2nd mortgage sold

[Tatetytiffany]

Filed bk07 discharged in dec 05. Ist and 2nd mortgage were included in bk and not reafirmed. House has been in foreclosure since april 06. 1st mortgage filed. I answered summons and apparently the judges assistant lost the paperwork so nothing has happend yet. She no longer works for the judge. Just notified by the 2nd that the mortgage has been sold to Solace Financial LLC.
1. Is there anything I should do or not do reguarding this 2nd mortgage.
2. Is there anything the 2nd can or cannot do. (Like call and ask for the money)

I am thinking about getting a real estate attorney. I currently do not have and attorney now.
My bk attorney is no longer in the area.

Thanks for any help

[HHM]

First, what is your intention with the house. If you filed BK and did not reaffirm, I assume that means you are intending to let the house go in foreclosure. (actually, you don't really have a choice since the new law does not, by the letter of the law, allow a ride through).

1. No, nothing you need to do.
2. Probably not, but before I say anything further, I need to know what your intentions are?

[Tatetytiffany]

Reply

We filed in July of 05 so we are under the old law. We were asked to reafirm but are attorney advised against it so we did not.
We would like to stay if at all possible the problem is that the 1st mortgage has and adjustable rate and had risen to 10.5%. We have not made payments for almost 13 months. Basically we are just waiting and doing nothing untill we have to move. ( I know not very smart) We owed $158000 on the first mortgage when we quit paying and $24000 on the second. The house is probably worth $180000. I have no idea what I currently owe on the 1st mortgage. There is no way I can afford the 1st mortgage at 10.5%. The payment was $1450 and that was not including taxes and insurance which are about $260 a month. The second mortgage was $312 a month. We are in Kansas 3 younger kids car payment of $364 no credit card debt but I also pay $400 a month to a 401-k loan which will be paid middle 2008 and we make about $60000 per year. We have saved almost $13000 in the last year because we are not paying the mortgage. Thanks for any help.

[HHM]

Ok, you really have nothing to worry about. I am surprised they have allowed you to make 13 months of non-payment before attempting foreclosure. At this point, foreclosure is a foregone conclusion. I think you should be looking at "renting" at this point as it will be very difficult, if not impossible to buy. After all, you have a chapter 7 BK within the last 2 years, you did not reaffirm and have 13+ delinquint payment, and you are in foreclosure, it is highly unlikely any mortgage company could get you financed.

[Tatetytiffany]

Sell

I agree I don't know why they aren't pursuing this faster. Its funny neither mortgage is reporting any lates just included in bk. My fico credit score has went up to 650. Should I try to sell or would it make much difference. I beleive Kansas law allows 3 month redemption so we can stay until then. Thanks again for you response.

[lrprn]

I beleive Kansas law allows 3 month redemption so we can stay until then.

Here are two links to quick summaries of Kansas foreclosure laws -

http://www.foreclosures.com/www/pages/state_laws2.asp?state=KS

http://www.realtytrac.com/foreclosure_laws.asp?strState=Kansas

"In Kansas, the redemption period for the borrower begins on the sale date, but the length of time varies. The redemption period is 12 months if more than one third of the principal has been paid. Conversely, most loans default before a significant enough principal has been paid, making the redemption period only three months. To redeem, the borrower has to pay the amount of the winning bid in addition to applicable interest and other fees."

Depending on how much of your mortgage you've paid, you could have up to 12 months redemption - check with your lawyer to be sure, of course. Nice to hear that your mortgage company is treating you well on your credit reports - hope that continues!

[Tatetytiffany]

update

As I expected this New 2nd mortgage company called my wife at work and she said they were quite rude and wanted to know our finanicial situation the condtion of the house and if we were packed and ready to move. He said if we allowed the house to forclose we couldn't get a place to rent or another home loan for 7 to 10 years and we would never get a car loan.
What a sleeze bag. Any suggestion? I thought once this was discharged thru the chapter 7 they were no longer suppose to contact us and try to collect the debt.

Solace Finanical, LLC
5401-A South Blvd
Charlotte, NC 28217

[SinkingFast]

As I expected this New 2nd mortgage company called my wife at work and she said they were quite rude and wanted to know our finanicial situation the condtion of the house and if we were packed and ready to move. He said if we allowed the house to forclose we couldn't get a place to rent or another home loan for 7 to 10 years and we would never get a car loan.
What a sleeze bag. Any suggestion? I thought once this was discharged thru the chapter 7 they were no longer suppose to contact us and try to collect the debt.

Solace Finanical, LLC
5401-A South Blvd
Charlotte, NC 28217

That is just a blatant scare tactic!

Finding a place to rent may be a bit trickier. Look for Landlords that do not run Credit Checks. Or ask if BK and Foreclosure will exclude you from approval prior to applying.

If we couldn't buy a car, why have so many Members posted they've gotten new cars after discharge??!! CapOne Blank Check and Ford are both very BK friendly.

They are running scared because they took on a 2nd where they might not see a dime. The primary mortgage Lender gets first dibs from the proceeds of the Foreclosure Sale. If there's anything left over, the 2nd gets the scraps.

Send them a Cease and Desist Letter. "Remind" them the debt was discharged in BK and tell them not to call you or your wife. Be sure to send the letter Registered/Certified. You want that card that shows one of their employees signed that they received the letter. CYA yourself with a paper trail.