HOMO 2nd Loan after Ch7; no reaffirm

[InOverHead]

I am hoping for insight/feedback On my 2nd Mtg thru Greentree Servicing post Ch7 BK. I stopped paying on it one yaer prior to filing. I still pay on the 1st. Neither were reaffirmed.

The 3 credit reporting agencies have it as: Included in BK/Unpaid balance reported as loss by credit grantor/closed BK.

Can't say for certain how much longer i will be in the place as mtg company and insurance have been hiking up costs, the answer to what will com eof the 2nd really has a lot to do with how it all plays out.

My question: Based off the reporting has greentree walked away from this?

My fear is that, say i make a go for it with the 1st and pay it down 5-10 more years...

Can the 2nd jump in before if i go to sell and say i owe them the 40k plus before it's sold - that's the way i always thought it would work but now think maybe they have written it off.

Appreciate any and all input.

[justbroke]

Yes, they absolutely can since you pledged your home as "security" for the loan. You have two options. First, you could attempt to settle with the second for 10% or less. Some people are finding that the second is much more willing to settle when there is no way that they could recover their loss. Typically your home would need to be underwater and worth less than the balance on the first. Whether it is economically feasible (or the right thing) to settle the second if you're underwater on the first, is always the first question to answer!

A second option, if you're in the Middle District of Florida, is to re-open your case and move to avoid the second lien. The trick here is that you would have needed to have valued the home in the original bankruptcy case. That could be a difficult hurdle to overcome if you filed Chapter 7 and did not perform an appraisal on the property. In my case, I originally filed as a Chapter 13 and converted to a Chapter 7. I stripped the lien in the Chapter 13 before conversion so I had an actual appraisal and an order granting the lien strip. It would be easier for me to prove the value when my case was filed.

[InOverHead]

Thanks JB!

I thought it had to be a 13 for a lien strip or might have pursued this further a the time...also, is middle district a requirement? im in SEFL

Another question/option i consider is now that the 1st is bordering on what renting costs would be, i consider stopping payments to them entirely. The 1st is 174k and the property is worth maybe 130. How long would it take them to put a lock on the door? Meaning how many months payments can i sock away that could apply towards getting another home? Is there any tactics i can use to prolong the foreclosure?

[InOverHead]

Regarding settling: don't they require payment in full?

Also, don't want to open the can of worms of phone calls. One of the great things about filing was getting them off my back. If i initate contact can they resume calling?

[drowning123]

Settling usually is a percentage, sometimes even as low as 5 percent. As for stirring up a can of worms, I can't say, but do some more research here. Maybe you'll find some more info.

[InOverHead]

Thanks drowning123! I realize what settling is...what i was asking is lets say i settle the 40k @ 10%...I thought they required that 4grand paid in like days days or something. Guess i wouldnt know for sure until we reached agreeable figures, and that requires me to re-open communication, potentially putting me back on that call list.

What this all boils down to is im still trying to figure out what to do with this house i Bk'd that's underwater, and how to come possibly come out ahead. 3 yrs ago when ppl were getting 18-36 months payment free - if i knew today i could stay in the house minimum 18 months without paying i would be all over that option.

I wonder if i stopped paying the first, if they would offer re-finance or other alternatives. Do lenders deal like that after a BK?

[tobee43]

I wonder if i stopped paying the first, if they would offer re-finance or other alternatives. Do lenders deal like that after a BK?

some do....if they can get you to sign on the dotted line they have you right where they want you!

remember florida is a judicial state. you really, one would or could believe would start back to square one. with respect to not wanting to stay or keep the house. if both the mortgage...the 1st and the 2nd were now IIB...then if you stopped both payments now the process would have to begin all over again for the bank.

again, they would have to go through the steps and it still could take another 2 years to get you out, although, i hear they are moving a bit faster nowadays, it still takes a while, it's just the process and the courts themselves.

if you really want to stay then i would consider settling, if not and you want out, i would just stop paying completely both mortgages and save your money to move on until the last logical and practical moment. if this is getting to the point that you can no longer afford the house you don't want to further harm your position by throwing good money after bad.

best of luck!

