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    bifurcation

    liens survives BK7, got it. If bifurcation of a second mortgage was listed out (secured and undersecured)...after discharge what are they technically entitled to?

    #2
    Originally posted by cookiemom View Post
    lIf bifurcation of a second mortgage was listed out (secured and undersecured)...after discharge what are they technically entitled to?
    100% of what is owed under the contract.

    There is no bifurcation under Chapter 7. The bankruptcy software is why the amounts are split - not law.

    Des.

    Comment


      #3
      Does it matter how long ago?? I know a lot has changed over the years. Can they be held to at least the market value of when discharged? I have appraisals from that time. This was 13 years ago and they are coming back to demand original + accrued interest. When only 25% of note was listed as secured.

      "undersecured creditors deserve appreciation misses the reality that appreciation derives from more than rising markets. It is also attributable to the debtor’s pay-down of the senior interest and investments in improvements. Even if an undersecured creditor were entitled to market appreciation, nothing justifies access to the value of additional increments produced by the debtor’s post-petition efforts"

      Comment


        #4
        cookiemom

        Similar to your threads here, including this one, I found this on the other forum:

        So more findings..I cannot find anything what so ever saying its against the law to accrue interest as they are. Its legal robbery! And most laws are written tricky i.e. SOL with mortgage is based on the accelerated date. So technically 2 weeks ago starts the clock in MI. I'm hiring an attorney, they won't negotiate without knowing pay off of 1st and I not giving the that if they won't provide me valuable information by responding to my QWR...which is my right and by law they have to respond in 30 days.
        Like so many in your situation, IMHO, you are proceeding under the misguided belief that the lender (or current holder of the note) has done something wrong, is violating some “law” or the Chapter 7 somehow modified its lien rights. None of this happened.

        For better or for worse, you financed the purchase of your home. You signed two separate promissory notes that were secured by two separate mortgage liens against the home. One has nothing to do with the other and both can be assigned, sold, transferred etc to anyone willing to take them as they are “negotiable instruments”. Regardless of who holds the note, the money is owed, subject of course, to the entry of your discharge which is an injunction to collecting under the note, having nothing to do with lien rights.

        You filed Chapter 7 years ago. Chapter 7 does not in any way, shape or form, impact lien rights as it relates to real property. Your attorney should have warned you that the failure to pay the 2nd could, at some point, come back to haunt you. My guess is that the Statement of Intentions filed in your case indicated that you would retain the property and continue to make the payments relative to both the 1st and 2nd (regardless of the term, “reaffirm”). My guess is that Schedule J filed in your case provided a line item for the 1st mortgage payment and a line item for the 2nd. Over the years you chose not to pay the 2nd thinking (like many who read some of the garbage on the Internet) that the 2nd will never foreclose because there is no equity or because the 2nd has to pay off the 1st when it forecloses, something that simply is not correct. In other words, you thought that the 2nd would “go away”.

        The bottom line here is that the current “holder of the note” has a valid lien against the property. The lien is supported by the promissory note you signed when you borrowed the money. The terms of that promissory note - payment of principal, interest, fees, collection costs etc. - are what must be paid in order to get the lien released UNLESS the holder of the note agrees to something else.

        You can hire an attorney to “fight” this but in the end, you will either completely lose or end up in a settlement. One hopes for a settlement but prepares for the loss, especially if there is sufficient equity to cover what is owed on the 2nd lien.

        Sorry to be so blunt and pessimistic but I have seen this way too many times. The lien is there and must be dealt with.

        Des.

        Comment


          #5
          Could i propose that the Bankruptcy discharge accelerates the maturity date of the debt ... puting the lender on a definite. The discharge should accelerate the maturity date because no monthly payments are due.

          Comment


            #6
            You can propose anything you want but such must have a basis in law to be of any merit. What you suggest has no basis in law.

            Again, you misunderstand what a discharge is. You still owe the money. The payment is still due each month. The lender is enjoined from asking for payment, nothing more, nothing less.

            Des.

            Comment


              #7
              Or the states statute of limitations apply to to the accrual interest on note?

              Comment


                #8
                Originally posted by cookiemom View Post
                Or the states statute of limitations apply to to the accrual interest on note?
                Interest still accrues, SOL or no SOL.
                Latent car nut.

                Comment


                  #9
                  Originally posted by cookiemom View Post
                  Or the states statute of limitations apply to to the accrual interest on note?
                  SOL removed the lender's ability to sue you for the note and the accrued arrearage. That is all it does. Nothing more. It doesn't make the debt go away.
                  Or think of it another way.... the CH7 removed your obligation to pay and prevents the lender from even asking you to pay, but not the house's/escrow's obligation to pay off all liens.

