2nd Mortgage Dishcharged OR NOT?

[smileybk]

I filed for Chapter 7 back in Feb. of this year. I had a 2nd Mortgage on my home. I recently ran a credit report about 2 months ago and then again 1 week ago and they both said under my 2nd Mortgage "discharged in bankruptcy" balanced owed "$0". So since this is a 2nd mortgage do I still owe this or not? I have been paying on time up until 2 months ago when i got my credit report and seen this and I have not heard anything from them about this. My attorney tells me he cannot find out that I have to and that I need to call them. Well I really hate to call them and bring their attention to something if they have made a mistake. What should I do? What have you expierenced? I still have my 1st mortgage current and we have no equity in our home but decided to keep it none the less as we have 3 children and we love our home.

[b_girl]

In our case, we had both the first and second (HELOC) with the same lender, so it was re-affirm both or none. We chose none and haven't made a payment on either since. Are you re-affirming the first mortgage? I'm assuming you didn't re-affirm the second. In your case, if you have 2 different lenders for the 2 loans, I'm supposing you could re-affirm the first without re-affirming the second...but that would be a question to pose to your attorney to make sure. Course you could try a ride-through on both but it doesn't always work...we wanted to, but our attorney told us that in our state, it's re-affirm or lose the house. Another question to ask your attorney to make sure it will work for you.

[smileybk]

Yes two different banks. In our state we are not required to re-affirm, we can but not required, so I never re-affirmed on either one at my attorney's advice. As long as I make payments timely there is nothing they can do. As I said I do have a 1st Mortgage that I am current and on time, actually never been late even prior to the BK on either of my Mortgages. What do you mean by "Ride Through"?

[keepmine]

It's true the debt was discharged but, they lender still has a security interest in the property and they can commence foreclosure proceedings if you default.
Ride through means, you didn't reaffirm-just continue to pay. Should you default at a later date, you have no liability for any deficiency balance.

[beachymama]

My HELOC (2nd position) charged off my loan ($149,000) as I was trying to complete a short sale. They charged it off at about the 180 day mark. The lender is Chase Home Finance. I have not paid since December 2007.

They did a BPO (brokers price opinion) in April and the result came back that if the house did sell in a short sale, they would get nothing because I am so upside down.

Cheaper to write-off/charge-off then foreclose and get nothing.

Chase did NOT release the lien and probably sold the loan or rights to the loan for pennies on the dollar.

[smileybk]

I am the same way, there is no equity in my home, not even one dollar! So what should I do? I am making my payments on my 1st Mortgage, so do I need to make them on my 2nd? Do i call them and ask them if it has been discharged and wrote off or if I am supposed to be making the payments (I know what that answer will be, I need to be making payments)? I mean can they wait 5 years then come back on me when I do have equity? What are my options here please, I have got to do something soon?????

[ThreadsSnapping]

If you want to keep the house, you need to make the payments on the 1st and 2nd mortgage. Your liability for the loan had been discharged but the lien against the property still exists. Yes they can wait 5 years if they wanted to and then foreclose.

TS

[beachymama]

If you are not selling the home, then I would just continue to make the 1st mortgage payment only. If you are filing bankruptcy, then include the 2nd and try to get the lien released. You may start getting requests to pay from collectors, but you should not be getting a monthly HELOC statement from the 2nd to pay (at least I have not received any calls or letters from Chase (holder of the HELOC now charged-off.) Of course this may change, but it does not change the fact that there is no money for Chase to try and collect.

I have not paid on my first since December and no action has been taken yet (Indymac), but I do not want to keep the home. I have been trying to sell it for over 2 years.

[b_girl]

Ride through means that you keep the collateral (in this case, your house) without re-affirming and continue to make payments--as long as you do, they will not take the collateral away from you. The old law allowed ride throughs, the new law doesn't in all areas. Unfortunately, our area is one of those where ride throughs on mortgages isn't successful, so you are definitely fortunate there. However, IMO, you need to make the 2nd mortgage payment in order to be safe, but I would check with my attorney if I were you.

[blaze]

Hey smileybk - I am in a similar situation and was just about to post a question about this - Our case is a little different but the issue is the 2nd loan like yours which we did not reaffirm (we did reaffirm the 1st) - anyway - we have not recieved a bill from the lender on the 2nd loan - It was discharged in the BK - however I know the lien still exists. I was nervous to call the bank like you but we did and they can't seem to find any info on the loan - and they will not send me a statement - I would like to keep paying on this to keep them from causing trouble b/c we want to stay in our home for a very long time - but here is my question for anyone who can answer - Should I keep making paymetns if they won't send me a statement?? I'll never know if they are even crediting my account. I would be fine to make no payments and just know that the lien is there and I'll have to pay it out of the proceeds of the house sale one day - But can it be that simple? I guess they can't charge interest or late charges any more or can they? If so the payoff amount would keep growing. Should I contact an attny? I really just want to keep paying and not cause trouble and know my home is safe. I know that even though I reaffirmed the 1st they can still foreclose - of course the 1st would get paid first but then they would get their share - there is enough equity for that. Technically even if I pay I am in default b/c BK is listed as a default in our loan agreement. Can anyone answer my main question-- should we keep paying if they won't send a statement? I did not mean to threadjack smiley but I think this is your problem as wlel so maybe someone can help us both with this...

[keepmine]

Can anyone answer my main question-- should we keep paying if they won't send a statement?

Yes.
I'd invoke your rights under Section 6 of RESPA. Note, it must be in writing and I'd send it CRRR.

http://www.hud.gov/offices/hsg/sfh/res/respamor.cfm

Loan servicing complaints
Section 6 provides borrowers with important consumer protections relating to the servicing of their loans. Under Section 6 of RESPA, borrowers who have a problem with the servicing of their loan (including escrow account questions), should contact their loan servicer in writing, outlining the nature of their complaint. The servicer must acknowledge the complaint in writing within 20 business days of receipt of the complaint. Within 60 business days the servicer must resolve the complaint by correcting the account or giving a statement of the reasons for its position. Until the complaint is resolved, borrowers should continue to make the servicer's required payment.

A borrower may bring a private law suit, or a group of borrowers may bring a class action suit, within three years, against a servicer who fails to comply with Section 6's provisions. Borrowers may obtain actual damages, as well as additional damages if there is a pattern of noncompliance.