[InOverHead]

I wanted to stay tobee, at least for as long as i could/so long as monthly costs were fair. What killed the deal is citizens insurance. They removed all credits and made a 1200 policy a 2800 policy. Couple that with 1400 for homwowners and 1600 or so in taxes...it just no longer seems worth it to stay. Renting is a better bet. I regret the day i ever bought a home.

What worries my about not paying is the uncertainty of getting out of house timelines. I can just see myself now stressing wondering...this week, next week??? And at what point do i clear everything out? I've got a lot of stuff for last minute packing, and don't want to live with everything already packed etc...

[tobee43]

if no foreclosure procedures have started that is why i reminded you that florida is a judicial state. it takes time because the process must go through or via the court systems...whereas when you hear all these stories about those thrown out in 90 days, they are in non-judicial states where they don't have to go through the courts to foreclose.

you will have plenty of time. even during the best of times it took over 18 months and plenty of notices prior to being thrown out of one's premises. we rented here first and then did a 100% owner financed deal here in florida. i know our situation is rare, but you are so right, there are so many rentals here it's unreal and really nice ones. if we didn't find this place we would have rented forever after losing our house. really.

can you call another insurance company and see if they can work with you? is that possible? why did they remove the credits? was it because the bank paid them? is citizens different than your homeowners? i'm just a bit confused...(easily done nowadays). you have two insurance companies...and then of course your taxes..(i fought mine and won in lake cty). my taxes went down over 1k.

[InOverHead]

Thanks for the info Tobee - very helpful.

Citizens is the windstorm policy. East of 95 they are the only insurerer afaik. It's a govt run company and i hear they want out of ins bus in Fl - so they make it hard on customers.

Whne i bought the place it required an inspection. The place gave me credit for shutters, roof attachments etc. In June citizens called to say they were sending out an inspector, they are doing it across the board they say becuase of all the fraud. The guy who came out said i may actually get a refund! Said my roof wasnt going anywhere blah blah blah. Got a prelim bill from citizens. Called my agent and told not to worry until final bill comes as adjustments come into effect etc.

Bottom line is no adjustmenst were made. My neighbors and many others are enraged by this, but meanwhile citizens wants to be paid.
Whne i look at the entire situation and costs to live in the house, it just seems like the sensibile thing to do is stop paying. That's why i was posting about the 2nd...hoping to find some incentive to make staying/trying to pay it off worthwhile

[justbroke]

if you're $30K underwater on a $174K first mortgage alone, that is almost 20% underwater. I typically won't suggest settling the second in that case unless the property is appreciating.

No one knew that the recent McNeal decision in the 11th Circuit was going to happen. McNeal is under appeal en banc, but it allowed avoiding a lien in a Chapter 7.

[InOverHead]

What would you suggest for a situation like this?

Do you think i should just walk away, but get as many months possible w/o monthly payment

[justbroke]

That's a financial decision which will require careful study. I would start an Excel spreadsheet and look at the various options every which way! Those options include settling and staying or not settling and not staying (while saving the payments until you are foreclosed upon).

For example, rents may be "expensive" where you are and it's cheaper to just stay and pay rather than leave. You have to work each scenario to your satisfaction.

[TBA]

We are about to do the same thing as JB described - reopening our 7 to remove second - Will keep you up to date with the progress. there is a hearing coming up with our judge this month so our attorney will be attending to see how the judges are reacting and what exactly they want. I will also try to attend although i do not know if i can due to our new arrival.

As to what helped us make this decision - our house is slightly underwater (about 20k - ish) - however, we cannot rent in our area for less than what we are paying on the first mortgage. There are a few other factors, but that was the main one for me. And i am willing to eat the 20k plus expenses to get this done, to know that as we pay down our first, the second wont start foreclosure on our house.

[InOverHead]

Hey TBA,

Where are you located? Whne JB posted that i was under impression it had to do with FL mid district only?

also, why 20k and did you have an appraisal done at time of your filing?