"Soft Second" Mortgage

[cin]

Hey folks, I am wondering if I am the only one with a Soft Second mortgage? Mine is from Massachusetts, and the subsidy has to be repaid 100%. So each year my second mortgage goes UP about 25 dollars ....

I was wondering if i takes even longer to get a person out of their home when they have one of these? Or maybe it's wishful thinking, lol....

[justbroke]

From what I can tell, a SoftSecond is not too different than any of the so-called "80/20" or "piggyback" mortgages sold over the last 12 years or so. I don't know what you mean that it must be paid back 100%. It would be treated no differently in a Chapter 13 for lien strip purposes.... if the first circuit allows lien stripping. It reads as though your SoftSecond may be nothing more than a traditional ARM "piggyback" mortgage. I don't see how it is going up over the last few years since interest rates have been really low and I don't think anyone has had an increase in their ARM mortgages over the last 2-3 years.

So, if you're talking about foreclosure... it would be no different than any other bank that held a second mortgage. From what I understand the SoftSecond lenders put funds into a "risk pool" and thus are "insured" on losses due to foreclosure.

So I don't think it's any different when it comes to foreclosures.

[cin]

Thanks JustBroke ... and I can tell it was confusing ... the way it works is the first year I paid 40/month on the second mortgage, and it would go up to 250/month at year 10. Those lower payments during the first 10 years was just to help me get in the door, and I'd have no PMI. The original amount of the second mortgage was 37,600. With the "subsidies" I received it is now at about 45K -- that's what I meant about the subsidies having to be repaid. So in addition to being under water by 70K, my mortgage will keep increasing each year till it gets to 250/month, plus my 950 on the first. It's funny how when you put it in writing, bankruptcy sounds better and better, isn't it??

[justbroke]

Yes, that is indeed very interesting how the payment increases over time and is not an interest rate. I guess the program was meant to help people get into homes that may otherwise not afford the down payment.

If you are $70K underwater on an approximately $220K home, is pretty bad. Bankruptcy is sounding nice when you're 30% underwater.

[cin]

I bought it for 190K ... so it's WAY underwater at -70K. I must have picked the absolute WORST time to buy!!