Announcement

Collapse

Forum Rules (Everyone Must Read!!!) (updated: 04/28/2015)

Welcome to the Bankruptcy Forum. Bankruptcy (BK) Forum is known as BKForum.com and will be referred to as BKF hereinafter. In order to ensure a long term success of our vibrant community, we have established certain rules and guidelines to which everyone must adhere to. Please take your time to carefully read our rules, before you start to participate in the community.

Things you agree to do:
BKFORUM.com (BKF) users agree to use the search function before starting a new thread. This prevents duplicate discussions and allows for better organized topics.

All BKF users agree to read the sticky posts which may be available at the top of a forum page. These Sticky posts often contain valuable information. They may also outline more rules and guidelines specific for that particular forum, stickies are put in place by that forums moderator(s) or admin(s).

Things you agree not to do:

All BKF users agree not to call people names or write a post simply to make a personal attack, or get a negative reaction; this behavior is not allowed on our forum. The use of derogatory language aimed at anyone will be severely dealt with. There is no need to agree with each other, or to even like each other. However, by signing onto BKForum.com you agree to treat each member and guest with the respect they deserve. No threats or personal attacks will be allowed.

All BKF users agree not to discuss, engage, or encourage any behavior or activity which violates the law. Discussion of drugs, violence, murder, theft, vandalism, fraud or any other issue which could be used to help individuals break the law is strictly forbidden.

All BKF users agree not to "bump" old threads, unless there is a specific benefit to the community by doing so. But in most cases, please don't post in very old threads, instead start new threads.

All BKF users agree not to attempt/use another members account. It is against BKF rules to use any account other than your own. Impersonating another member will result in an immediate ban. It is also against the rules to open more than one account in your own name without permission from a moderator or administrator. If you have been banned for any reason, it is against the rules to open another account. If you were banned temporarily and you are caught using another account you will be banned permanently. Choosing a moniker which is similar in either sound or spelling as a moderator or administrator is strictly forbidden.

All BKF users agree not to private message any moderator, admin, or other member with questions related to their personal circumstances (Questions about the forum or issues with the forum are ok). This forum only works when members share their experience and insights with everyone.

Things you agree not to post:
All BKF users agree not to post any derogatory/racist/or sexist remarks. This includes attachments, links and all information contained within posts, signatures, and avatars, failure to comply with this rule will result in a permanent ban.

All BKF users agree not to post any copyrighted or trademarked information without the express written permission of the owner(s) / proper citation of source.

All BKF users agree not to post any real names, addresses, telephone numbers, email addresses, social security numbers, or any other personal details (their own or other people's).

All BKF users agree not to post links, pictures, attachments, videos, or the like of pornographic content, objectionable material or extreme violence, whether cartoon or real.

All BKF users agree not to use BKF for advertising purposes without a written contract between yourself/company/agent and the administration of BKF. Blatant advertising will result in a ban.

All BKF users agree not to spam the forums. Spam includes but is not limited to posting erroneous, non-relevant-useless, off-topic, or meaningless posts. Spam may also include posts which contain no text, or large areas of blank space between lines. Simply posting emoticons without text is considered spam. BKF is the largest bankruptcy message board and all the content is intended to help other users. Please help us improve the quality of our forum by making sure that your posts are well-worded, spell checked, grammatically correct and syntaxed.

Regarding actions of moderators and administrators:

The forum is no place to air out your opinion or be judgmental of our staff and its capabilities.

All BKF users agree not to abuse or mistreat moderators or administrators. It is against BKF rules to post any information regarding bans or any other action taken by a member of the moderating or administrative team. If you wish to discuss bans or warnings please do so via PM. To place a complaint against a moderator, send a PM to a super moderator. All Moderators are equal, any decision made by a moderator must be adhered to. If a moderator tells you something you do not like, do not go to another moderator looking for a different answer. If you are caught doing this you will be banned. The moderators work as a team and respect the decisions made by their peers and will help enforce them unless an administrator tells them differently.
If you have an issue with how the forum is run, then notify one of our administrator and we will look into the situation. We have in the past and still do appreciate any input that you offer this forum. But critical input and/or judgmental postings towards the staff will result in you getting banned.


Should you find a thread offensive or out of line, then notify a Mod in a PM so they can evaluate the situation and do the action deemed necessary.

All moderators do have active "other" lives outside of the forum and help moderate this forum in their spare time throughout the days and weeks.

If you have a problem with a member or Mod follow the proper channels of reporting it.

BKF reserves the right to delete any posts which contain anti-BKF comments or discussion. Any bashing of moderators or administrators, or any of their discussion or actions will also be deleted, and the responsible posting party(s) will be banned. Any public anti-BKF advertising, communication, or posts on another forum will result in permanent bans as well.

All warnings and bans are decided by individual moderators and administrators. Warnings are preferable to bans however, for serious offenses and repeat abusers bans will go into effect. The length of the bans can vary from several hours to permanent.

All messages posted or sent including through PM are the property of BKforum.com.

All BKF users agree not to advertiser on the forum (Niether by posting, private messaging or using your signature). If you are a company/attorney/legal adviser wishing to advertise on the site or sell a product, you must contact the head administrator and inquire about our advertising packages.

All bankruptcy related opinions expressed on BKForum.com are those of their authors and not necessarily of BKF, its staff or representatives.

