Please someone - I am terrified

[Lolabeagle]

I am hoping someone can help me. I have what I think is a unique situation, and I am beyond scared - I am afraid I am going to have a complete breakdown.

I currently have 2 mortgages and a HELOC. I also have 77K in credit card debt. I realized a year ago that I was in trouble, went the debt settlement route, but had to drop out when my salary was cut 10%. I saw an attorney about a chapter 13, wanted to keep my home. Anyway, I ended up losing my job about 2 months ago, my attorney is recommending a chapter 7 and I am surrendering my home.

I noticed on the paperwork for my HELOC, that it only has my first mortgage is listed as a lien holder, it does not show the 2nd mortgage. I have the HELOC through National City that I received in Sept. 2007. They loaned me $40K, and now my mortgage is underwater by that amount. I am scared that they lent me money that I was not entitled to, and they are going to come and put me in prison. I can't believe I never saw this on the paperwork until I went to get my things together for the attorney. Has anyone else ever had this happen? Please help me, I am SO SCARED!

[Lolabeagle]

Please someone - I am terrified

I am hoping someone can help me. I have what I think is a unique situation, and I am beyond scared - I am afraid I am going to have a complete breakdown.

I currently have 2 mortgages and a HELOC. I also have 77K in credit card debt. I realized a year ago that I was in trouble, went the debt settlement route, but had to drop out when my salary was cut 10%. I saw an attorney about a chapter 13, wanted to keep my home. Anyway, I ended up losing my job about 2 months ago, my attorney is recommending a chapter 7 and I am surrendering my home.

I noticed on the paperwork for my HELOC, that it only has my first mortgage is listed as a lien holder, it does not show the 2nd mortgage. I have the HELOC through National City that I received in Sept. 2007. They loaned me $40K, and now my mortgage is underwater by that amount. I am scared that they lent me money that I was not entitled to, and they are going to come and put me in prison. I can't believe I never saw this on the paperwork until I went to get my things together for the attorney. Has anyone else ever had this happen? Please help me, I am SO SCARED!

[CCCrazy]

If you're filing Chpt. 7, just don't reaffirm the mortgages or HELOC and they can't come after you for anything. The debt will be discharged in the BK. POOF - stress gone.

[Lolabeagle]

I guess what concerns me is that the bank will say I was trying to withhold information - which I wasn't! I was under the assumption that liens and mortgages are pubic record, and they should have seen it. I feel so stupid - I should have caught this at the closing.

[AngelinaCatHub]

LOLA: Take a deep breath. You are not going to prison. There is no debtor's prison and if they loaned you money, they knew enough of you to make the loan.

Bk is your solution and when you mentally get to the point of realization that the Bankruptcy laws were made for just your type of problems, you will see hope.

Read all the "stickies" at the front of the C7 forum, much will be revealed. Address at least three bk lawyers with an outline of your finances. Pick one that will work with you and possibly take payments from you. In the mean time, relax, feel blessed for good health and the wisdom of finding an answer. This place is the perfect place for opinions and experience stories as well as some support. You will survive. We have all been there. 'Hub

[Lolabeagle]

Thank God I found this forum, this morning I thought I was going to have a heart attack. I never wanted to cheat anyone, I never thought anything like this would happen!

[LSUTiger32]

There is no debtors prison, but you cannot commit fraud on an application.....that is punishable. As long as you did nothing wrong and they made the mistake you should be fine.

[Lolabeagle]

I went back and looked a copy of the application on line, the only mortgage information it asked for was the balance of the mortgage and the mortgage company. I can't remember what I put - it doesn't ask for 2nd mortgage information.

[Lolabeagle]

I guess what concerns me is that the bank will say I was trying to withhold information - which I wasn't! I was under the assumption that liens and mortgages are pubic record, and they should have seen it. I feel so stupid - I should have caught this at the closing.

[Trixie007]

If I am understanding correctly, you applied for a HELOC and already had a first and second mortgage, but only listed the first mortgage as a debt and did not disclose the second? I would carefully review all the information you provided to them, if you didn't disclose the second mortgage it not only distorted the loan to value ratio, it likely also distorted the debt to income ratio that the underwriters used to determine loan eligibility.

I don't want to freak you out, but it is the borrowers responsibility to disclose all debts/payments when applying for loans - even if there's not a specific line for a specific debt on the application. That being said, I don't know how likely it is the the lender would even notice at this point, or follow up on it if they did - generally this is considered "white collar crime" in the lending industry, and I think rarely gets pursued. Definitely something to bring to you attorney's attention so that he/she can assess, and if nothing else be prepared with answers if the trustee or creditor asks questions.

[Lolabeagle]

OMG! Now I am REALLY scared! I was going to call my attorney tomorrow anyway, but now I am plain terrified.

[AngelinaCatHub]

Hey slow down again LOLA.

Did you do ANYTHING on purpose? I doubt you did. If the list was not correct, you made a mistake. There is a difference in doing something wrong because you do not know better, and doing something wrong to defraud. At this time I wished the other posters (who are very good by the way) had not been so "accurate" with hypotheticals that you and we don't even know exist.

It is also the Banks responsibility to ask questions as well. If you missed something on an Internet form the form was not clear. They also had to go through your credit report that would have all your loans on it. I stand by my belief that this is a molehill not a mountain.

These banks are so busy right now with bankruptcies that I doubt they are going to care about a clerical error and NO you are not going to prison.

Bankruptcy as I said, was made for a new start. Why does ANYONE need a new start??? Well, could it be we all make mistakes?

There is not one of us here that has filled out their forms 100% accuratly. Some may realize it later, and some may not know at all. I missed three creditors on my forms. None the less, they were all discharged.

Now, go get a bubble bath, light a candle and if you have some soft music, take a glass of red wine to your tub and set in peace for an hour.

You will be just fine. 'Hub

[AngelinaCatHub]

Gee thanks guys.

[Lolabeagle]

I would NEVER do anything like that on purpose. If I did I wouldn't be in this forum. I know that they checked my credit report because they made me payoff a couple of credit cards with the loan.

[AngelinaCatHub]

I would NEVER do anything like that on purpose. If I did I wouldn't be in this forum. I know that they checked my credit report because they made me payoff a couple of credit cards with the loan.

Well you see? If there were anything wrong, they would not have given you the loan. It will not be long and you will feel the relief. The first action of relief is determining you must make that decission to bk. 'Hub

P.S. Go get that bubble bath. LOL