questions on 2nd mortgage

[salms50]

We kept our house in through our BK. We have a 1st & 2nd mortgage. I thought my lawyer was going to reaffirm them but the agreements were never filed. Now, i just checked our credit report (we are 35 days past our 341 hearing) and i see that our 2nd mortgage company has included the debt into bankruptcy discharge and it says account closed. Why in the heck would i ever pay the payment if they are not going to report it to the credit bureaus & it shows discharged in bankruptcy? Does anyone have any thought on this? I know they cannot foreclose on our home since they are in second lien position and we are current on both mortgage payments. But, what is the "bad" that can come out of it if i don't pay monthly? I am also no longer able to pay online either.

[lrprn]

...what is the "bad" that can come out of it if i don't pay monthly? I am also no longer able to pay online either.

If no reaffirmation agreements are filed (and in normal debt circumstances most bk lawyers advise against signing reaffirmation agreements), the lender lists the account as IIB (included in bankruptcy). This is accurate since the agreements were not filed - the loans were included in your bankruptcy.

As long as you continue to pay your loan payments on time every month, the lender has no reason to want to seize your house to sell it. Most mortgage lenders have more surrendered properties right nw than they know what to do with anyway. The last thing they want to do is lose the payments you are making and exchange that for getting no payments at all.

Many lenders no longer allow online access to pay during bankruptcy. Since no reaffirmation agreements were signed, the lender has no reason to allow you to pay online through the lender any longer. However, many folks in your position use their own bank or credit union to make the payment online. Most online payment systems have built-in reminders as well. Does your bank/credit union have online bill payment?

[salms50]

This is a second mortgage and they cannot seize the property being it is a second mortgage correct? If they are not reporting as paid on time monthly & it shows closed, what would be the benefit of paying the monthy payment?

I do have online bill pay with my bank, but i am not even sure i should pay on it. What would happen if i didn't pay on it? I am current on the payments but if it is showin included in BK, why would i pay on it? We are keeping the house & we do have a first mortgage that i am also current on.

[biotechsolution]

your second mortgage is most likely a secured lien against your home.
If you don't continue to pay the second mortgage they can seize your
house if you go into default, I'm pretty sure. Unless you stripped
off the 2nd mortgage in your bk it will stay secured after your bk.
If you didn't re-affirm your 1st mortgage is will also show IIB on your
credit reports also.

[fltoo]

Depending on your state law, any lien holder with a secured interest in your property can foreclose, even your homeowner's association if it is unpaid.

Sometimes it is not worth it for them since the sale of the house might just cover the 1st lien.

But, when you eventually sell your house, all liens plus accrued interest will be paid before you receive your net proceeds.

[Frogge]

My 2nd mortgage on my old home is technically listed in-house as a "consumer installment loan" and not really a mortgage. We owe way more than it's worth, so pretty much all of their loan is unsecured. I thought this may change the way they approach my debt in BK.

Is this your situation, Salms? (negative equity) Does anyone know if this changes the way the creditor approaches your debt?

[fltoo]

Two questions Frogge

Are you keeping your house?
Does the "installment loan" have a recorded lien on your house?

[salms50]

I do have negative equity at this point. My 2nd mortgage is not recorded as a lien against my property and it does show up on credit report as installment loan. I do plan on staying in this house forever. So, if i never refinance, or sell the house, how would this ever be an issue?

[Frogge]

Two questions Frogge

Are you keeping your house?
Does the "installment loan" have a recorded lien on your house?

No.. this is not our current home and we are not keeping it.
Yes.. to my knowledge they recorded the Deed.