Attempting to get interest rate on 2nd lowered...

[reallynervous]

Our Ch7 was discharged in Sept 08. We did not reaffirm either our 1st or 2nd mortgage. Our 2nd is currently at 9.9% and we are hoping to get it lowered. I spoke with the company who recently purchased our 2nd today and she told me to send them some info (income/expenses/W-2s) and they will consider it under a hardship provision. We currently owe more than the home is worth at present market value. We are current on all payments.

Is there anything that we should beware of in trying to get the rate lowered?

I don't want to do something that would make us responsible for a short sale deficiency or something in the event we would have to sell the home. Our goal is to stay in our home, but my dh's continued declining health is a major concern that could cause us to have to leave if he can't keep working.

Am I correct that since the mortgage was d/c with the BK, they can't ask us to reaffirm as a term of lowering the interest rate?

Thanks in advance for any info you can give us on things we need to consider when trying to get the rate lowered.

ReallyNervous

[StartingOver08]

Your mortgage is discharged. If you modify the mortgage, I would not want to sign anything - because then you are really adding new debt. In order for the lender to change the rate on the discharged note, they will have you sign a new note. A new note = new debt. Don't sign it.

Why don't you try what Liz is trying? Since the second is discharged, just stop paying it. At some point you will be able to renegtiate the payoff. She is working on a 10% payoff in exchange for the release of the lien.

You are in a good position because most second's are much smaller than the first mtg. The likelyhood of the second buying out the first is slim.

[pa308]

Your mortgage is discharged. If you modify the mortgage, I would not want to sign anything - because then you are really adding new debt. In order for the lender to change the rate on the discharged note, they will have you sign a new note. A new note = new debt. Don't sign it.

Why don't you try what Liz is trying? Since the second is discharged, just stop paying it. At some point you will be able to renegtiate the payoff. She is working on a 10% payoff in exchange for the release of the lien.

You are in a good position because most second's are much smaller than the first mtg. The likelyhood of the second buying out the first is slim.

My 1st is 70 odd thousand, second is 7k @about 4% both iib but current. Want to keep house. So if go late on 2nd they may possibly settle for around 700?? Never thought of that.........

[reallynervous]

Thank you for your reply.

Our 1st mortgage balance is $104K. Our 2nd is $76K. Both are pretty high. Current market value is about $155K.

I will make sure she understands we aren't in a position to sign anything new as we can't take on that legal responsibility. Looks like this may not work.

I am wondering if rather than not pay it at all, what might happen if we just started to pay them a lesser amount each month if push came to shove?

Thanks again for your reply.
ReallyNervous