Settle 2nd mortgage that was IIB

[MrsDixon]

I filed a Chapter 7 in 2008 and did not reaffirm 1st or 2nd mortgage.

There isn't any equity in my house but in a few years there will be. How can I settle this debt without paying the full amount? The credit union hasn't made a peep about the lack of payments.

TIA

[newbie2]

I filed a Chapter 7 in 2008 and did not reaffirm 1st or 2nd mortgage.

There isn't any equity in my house but in a few years there will be. How can I settle this debt without paying the full amount? The credit union hasn't made a peep about the lack of payments.

TIA

Call them and offer to settle the debt to release the lien. Ask them for their workout dept (or whatever the credit union calls that department). Put something in writing to them. Be prepared to have cash in hand for the settlement amount.

Good luck.

[HHM]

The real issue is this

You say the house has no equity...what are the numbers

If you owe $250,000 between the first AND the 2nd, settlement will be tough because there is equity that covers the 2nd mortgage.

However, if you owe $250,000 just on the first (and the 2nd is an additional $50,000) and the house is worth only $250,000, then you stand a good chance to settle.

If your home is underwater just on the first mortgage, you can usually get a settlement of about 10% of the balance owed on the 2nd mortgage. However, you will need the cash on hand to settle, they will not accept payments to settle. The other challenge you have is that the mortgage is with a credit union; credit unions are more prickly about these sorts of things.

[MrsDixon]

I owe $170 on the first and according to Zillow my house is worth $150K. It's an FHA loan if that matters.

I owe $35,246 on the 2nd mortgage.

I typed up a letter tonight and will call them tomorrow. I am going to offer to settle the balance for 5%.

I have paid them $11053.00 since discharge and am letting them know with the add'l 5% it's around 28% of the loan balance that I would have paid.

I'm scared to do this though. I'm very nervous to have the conversation about settlement. If they don't want to settle with me I am prepared to let the first mortgage holder foreclose. The schools around here suck and I need to get my kids in a better school district. I can pay rent for less than my mortgage and be in an awesome school district. Right now I pay almost $300.00 per month for my daughter to go to private school. When my son is ready for school in 2 years it will probably be around $500 for both of them. The demographics for the public school make them a minority @ 4%. And the test scores are 20% lower than state average. I need to get out of here. I'd just prefer to do it the "right" way.

[Road2Freedom]

I know this is a bit old - but bumping to see if there are any updates. I don't think I can PM yet.