2nd mortgage question...!

[broke2]

I'm looking to file ch13 within 7mo due to reduced income and other reason. I have 1st and 2nd mortgages on my house. Current market value shows between 335k and 350k (i.e. zillow and eappraisal) but I owe 385k on 1st and 80k on 2nd.
I tried to modify but failed with HSBC for the 1st mortgage.

So my question is...what will be the consequences if I stop paying the 2nd before I fill ch13 and keep current on 1st?

[momofthree]

I stopped paying my 2nd mortgage approx 6-7 months before filing. Since we're stripping it, it didn't matter one bit.

[espo1357]

Absolutely no need to pay a second mortgage if you are underwater, unless you want to keep your credit strong.

If you are going to file, then the 13 is the way to go, to save the home and strip.

I stopped paying my second for about one year before I filed. Wish I had stopped paying earlier, when the equity was not there.

Live and learn. I come from a working class family that doesn't even have credit cards, and knows the value of a buck. It was all cash growing up. My parents paid cash for their home and cars, everything.

I was the dumbass that got caught up in the lies of good schools for good jobs, and bla bla bla. Now, I realize that it is just better to pay cash and never take loans out for anything. The rich don't need loans, that is why they are rich.

Good luck.

[broke2]

Hi espo1357 and momofthree,

If I stop paying the 2nd mortgage 4-5 months before filling, can they foreclose my house?

I'm little confused. http://www.bkforum.com/images/smilies/blink.gif. Thanks!

[SMinGA]

Yes they can - but if your figures are correct in terms of what you owe on the 1st & what the house is worth - then its unlikely.

To foreclose, they would need to buy out your 1st mortgage (pay off the $385k) not to mention legal fees for the process. They would take a loss automatically.

If you are 100% intent on filing ch. 13, though, it won't matter anyhow. In the event they moved to foreclose you would just file before they got to the sale date.

[jersona]

Hi espo1357 and momofthree,

If I stop paying the 2nd mortgage 4-5 months before filling, can they foreclose my house?

I'm little confused. http://www.bkforum.com/images/smilies/blink.gif. Thanks!

I don't believe they can since it's under market and has no equity. It's almost considered unsecured at this point. If you don't pay the 1st they can foreclose though to what I understand. I haven't paid my 2nd in like 5 months no problems so far.

[espo1357]

Hi espo1357 and momofthree,

If I stop paying the 2nd mortgage 4-5 months before filling, can they foreclose my house?

I'm little confused. http://www.bkforum.com/images/smilies/blink.gif. Thanks!

If you have no equity, it is absolutely unlikely that the second is going to do anything. They will just sell it for pennies to a junk collection company.

Even if you have equity, I don't think they will go after you.

It was over one year for me. Stupid me should have filed earlier when the market tanked AND I lost my job.

Stay on this forum, find a good lawyer, keeping researching and get the knowledge you need so you won't get pushed around by these creditors that think (and are probably right) that the general public is stupid.

At my age, I am happy to know that I am not a sucker. Still in my 30s, and I can say that with confidence because I am not afraid to do the research and ask questions when I don't get it.

The hell with pride.