
Bank told me that if I stop paying I cannot modify but the process is just painfully long.

[espo1357]

We are facing the same challenge right now, We never missed a payment & mortgage payment is pretty high and hard to pay now when we are both lost our jobs. We cannot pay next month for sure
We were hoping to modify and then file Ch 7. but if Bank will not work with us within month or so we will have no choice but file and then potentially walk away. We are about 10 % underwater based on county treasurer and county taxes and we are at break even based on Zillow (on both first ands second mortgages) but there are 2 homes in our neighborhood for sale and one foreclosure within last 6 month and nothing is selling.
Bank told me that if I stop paying I cannot modify but the process is just painfully long.

if you want to keep the home, you might want to wait for the home to go into foreclosure, and save your money in the meantime for the lawyer fees. Then, you can file for a 13 to get caught up on the late payments on the home, and possibly strip the second if you are underwater. You are not in as bad of a position as you think. The important thing to do is find a job, really.

If you don't want the home, then go with the 7, for sure (if you qualify). However, it seems like you are in a good spot to keep the home, and getting rid of the second mortage could put you in a great spot.