Foreclosure Concerns-1st Mortgage is Perfect-2nd is in default....interesting situatiuon?

Question

I didn't realize that my 2nd mortgage was not included in the Chpt 13 Bankruptcy filed 3 yrs ago. It was a stupid mistake on my part and I am going through a horrible situation because of it now. I haven't heard from the mortage company since before the bankruptcy, 3 yrs ago, and had no reason not to think the loan ws not included, until out of the blue, I receive a phone call last week, demanding the balance in full. Imagine my surprise! I made a terrible mistake! I would have never let this happend had I realized. Anyway...regardless of that, I am left with a loan, with a major delinquency. It is in default and considered a delinquent mortgage. The loan is 35,000 , originally 27,500. and growing by the minute! I don't know what to do! I don't have the money anywhere, we are trying to rebuild credit, there are no alternatives for me that I can see. Can someone help me? Im so confused and absolutely scared to death. My 1st mortgage is in perfect standing. I welcome all comments!

Answer 1

contact the lawyer that did your bkrptcy. in most cases there is a clause in the pleadings that says "creditors known and unknown". they do not have to be named specifically. the 2nd mortgage holder only has a certain amount of days to bring their claim to the court. chances are you have been contacted by a collection agency. a chapter 13 requires you to make pymts to the trustee. contact the trustee and find out if he has been sending pymts to them. the foreclosure process can take up to two years after they file. you have up to the day you receive the summons and notice of the hearing to get your ducks in a row. make sure you do not fail to answer any complaints served on you. the answer does not have to be any more than "defendant denies all complaints." i would find out for sure who i was dealing with. if they force a foreclosure with a 1st mortgage having priority they won't get any money and they will incur all the fees. they do not want to do that. if you find they do have a claim see if you can negotiate with them. DO NOT PANIC!!!! you have plenty of time to investigate to find the best option.

Answer 2

dear foreclosure,
you're really in a pickle. your attorney or adviser should have given you better advice 3 years ago, but no time to cry about that now. I would call the bank and talk to the person handling the account and negotiate a payment to show good faith that you are willing to pay your debt. The bank may, in most cases deal with you because they can only benefit if you pay. Your strength is your weakness----the second mortgage----they are in second lien position and unlikely to take the property because you are in default...Although, the action taken against you by the 2nd because of nonpayment can alert the first and both banks can call both loans and you will be renting for many years after..Call the 2nd first thing in the morning and be very nice, it may save you to work with them and it will save them more from having to writeoff another bad loan...
let me know how it goes..

Answer 3

I would stay away from "Clark Howard" and deal with the problem at hand.

The 2nd mortgage holder can force a foreclosure sale even though the 1st mortgage holder is current.

You're going to have to refinance the house to clear the 2nd mortgage. Call the 1st mortgage and explain your situation and I think they can rectify this for you. Your payments are going to go up accordingly, but if the 1st mortgage is already current - they are inclined to help you in that department.

Answer 4

SUGGESTIONS & QUESTIONS FOR YOURSELF:

1.) BANKRUPTCY CHPT 13 means you need to repay the outstanding loans. Check your BK papers very carefully. Find the date of your expected repayment grace period. Contact the lawyer who assisted you in filing the BK and ask why he routed you to 13 instead of 7.


2.) HOW FAR ALONG ARE YOU ON DEFAULT NOTICE with the second lender? If your middle FICO score(s) are below 680, you may have no alternative other than

--- a.) Refinance your first mortgage to get cash-out for your 2nd, hoping that your default hasn't shown up on your credit report yet. Any one (1) 30-day delinquency report specially reflecting on a mortgage within the current 12-months may automatically disqualify you.

--- b.) Get a hold of a private lender/hard money lender or a subprime broker/lender specialist who may have available loan programs for borrowers with fico scores as low as 500. Be careful with the finance charges. Watch your Good Faith Estimate and Estimated HUD-1 very carefully. Request for Interest-Only program until you get back on your feet.

>>> Hard Money Lenders' acceptable maximum Loan-To-Value is 70% of your home's current market value; Interest Rates begin at 10% with maximum of 15%. Finance and closing charges are subject to anti-predatory lending laws. Average closing costs is 4% to 6% of loan. Private/Hard Money investors are able to close loans within 7 days.

>>> Subprime Specialists Brokers/Lenders may accept borrowers with up to 2-30 Day delinquencies or a one (1) 60-day within the current 12-months. This program is available here in California. Interest rates are high, closing costs are likewise high; but are still subject to the HUD guidelines against anti-predatory lending laws.

Utilizing Subprime Specialists mean that you be totally cooperative and utmost efficient in the submission of ALL required documents.

I hope this helps you out. Take care always.

Answer 5

That sucks. Lets see if I can offer anything. Can you re-finance your first mort. and use the equity to payoff the 2nd mortgage.

There are mortgage/financial institutes that will purchase your 2nd mortgage note, such as http://www.note.com/. Maybe if you contact them they will be able to point you in the right direction.
You can also check out sub-prime (Hard money) lenders and see if they can help you. Here is a site that lists a bunch of them.
http://www.reiclub.com/hard-money-lenders.php

Maybe a Real Estate investor can help you out. You can assign your note to them, but they'll charge you per month at a higher rate then you were paying before, but it'll save you from foreclosure.
This happens and you'll get through it.
Good luck and wish I could be more helpful.
or quick claim it to someone, but with the agreement you retain title when the lona ($35,000 plus any fees) is paid.

Answer 6

Call Clark Howard. www.clark howard.com.

Answer 7

http://www.unclaimedhouses.com