Settle or modify second?

[Toymommy8]

Hi everyone...Tom Eason's info has been awesome on settling with seconds. My question is...I have not paid on second for almost two years. It is completely underwater. I have money set aside to settle for ten percent. But the woman I spoke with today told me she could modify the second, since the first is getting modified, for one percent. Should I keep my money and simply modify it, or is it worth it to settle? I hate to give up that chunk of change in case my family needs it...weighing options. Would appreciate feedback from the knowledgeable people around here!

[Ready2Run]

Really hard to tell without knowing your situation and the amounts, ie. home value & loan values.

Settling will probably affect your credit more than a mod. but at the same time your already two years behind so I assume your credit is already hit by this. I would look at the overall picture. How underwater are you know? How underwater would you be if you settled? What is the difference in payment? After you settle you could probably save the monies back if you didn't have a 2nd mortgage payment.

Regardless, I would hold off until well after the 1st is handled. Some people have had their underwater 2nds simply forgiven after a 1st is modified. I'd give it time and see what happens in the months following the completion of the 1st's mod. All you have to do with the 2nd is nothing..... how hard can that be?