what happens if I walk away????

[dm415]

What would happen if I walked away from house,leaving 1st mortage and a 2nd.Upside down on value,These 2 mortages were included in my 7 discharge,I did not reaffirm.

[dm415]

Since the second is worthless,if I decide to keep house,Could I try to get better rate on second,if I walk away they would get nothing.I am try to decide what the right thing to do is..Ive thought about staying in my house until I can get fha mortage,try to get approved,if approved,then walk away so foreclosure would not hurt me in getting loan,There are great deals out there.Any help??

[lrprn]

I'm a bit confused. What's your goal here? Do you ultimately want to keep the house or walk away from it?

[BKINAZ]

Until he (she?) comes back...same question kinda. We have now had the come to jesus moment and realize it is better to walk away from the house. With an 88k second on it (upside down by like $70k...

1. Does the second go away quietly if we let it go to forclosure without filing 7? Of course we would probably file 7...but I still want to ask the question.
2. Does the second go away quietly if we file 7...no choice for them right?

[HHM]

Until he (she?) comes back...same question kinda. We have now had the come to jesus moment and realize it is better to walk away from the house. With an 88k second on it (upside down by like $70k...

1. Does the second go away quietly if we let it go to forclosure without filing 7? Of course we would probably file 7...but I still want to ask the question.
2. Does the second go away quietly if we file 7...no choice for them right?

1. No. Two things may happen with the 2nd mortgage (1) the lender keeps it a collectable debt and will usually sell it to a junk debt buyer to collect, or (2) forgive the debt and issue a 1099-C creating taxable income. Unfortunately, with second mortgages, option (1) is more common, they keep the debt collectable, meaning it becomes an unsecured debt against you. However, if you file BK, that debt gets discharged.

2. Yes, if you file chapter 7, the 2nd mortgage is discharged and there would be no tax consequences, but the lien stays attached to the home.

[BKINAZ]

1
2. Yes, if you file chapter 7, the 2nd mortgage is discharged and there would be no tax consequences.

Just in case anyone else is listening and wants to learn...when you said that, you meant when we file Chapter 7 we have to let the house go, so the 2nd goes...if we try to keep the house to dump the 2nd ,the 2nd does not go away then we still owe on it 100%. Correct?

(selling it to a junk debt buyer) is more common, they keep the debt collectable, meaning it becomes and unsecured debt against you.

I assume they will go after wages or a suit? Or do they just harrass and in more cases than not, probably settle in the end? Obviously...going 7, walking away solves all those ills.

[majicman50]

Foreclosure experience with Citi Mortgage

We filed a chapter 7 last year and were dichaged in Oct, 09. We wanted to keep the house but did not reafirm. Citi told us that with the BK we would not qualify for a new loan and a mod on a 181% LTV is just not gonna happen. Strange thing, they called us one month when the second mgt. was less than 2 weeks late. Is this normal after a BK? Also is there a different criteria for 2nds than for 1st mortgages? Any one with experience with Citi Mortgage in this area???

[Diana2]

Citi called because the 2nd was in the collection department- for being late. They wanted their moneys. Also, keep in mind that ...regardless if you reaffirmed or not, they want their money to the last penny that you have. )

[bulletproof77]

Just in case anyone else is listening and wants to learn...when you said that, you meant when we file Chapter 7 we have to let the house go, so the 2nd goes...if we try to keep the house to dump the 2nd ,the 2nd does not go away then we still owe on it 100%. Correct?

(selling it to a junk debt buyer) is more common, they keep the debt collectable, meaning it becomes and unsecured debt against you.

I assume they will go after wages or a suit? Or do they just harrass and in more cases than not, probably settle in the end? Obviously...going 7, walking away solves all those ills.

If you keep the house and do NOT reaffirm both mortgages and both were included in your Chapter 7: The second keeps a lien on the property for the full amount owed. If you discharge it in a Chapter 7, they cannot 1099 you or come after you, however lien still remains on property until your FIRST mortgage forecloses, at which time the second is wiped off the deed. Been there, done that...That's why Chapter 7 is called the "nuclear option"...

[dm415]

So my non reaffirmed 2nd was discharged,amtrust bank went under,the FDIC now owns my second,they are processing the case now for a 10% settlement.

[bulletproof77]

That is a sweet deal..Especially if you intend to stay in the house...Nice..

[iv65536]

I'm still working on mine. I'm trying to get the second (which I stopped paying several months ago) to settle by threatening to stop paying the first.

[broken64]

Had BOA for 1st & 2nd mortgage, filed ch 7 and did not reafirm. BK was discharged & closed last year, house was sold at auction on June 3 of this year. However, I checked our credit report and it does show included in BK, but BK was dismissed, not discharged. It also shows as it is an open account, which I don't understand why as it has been sold already!

[ldm]

My 2nd filed suit on the note before 1st mortgage could foreclose forcing us to file bk chap 7 since intend to give up home anyway

[majicman50]

Those mgt companies are much more aggresive with 2nd notes. I started my with-holding this month and believe they will call on the 2nd long before they do on the first even tho it's the same company. Since we filed and got discharged from chapter 7 in Oct 09' it's just a matter of how long they let us stay for free. In MO they use both judicial and non-judicial process but the non-judicial is faster so they lean toward that.At this point I'm not sure if paying a $200 a month 2nd will buy us more time or not since MONTH is not flooded with forclosures like other states.