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I am in a similar situation. I fell behind on my 2nd, and tried to pay what I could, but they did not apply the 1800.00 I sent in toward my loan, they put it in a "black hole" until I came up with the entire balance due. I was trying to get a loan modification, and was told it would take 4-6 weeks. Into the 3rd week, I called to check the status, and was informed that my loan was charged-off. We were in the process of filing for bankruptcy, chapter 7, due to 35k pay loss. As far as I am aware, this charged-off loan is still a lien on my home, and cannot be discharged in a chapter 7 bankruptcy. I spoke with the 2nd mortgage collections after the charge off, and worked out a payment arrangement, and she said that there will be 0% interest, and no penalties if I cannot pay. I guess they just want any money they can get at this point.
I am wondering, if I file for chapter 7, does this loan show as late? I know that I can reaffirm this loan, but it must be current.
Also, the bank told me that they would not foreclose, due to the fact that my home has declined in value, and they would probably only collect 10% of what they are owed in a foreclosure, after the 1st is paid.
I am not sure what to do at this point. I meet with my bk lawyer on Monday.
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savior70
Joined: 25 Mar 2009
Posts: 1895
Location: Florida
261.84 Dollars($)
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Hi
This is true that a chapter 7 bankruptcy will not remove the liens on the property. You will have to pay off the second mortgage to remove the lien. As it has been charged off, it will show on your credit score. However, if you pay it off, it will be reported as a 'paid charge off'. I think you can reaffirm the loan, if you think you would be able to pay it off. You're doing the right thing in consulting with your bankruptcy attorney. Do let us know what suggestion he offers you. |
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Guest
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| I did meet with my bk lawyer, she didn't offer much help in the way of what to do with my second mortgage. She did say that in most bk cases, that reaffirming real estate isn't necessary. That the bk court will not be concerned with the mortgages, being that we are filing chapter 7. I am still concerned though, from my understanding everything goes into your bankruptcy, and you must reaffirm what you want to keep. My second mortgage will then leave the collections dept. that I made the payment arrangement with, and it will now go into the bankruptcy dept. of my lender. I am hoping at that time I can make the same arrangement of payments with them. I will keep you posted, I am sure this can take time going through the court system. |
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frenchis19
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| i have a 1st and 2nd mortgage with one bank and a 3rd with another : if i pay the 1 and 2 and don't pay the 3rd , can the 3 forclose on me? or just place a lien on the house? |
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jerry
Moderator
Joined: 17 Oct 2005
Posts: 2617
Location: MICHIGAN
415.55 Dollars($)
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Hi Guest,
I don't know why your bankruptcy attorney said reaffirmation is not necessary. But I believe it is necessary in chapter 7 bankruptcy if you want to keep the property. Have you talked with your lender's bankruptcy dept yet?
Hi frenchis,
It is most unlikely that your third mortgage holder would foreclose on the property in case of a default. If you keep being current on the first and second, you have the least chance of your property being foreclosed by the third mortgage holder. They can put lien on the property, though.
Thanks,
Jerry |
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frenchis19
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Post subject: dealing |
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| do you think they will deal with me on very low persentage return then since they are the 3rd holders |
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frenchis19
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Post subject: ithought |
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| i thought i would offer then 10 thousand because i have been paying on it for 5 years at 8 percent ; it waS A 70 THOUSAND BUT OUR INCOME HAS BEEN CUT IN HALF |
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savior70
Joined: 25 Mar 2009
Posts: 1895
Location: Florida
261.84 Dollars($)
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Hi
What Jerry has said is right. They will, in all probability, not be foreclosing on the property because as a third lender they will not benefit from the foreclosure. If the property is foreclosed, the first and the second mortgages will be paid first and then the third one. With the property value being on the decline, the third lender would be wise enough to understand that they won't be getting much, if at all, from the sale of the house. If there has been a pay cut and your income has been reduced, why don't you arrange a work out plan with the third lender? Have you contacted them regarding this? |
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frenchis19
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Post subject: working it out |
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yes, i have thought about offering thrn 10 thousand and thats all i have because i am not going to sell the house
:; i pay the 1st and 2nd to one bank: if the 3rd bank does not except it then i will stop paying all together |
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savior70
Joined: 25 Mar 2009
Posts: 1895
Location: Florida
261.84 Dollars($)
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Hi
In that case, you can continue making the payments towards the first and second mortgage and stop paying the third one. They will not foreclose on your property. However, if you stop paying, your credit will be affected. |
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benson
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Post subject: charge off |
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| How do you go about asking a bank to charge your mortgage off instead of trying to get a short sale? |
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savior70
Joined: 25 Mar 2009
Posts: 1895
Location: Florida
261.84 Dollars($)
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Hi
Banks generally charge your mortgage off when they think that they cannot recover money you owe. It's for the accounting and tax purposes that they show the debt as their loss and charge it off to a collection agency. I think it's completely upto them if they'd charge off your debt. I don't think you can ask them to charge off your debt. |
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benard
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my second mortgage was charged off and they said it was an unsecured loan. which i do not get, then i found this. Does anyone know how true this is?
mortgagelawnetwork.com/foreclosure-sale-may-not-end-financial-liabilit y |
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savior70
Joined: 25 Mar 2009
Posts: 1895
Location: Florida
261.84 Dollars($)
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Hi
Like first mortgages, the second mortgages, too, are generally secured by the real estate. You've said that your second mortgage isn't secured. But how did you come to know about that? Even if it's unsecured, you are still personally liable to pay off the loan. The second mortgage holder cannot come after your property, but they can still sue you for non-payment of the loan. |
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gwen35
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Post subject: mortage mistake |
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| i sold a home 4-1/2 yrs ago, now the bank says they made a mistake an paid the wrong mortage off and now wants me to pay for a home i sold in 04 |
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