Lien Stripping a 2nd mortgage in Chap 13.

[Sky]

I was hoping someone could give me some more info regarding lien stripping a 2nd mortgage in a chapter 13 bk. Is this difficult to do?

Basically with the decline in the housing market our home is worth less than our 1st mortgage. So therefore, from what I understand our 2nd mortgage becomes an unsecured debt, and can be lien stripped in a chapter 13.

Has anyone done this? Can anyone give me there experience with this?

[HHM]

Do you have an attorney?

But yes, if your home is worth less than your first mortgage (and you have more than one mortgage), you can lien strip the 2nd. But you will probably need a certified appraisal verifying the value of the home. And the property must be your primary residence.

As for the how too, you would file a Motion to Vacate Lien. However, describing the ins and outs of the content of that motion is beyond the scope of this forum. I found this Sample Motion (pdf) , but cannot make any judgment as to whether such sample would be sufficient for your purposes and/or district.

[Sky]

[cool33097]

I heard that too from my BK lawyer in case I decided to keep my house but unfortunately I can not even afford my 1stmortgage payment anymore.
Good luck.

[estreeter34]

My wife and I have been talking about this same situation. We built a new home 2 years ago and after all was said and done have a first Mtg of $260k and a Second at $60+k with similiar values in the area now around $220k.... Not to mention our second house that we are upside down on and losing our tenant in an area with many homes (nicer) vacant and for rent. This is what has spurrred us towards planning for BK.

Meeting the attorney this afternoon.

[253BK]

Is there a time frame for this to happen? We refied our home about 12 months ago and have paid up until about 3 months ago

Now we owe 539K on the first and 77K on second home might be worth 540K if lucky

[HHM]

Generally, I would presume the lien strip motion would at least have to be "filed" before confirmation.

[car67]

I think there is a bill in the Senate due to be ruled on by the end of Feb that will allow the Judge to make modifications to mortgages? Parameters unsettled as of yet.

[253BK]

that would be helpful to alot of people

[chaffin]

Someone please help

We filed chapter 13 in Feb of 2006 due to my 8 year old son's medical bills. We pay our mortgage outside of the plan but we had got a second mortgage for our vehicles to get the pmts down. Our problem is the house that we bought and paid over 100,000 for about 4 years ago has a lot of mold and mildew problems and with my sons severe lung problems we can't stay. If I sell my home will I have to pay back all that I owe due to the second mortgage. If so I will not have anything left from the sale of my home to build the one my son needs. We can't rent because he has to have something without carpet, that never had pets, and never been smoked in. I am at the end of my rope and I would appreciate anything anyone can tell me. I have contacted my attorney and he says he is working on it but I need to hurry due to my son's health. By the way, I don't even have the vehicle they took it back. Thanks so much!!

[more$moreProbs]

Hi Sky,

One attorney I spoke to mentioned this right off the bat. My home I believe is worth 460k, my first is 484k and my second is 120k. If I were to pursue chapter 13, I would definately fight to take off the second. Its a huge chunk that would really help if we were to include that in our unsecured.

I have seen a total of 5 lawyers and only one mentioned this. I have asked the other lawyers about it and most of them said its very difficult. The only lawyer that did mention it has over 26 years of experience, I'm obviously leaning toward that lawyer but I wanted to meet with others to make sure he was the right choice.

My advice is to find an experienced lawyer that can help you through a complicated process like 2nd lien "strip off." The only caveat is having to pay a separate fee for it on top of the normal BK fee he charges. I believe its worth pursuing if after the 60 month term I don't have to pay it any longer.