Discussion: Principle Reductions: Wipe Out Your 2nd Mortgage With Bankruptcy

[snapple candy]

I think it has always been an option in BK.

[jhn_plsn]

Originally Posted by Scooterino

So is this 2nd lien stripping not an option now that HR 1106 has been defeated in the Senate? Or was this already part of the BK law?

Availalbe as part of a chapter 13 BK.

[Scooterino]

Well, I guess that gives me a little something to hold onto. Seeing as we've been in the 13 for about 6 months now and no one ever mentioned it to us as an option, I suppose we're going to have to do all the research on it. Will contact our attorney on Monday and see what she has to say though. Our 1st is at 233,000 and the 2nd is at 85,000 (so 318,000) and the market value of it now is about $277,000, so maybe this will help.

[candice]

Well as near as I can figure, HR1106 BK did not pass the senate. This would have helped sooo many home owners. It looks like the Banks have us by the BALLS!!! Countrywide is doing very little for there customers. Chase seems tobe helping their customers with striping off the seconds and modifying the first as well. Between the credit card situation and mortgages, I give up. I have learned one thing I will never own a Bank card again. Does anyone know if you can file BK 13 to strip off your second anyway.?

[candice]

If we can lean strip our second in BK13 why would we need HR1106 to pass?

[jhn_plsn]

Originally Posted by candice

Well as near as I can figure, HR1106 BK did not pass the senate. This would have helped sooo many home owners. It looks like the Banks have us by the BALLS!!! Countrywide is doing very little for there customers. Chase seems tobe helping their customers with striping off the seconds and modifying the first as well. Between the credit card situation and mortgages, I give up. I have learned one thing I will never own a Bank card again. Does anyone know if you can file BK 13 to strip off your second anyway.?

Yes, a lien strip on junior loans is an option in ch 13 with a new appraisal you would have to pay for. Of coarse you would have to be under water on the first mortgage.
The Countrywide websites have been taken over by BofA now. My request for a heloc(originally with CW) modification now states its in active proccessing and not to call until 5/28.
Hoping for the best.

[cahomeowner]

I noticed you mentioned you had to be underwater on your 1st? where did this come from? my BK attorneys did not mention anything about this. they said the values would determine what if any 2nd liens could be stripped.

[candice]

I understand that a lot of people are filing chapter13 to lean strip off there second mortgage. I understand that you have to stay in the program for 5 years and pay a truste while in the plan before the lean is stripped off. You also have to pay something on the second while in the plan for 5 years before the balance is removed. Is this true?? If you have already filed a chapter 7 two years ago do you have to wait for 4 years before you can file a chapter 13??

Candy

[snapple candy]

Candice,
I am not sure about the 5 year thing. May have to ask the attorneys that question or others whom have accomplished it. I hope others share their experience on it for the sake of others wanting to know. I think you are right about the 4 years between 7 and 13.

[cahomeowner]

Originally Posted by Scooterino

Well, I guess that gives me a little something to hold onto. Seeing as we've been in the 13 for about 6 months now and no one ever mentioned it to us as an option, I suppose we're going to have to do all the research on it. Will contact our attorney on Monday and see what she has to say though. Our 1st is at 233,000 and the 2nd is at 85,000 (so 318,000) and the market value of it now is about $277,000, so maybe this will help.

in your case you need to make sure the "value" that is submitted to the courts is below $233,000. if the value comes in over then you would not be able to strip the 2nd. remember an appraisal is just an opinion so you may need to get a couple. any foreclosures or short sales in your area would help bring down the values.

[snapple candy]

Candice,
Alot of these BK attorneys do the minimum for a flat fee. Sometimes you have to put a fire under their arshes (do your homework) to get creative and make them do their job. Good luck. I would try and get BPO or (broker price opinions) if that would do for court purposes. Its cheaper and sometimes free.

[amiesheikh]

Hi Moe,

My husband and I are considering filing bankruptcy. Here's our situation:

I'm a realtor and my husband owns a mortgage company (no current employees right now). Out income has dropped ALOT as most people's have in this line of work. We're racked up about $160K in credit card debt trying to live and pay our first mortgage ($800K), second mortgage HELOC ($350K) on our primary house in VA and the 1st on our property in SC ($140K). We already did 2 short sales on investment props in Northern VA that were in my name, so my credit is shot from mortgage lates and the SS on those 2.

I've already stopped paying a few of my credit cards (b/c the jerks closed my account on account of the SS, so why should I pay them back) and am going to stop the rest. My husband is probably going to stop paying his as well. We are current on our 3 mortgages as of now.

My questions are:

1) We bought our house for $1.1M in 05. Now it's worth about $600K to $750K if we're lucky. Can we get the second stripped and get the first to modify our loan if we declare BR? We are still current on both payments.

2) what will happen if we just stop paying ont he second (it's a HELOC with Navy Federal). Can they foreclose? And what would the first (EMC) do if the second tried to foreclose? We are currently trying to do a short sale on it but don't hav approval yet.

3) for the SC property, which we are still current on, the value is about $120K. If we declare bankruptcy what will happen to that loan/house?