Questions regarding 2nd Mtg Lien Strip >>

[mesa777]

Not sure if I am going to try and keep my home and file for a chp 13 or just let it go back along with the second mtg and try and file a 7, hold on to the home for awhile and then just walk away...

Homes here in AZ have gone down so much that there is a home behind me selling for $165,000.00, have a first mtg of $187000 and a second of $25000... Should I try to lien strip or would I just have more trouble than its worth?

Like the home however dont know if I can barely pay my minimum bills each month how much would be left over to pay a chapter 13 bk as I have been told that in order to do a lien strip that you have to file for a 13...

Has anyone here done this and then converted to a 7? Is that possible? I just dont know if I should just start over completley and just walk away from my home once my ch 7 has been confirmed and such so that I am able to use the mortgage payments in the means test calculations.. Without the house I would only qualify for a 13 and really do not want to go that route and be basically "inprisoned" here in my own home living paycheck to paycheck and not being able to do anything else...

Opinions please....... If lien stripping worth it or is it just more of a hastle? Also if the 1st mtg company does not allow me to confirm the home could they just take it back at any time even if the payments are being made on time?

HELP!

[BKParalegal]

A "Strip off" is relatively easy if the numbers are there to support it. It is getting to the point now that most mortgage lenders are not even objecting. If you convert to a 7, then the strip off is void. It is only valid if you get a discharge in your 13.

Good Luck

[Maximo]

Lien Strip

My attorney said if we are able to go Chapter 7, we would have to pay our 2nd. If it went Chapter 13, we would no longer have the 2nd...he even said not to pay on it. Does this sound correct?

[BKParalegal]

It sounds correct if you are filing a Chapter 13, it sounds incorrect to not pay your 2nd if you are keeping the house and filing a Chapter 7.

Good Luck

[mesa777]

Has anyone here had any experience with a lien strip? Also how is my chapter 13 "payments" calculated? I mean if I can barley pay the bill I have now would the payment for the chapter 13 be set at some reasonable amount? Can someone please shed some light on this.... I am sure lots of bank are getting real nervous with the amount of second mortgages that are out there with people in the same boat as I am... thinking to either keep the house, get rid of the house or do a lien strip...

[BKParalegal]

I have filed many " lien strips" on second mortgages with only a few objections. If you do your homework upfront and make sure the numbers work, the lender usually will not object. In regards to calculating your chapter 13 payment, I am sure there are threads on that, it is too long to type again.

Good Luck

[becky20]

How do they determine value of the house to determine if the 2nd can be stripped? If there is even $1 in equity on the 2nd it secures the entire 2nd mortgage, correct? We have a 1st that is about $132K and a 2nd that is $48K. I'm also in AZ, so the values continue to go down but how do they determine the value? Zillow seems to be wildly inaccurate, valuing my house at around $176K, which is laughable... Do they appraise it? Is the burden on me to pay for the appraisal to prove it's less than the value of the 1st or the company who has the 2nd mortgage to prove it IS secured by the value of the house?

My attorney said that 2nd mortgage strippings aren't allowed, but I'm thinking it must be, sounds like several here have had it done very recently (after BK laws changed)?

Also, if I get locked into my chapter 13 and payments and then the value continues to go down, then does that mean sometime while in my chapter 13 repayment plan that I could file an amendment to make the 2nd mortgage unsecured? Or if, lets say, bankruptcy laws change that make it easier to strip a 2nd mortgage?

[mesa777]

The real estate picture is so bad in the area of PHX that I am in that I am thinking about possibly just filing for chapter 7 and letting the house go back to the bank... I will let them deal with it... I am just no longer going to stress and have a heart attack over a stupid ass home... I can always get another one in about 4-5 years and if I dont guess I will learn to love either apartments or a rental home... either way its way less stress and the so called tax benefits of owning a home, in my case, since I am single do not add up to much....

I am just going to keep current on my payments until after I file and at that point may just "walk away" from this whole housing situation that I got myself into... I look at it this way... if I am going to file for bankruptcy might as well go out with a bang as real estate my take YEARS to recover and by then may have been able to save up more money than I pay in interest....

[BKParalegal]

In regards to getting the value of your property, most Real Estate agents will do a CMA for free(with the idea that they will be getting the listing, so they might puff the numbers a bit. Let them know upfront you need a quick sale, don't impress me, gotta leave the country quick kind of value). Also check your county tax appraisal to see how they valued it. The trick is keep searching until you find a value that is from a reliable source and is less than what you owe. Don't forget that if you are behind on your house,don't just take the payoff that shows up on your statement, you will need to add your arrears, so that will help you. Also, a lien strip is based on the day you file, if the market took a 50% hit the next day, well your SOL. The attorney you spoke with that said lien stripping isn't allowed, may be because either he lost the case he tried or no one has successfully tried and won before a judge in your district. Shop attorneys until you find one that has or is willing to do it.


Good Luck

[mesa777]

I would have to assume that lien stripping is going to become more common due to the housing values... Maybe most people are filing chapter 7, dont know what the percentages are on each....