                  Comment


                    #10
                    Many of us here have had problems keeping our houses after the Great Recession. We went to the same exact forums like the one made famous by the HAMPster wheel. So it's not like we don't know any tricks to stay in our home without paying full freight. There is no love for the banks here and we would cheer if you succeed. And it's not that we aren't sympathetic to your plight and wish there was a way to magically make the 2nd note get smaller or go away. But that ship has sailed and many of the tricks that used to work don't work anymore. Quite frankly that ship sailed over 5 years ago. No more "show me the note" or other nonsense that used to work with some judges. I hate to say this, but I think you need to pay full freight on the 2nd note including arrears or plan on leaving the house.

                    Comment


                      #11
                      cookiemom Can you do $1220/month vs the contractual payment on the 1st and 2nd? That's $280K 3.25% on a 30 year. It would have been $1140/month last year. I think you should refi out of both and get them out of your life forever. I have to believe the contractual payment on both mortgages have to be much higher vs today. A refi with today's low rates has to be better than trying for a big settlement the 2nd lender won't agree to. Maybe it won't be less than the payment on the 1st, but it's gotta be close.

                      You could get them to discount the 2nd payoff a little bit or threaten to let them foreclose and buy some other property while you squat for 6 months rent free under Michigan law after the foreclosure not paying both the 1st and 2nd anymore. The discount would be the 5% in real estate commissions the bank has to pay to sell your foreclosed home plus the assumed and unseen deferred maintenance on foreclosed homes ($20kish maybe if the lender hasn't seen the inside of your home yet) when the bank sells your property to a real buyer who needs to renovate your house to live in it. They get paid today vs 6 months of squatting plus a new BK filing to run the clock another 2-3 months. The foreclosure will ruin your eligibility to finance another home so there is less downside of a new BK. Meet them halfway and call it a deal and then refi out of both.

                      Comment


                        #12
                        I'll have to see....my taxes are stupid high where I live. My is higher than that now and it has a low interest rate because it was approved for hamp back in 2010 when I thought this was resolved. Did realize I had to hang up with BOA and call back to discuss a different loan when talking them off the ledge the 1st time foreclosure was initiated. It was a 2 year battle that started during my bk. 1st didn't get approved because I was current then didn't qualify because I was behind....then lost my job so unemployment couldn't be factored in as income. As soon as i got a job I emailed the. bank attorneys and have them saying once approved your in the clear. I figured we were talking about the whole house. Young and dumb I guess. Was excited about buying a home was put in to interest only loans to cover overall purchase.

                        Comment


                          #13
                          This house also will not be approved to finance for 280k. There's no way it will appraise at that. Also from my understanding banks only allow now 80% of value

                          Comment


                            #14
                            FHA from certain lenders will do 3.5% down with no overlays (eg. Carrington) with rate and term. Look on the Internet and find chapter 13 mortgages... I know you are not a 13 but they have the troubled credit experience and BK experience to get you through even though you might be eligible for automated underwriting instead of manual. But you need folks who are used to dealing with credit challenged people. Because the 2nd may be charged off, that would be a cashout refi which is 5% down. You cannot work with rookie loan officers who don't understand bankruptcy. In the end, you have to convince the 2nd to accept less than 100 cents on the dollar to make the numbers work or this foreclosure may be on the costliest side with squatting, leaving junk in the house because you can't afford to store it, CH13 filing/relief from stay motion, etc. Understanding the costs of foreclosure from the lender's point of view is key to convincing them to discount it enough for you to refi out since it seems you don't quite have enough equity. And the amount of equity may be less than you think too due to the inflated online valuations such as Zillow.

                            Or maybe you don't have enough equity after all and should dig in for a fight to make the 2nd lender pay dearly for kicking you out without offering an acceptable loan mod. We lost a lot of good tools over the years vs the banksters like "show me the note" so you would be going down with the ship on this one if you can't loan mod or refi in a way that makes sense for you financially.

                            Comment


                              #15
                              I hired a lawyer. I work from home now 100%, my toddler is always with me. toddler. I only have 9pm till about midnight to dedicate to this before 5am wake up. Its overwhelming researching and knowing how my scenario matches up. We submitted a cash offer...I've been saving up to redo my cement driveway that is desperately needed so the basement can then be waterproofed. Thats another push I can show the those two big ticket repairs that are needed I guess.

                              Comment

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