settled 2nd mortgage

[iv65536]

Nichole04 - well done. I tried to get Green Tree to settle a wholly-underwater second by threatening to stop paying the first and risk a foreclosure. They made an unreasonable settlement demand, sent "informational statements", and were calling me. I told them to stop calling and stop sending "informational statements", and now that I have stopped paying on the first, seeking to have the first settle the second. the fact that the first has decided to attempt a foreclosure instead, the second runs the real risk of getting nothing.

As for the foreclosure sale, I have already forced one delay; I will have to see if I can force another. I just made the first's attorney answer my finding that a deed assignment was notarized by someone who is not a notary. No word back yet.

[Mizzou13]

Nichole04 does settling a 2nd Mortgage restart the seasoning period before qualifying for another mortgage? It should not impact the credit report since all mortgages should show IIB. However, could settling a 2nd be considered a short sale or foreclosure for FHA purposes which would require a 3-year waiting period from the date of settlement?

[ohantonio]

Has anyone had any luck with Chase?

[laurannm]

Our 2nd mortgage still send statements (no reaffirm). Our 2nd mortgage is completely underwater so I am going to stop paying this month and attempt a settlement in a few months. Don't forget that your lender still has to abide by state foreclosure laws, so attempting to settle won't have any impact on your ride-through (i.e. the foreclosure process is still the same)

[iwentbk]

Thanks HHM, it looks like I will stick to my original plan of riding though (yes, I know ride through was eliminated when the bk law changed, but both mortgage lenders said I can keep the property as long as I remain current). Has anyone ever had difficulty getting the 2nd mortgage to send statements after discharge? My 1st mortgage still sends them.

So, if I attempt to settle with the 2nd do I run the risk of foreclosure or otherwise jeopardize my current ride through situation? In other words does it hurt to ask, or should I let sleeping dogs lie?

[HHM]

Thank you for sharing this info Nichole04. My situation is similar, and I welcome any comments. I have been discharged via chapter 7 for over a month now with a first and second mortgage with different lenders that were not reaffirmed. I've never been late on the first, and I'm now about 30 days late on the second. House value is maybe $135k, with the first mortgage balance currently at $115k and the second at $26k. I'd like to stay in the house and settle like you did and get rid of the second mortgage lien. Not terribly underwater, but do you think they will settle??

First, how much cash on hand do you actually have to settle. Do you have the money to do it (we are talking payments in lump sum here)?

Second, if by all accounts the home is worth $135K and your 1st mortgage is only $115,000, the 2nd mortgage does have an equity position in the house. If the home were sold for $135,000 and assuming roughly 8% in costs, the second would net $9,200. Might they settle, maybe? If the house is really worth $135,000 will you get a 5% or 10% settlement, probably not. Get a realtor to do a Current Market Analysis and get a better sense of your homes value. Also, keep in mind, the 2nd mortgage does have the legal right to foreclose, so you are gambling that they won't because of the financial circumstances, but it is not unheard of for a 2nd mortgage to start to foreclose.

[iwentbk]

Thank you for sharing this info Nichole04. My situation is similar, and I welcome any comments. I have been discharged via chapter 7 for over a month now with a first and second mortgage with different lenders that were not reaffirmed. I've never been late on the first, and I'm now about 30 days late on the second. House value is maybe $135k, with the first mortgage balance currently at $115k and the second at $26k. I'd like to stay in the house and settle like you did and get rid of the second mortgage lien. Not terribly underwater, but do you think they will settle??

[Freddy03]

Yes, it is possible. Even though the same company may be servicing the loan, odds are, the loans are backed by a different pool of investors, so different rules will apply. (unless the mortgage was through a Credit Union).

Thanks! I'm going to look into it.

[HHM]

Could this be done if the same company holds the first and second mortgage?

My second (HELOC) is about $12K I would love to settle with them after discharge.

Is that possible?

Good Job OP!!!!

Yes, it is possible. Even though the same company may be servicing the loan, odds are, the loans are backed by a different pool of investors, so different rules will apply. (unless the mortgage was through a Credit Union).

[Freddy03]

Could this be done if the same company holds the first and second mortgage?

My second (HELOC) is about $12K I would love to settle with them after discharge.

Is that possible?

Good Job OP!!!!

[HHM]

When you settle with second mortgages, do you have to claim the difference on your taxes as income?

Not if you filed Bankruptcy.

[csonly]

When you settle with second mortgages, do you have to claim the difference on your taxes as income?

[IBroke]

they should make it illegal to just walk away from mortgages and auto loans
u should only be able to discharge credit card and medical debt
to much people taking advantage of this loophole
and everybody else that bought houses that could afford pays the price

Oh really? I thought that you share the opinion that after a BK without a reaffirmation, the bank owns the house anyway? So the bank owns the house and the former owner shouldn't be allowed to walk?

In this country, at least officially slavery is a thing of the past...

[calgirl67]

Guilty

I'm guilty too!

[nichole04]

Scorpion35-first of all, I did NOT walk away from my home. I am paying my first mortgage. I did not force the 2nd mortgages to settle. It was up to them to take my offers and they did. Secondly, part of this money was used to fund my business which failed because of the economic downturn. I did not forsee it coming when I opened my business in the height of the market. I did not friviously just use my home as a piggy bank to go on a huge shopping spree and party with! Everyone's circumstances on this forum are different and I never intended to end up in bankruptcy and I know that most people on here didn't as well. Prior to the economic collapse I always paid my bills on time and had a good credit score. Sometimes things happen that are beyond your control and that is what bankruptcy is there for. You shouldn't be so quick to judge people when you do not know all of the factors that contributed to them filing bankruptcy and since you had to file bk for your own reasons you really have no business getting on this forum and critizing others. Kind of hypocritical don't you think?