Stuck on stupid; what to do???

[InOverHead]

Anyone that has read my posts knows ive been struggling trying to figure what to do with my underwater house that was included in BK.

Considering the availabilty on 2nd lien strips recently taking place i have contacted my attorney and decided to pursue it.

Will this decision do more harm than good?

Meaning, if it works out that the 1st becomes unmanageable monthly and i stop paying on it, will the fact that there is a 2nd on it prevent, slow-down, or at least make the 1st think?
My thought is right now if i stop paying with the 2nd having a lien, the first will be reluctant to do anything quick considering they would have to pay the 2nd off for a clear title.

am i correct in that thought? i know it applies to me as the lien holder, assume it woukld be the same for the 1st mtg that they woudl have to pay the 2nd if they sold off the property.

Stats FWIW:

1st - 174k
2nd - 40+k

Value = appx 100-150k

it's an i/o loan taken out Dec 2006 with the first 7 years only i/o
bad decison, bad loan i know.

[LadyInTheRed]

The existence of the 2nd will not keep the 1st from foreclosing. The first does not need to pay the 2nd unless the house sells at foreclosure at a price in excess of what is needed to pay off the 1st, including the costs of foreclosure.

[InOverHead]

Wow, that is interesting that i would be on the hook for the 2nd (if no BK filed) but they would not be...

Thank You LITR for the valuable information!

[keepsmiling]

It's good to be the king

[LadyInTheRed]

Wow, that is interesting that i would be on the hook for the 2nd (if no BK filed) but they would not be...

It's a risk the lender takes when accepting a 2nd position as security for a loan. They lose their security when the 1st forecloses, but not their right to go after the borrower if state law allows deficiency judgements.