You agree not to copy any material/post/content from BKF without written permission from our head administrator .

By posting on this forum you agree to these terms and conditions, including any punishment deemed appropriate by moderators or administrators in the event of an offense.

Administrators/Moderators can change these rules at any time without prior notice.
See more
See less

Squeeze play on 2nd mtg?

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

  • Squeeze play on 2nd mtg?

    Squeeze process on 2nd?

    My 1st mtg is 150K. My home equity line rolled into a 30 yr fixed a year ago – it is also at 150k. The house is currently worth approx 250k.


    I was told by a trusted source “congratulations! – you just won the jackpot!” Please tell me what you think of his suggestion:

    Keep paying the first, stop paying the second which will force them (squeeze) to negotiate or be forced to foreclose. He believes the bank does NOT want to foreclose and would PREFER settle for a lesser amount as they are already unsecured for about 50K. He thinks they may settle for as little as 25k-30k.

    I would need to find a private investor who would loan the cash to make the settlement that would then be given a NEW 2nd on the house and I may have found an investor.
    This process would result in a 1099 from the current holder of the 2nd, but would also create equity for me.

    What information do any of you have that would support this risky option? Is there a way to find out where a reasonable amount a bank would settle for in lieu of foreclosure?

  • #2
    I think your "trusted source" is a fool. Since the HELOC is secured by $100k of equity--a figure which will only increase as you pay down the first mortgage and the house appreciates, why would the lender want to settle for $25k to $30k? It is true that if they want to foreclose, they have to pay off the first mortgage in order to pass clear title, however there is enough equity to make it worth their while.

    Comment


    • #3
      I agree with bcohen. There is no jackpot in that strategy. Only a pipe dream.
      LadyInTheRed is in the black!
      Filed Chap 13 April 2010. Discharged May 2015.
      $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

      Comment


      • #4
        the idea is, the "typical" person who is about to lose their home may have decide to take all valuable assets from the home and sell them (cabinets, granite, AC, stove, etc) leaving the place requiring a lot of expense to bring it back to market presentation. Time, expenses, commissions ... reduces the return on the foreclosure. That - and - the point that most major companies have already sold the note that is unsecured as this and have already rid themselves of the loss on their books. Somebody is probably sitting with a reduced value/investment on the note.

        While I agree that it appears that 100K of potential equity might look like there is something to go after, the presented logic makes an interesting possibility based on the position of the second and the "typical" expectation of what they end up with compared to the value of a home that is in tip-top market value - which is what the 100k of equity is presumed upon.

        Comment


        • #5
          No, I didn't know that the "typical" person vandalizes their house, and strips out items which really can only be sold for peanuts, but which cost a lot to replace. I did know that in some jurisdictions, that "typical" person could be prosecuted for criminal damage to property, and that in most jurisdictions, that "typical" person could be sued for a money judgment--even if deficiency judgments are generally prohibited.

          Also, I didn't know that since "most major companies have sold the note that [it] is unsecured" because that is pure BS. Although the originating bank likely doesn't own the note anymore (they sold it) and the servicing company may not own the note (they may just be a contractor working for the actual owner), someone owns that note, and that someone has the right to foreclose if you default on the loan.

          Furthermore, although I explained it as the HELOC lender having to "repay" the first mortgage in order to foreclose, that is really a simplification. The holder of the note could simply make an agreement with the holder of the first mortgage note to foreclose together, or they could assign the loan in exchange for another similar loan in good standing. The point is that the company isn't going to write a check for $150,000 to begin foreclosure.

          Comment


          • #6
            If the 1st is current the holder of the 1st cannot do anything because it's not in default. If the 2nd decides to foreclose -they have NO CHOICE but to pay the 1st and they get what's left over. That's why the first is called the 1st - they are in first position for repayment when the property is sold. So I don't know where you are getting these opinions about who can do what when the first is current. I'm also confused by your statement that that's it's "BS" and then make a contradictory statement "Although the originating bank likely doesn't own the note anymore (they sold it)" isn't that what I said? They don't own it any more?

            If "someone owns the note" - meaning, the originating lender sold it - the new holder of the note bought it at a discount due to being unsecured. NOBODY buys a note (2nd TD) from a bank that is unsecured. banks manage their loss quickly and don't hold onto bad loans.
            Last edited by jb4lcm; 11-10-2015, 12:16 PM.

            Comment


            • #7
              Actually, investors buy unsecured notes all of the time. But that's beside the point.

              If the current owner of the note bought it at a deep discount, then foreclosing on $100K in equity could bring a huge profit.

              I have never heard of any lender with that much equity settling for the amount you want to settle for. Ask your reliable source for real life examples of that happening. The argument about the house being stripped is not convincing. If foreclosure doesn't bring a high enough return on their investment, more likely than a settlement is that they will wait until you have paid down the first or the home increases in value before they foreclose. Or maybe they will sell the note along with a lot of others just like it.
              Last edited by LadyInTheRed; 11-10-2015, 11:34 AM.
              LadyInTheRed is in the black!
              Filed Chap 13 April 2010. Discharged May 2015.
              $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

              Comment


              • #8
                Thanks for your input. While I still see some potential in the process, it's losing its appeal. A lot of fight and risk.

                Comment

                Unconfigured Ad Widget

                Collapse
                Working...
                X