Posted on: 04th Oct, 2010 01:48 pm
It's been almost 18 months since our Ch 7 was discharged. Both 1st and 2nd mtg were included in the discharge with no reaffirmations.
We've been paying both all along. Have never been late on either loan. However, we owe 317k @ 5.875 on the 1st and 75k @ 9.75 (currently interest only for another 2 years and then 15 years to go after that) and the house is worth about 316k.
I know we can walk away and not be liable for the debt, but what will likely happen if we keep paying the 1st and stop paying the 2nd? The 1st is with Citi and the 2nd with Chase if that makes any difference.
Things are very tight, layoffs are on the board at work and not putting out that $585 /mo on the 2nd would really help to start a savings account in case the axe falls.
Any advice is appreciated.
We've been paying both all along. Have never been late on either loan. However, we owe 317k @ 5.875 on the 1st and 75k @ 9.75 (currently interest only for another 2 years and then 15 years to go after that) and the house is worth about 316k.
I know we can walk away and not be liable for the debt, but what will likely happen if we keep paying the 1st and stop paying the 2nd? The 1st is with Citi and the 2nd with Chase if that makes any difference.
Things are very tight, layoffs are on the board at work and not putting out that $585 /mo on the 2nd would really help to start a savings account in case the axe falls.
Any advice is appreciated.
Hi wbanas!
Welcome to forums!
If you stop paying the second, then the second lender will have the rights to foreclose the property in order to recover his dues. However, if he forecloses the property, he will have to pay off the balance dues of the first lender before he satisfies his own dues.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
If you stop paying the second, then the second lender will have the rights to foreclose the property in order to recover his dues. However, if he forecloses the property, he will have to pay off the balance dues of the first lender before he satisfies his own dues.
Feel free to ask if you've further queries.
Sussane
Thanks for the quick reply. That is essentially what I thought. My feeling is that it would not be in the interest of the 2nd lender to payoff the 1st mtg of 317k in order to try to sell the property and get part or all of their 75k back since the house is currently worth only 316k at best.
Is it likely and/or legal that they could petition the 1st mtg holder to foreclose as well even though I would remain current on that loan? Also, is there a statute of limitations on initiating or completing foreclosure activities?
Thanks so much.
Is it likely and/or legal that they could petition the 1st mtg holder to foreclose as well even though I would remain current on that loan? Also, is there a statute of limitations on initiating or completing foreclosure activities?
Thanks so much.
Hi Guest,
If you are current on your first mortgage, then the lender will not be able to foreclose the property though the second lender asks for it. Normally a foreclosure takes 90 days to complete.
Thanks
If you are current on your first mortgage, then the lender will not be able to foreclose the property though the second lender asks for it. Normally a foreclosure takes 90 days to complete.
Thanks
I thought that since the 1st mortgage was discharged in the Ch 7 proceedings, that the lender could choose to foreclose at any time since I didn't reaffirm the debt. Even if I'd been paying on time and they'd been accepting the payments. Am I wrong on this? Or, is it just unlikely that they would choose to take action as long as I am current on the loan with them?
Hi voyager!
Welcome to forums!
If you're paying the dues though you've not reaffirmed the mortgage, the lender will not foreclose the property. Once you stop the loan payments, the lender will take actions to foreclose the property.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
If you're paying the dues though you've not reaffirmed the mortgage, the lender will not foreclose the property. Once you stop the loan payments, the lender will take actions to foreclose the property.
Feel free to ask if you've further queries.
Sussane