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Chapter 7 Bankruptcy With No Reaffirmation - Can Second Mortgage Lender Foreclose

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  • 06-13-2011, 01:52 PM
    lgun
    Chapter 7 Bankruptcy With No Reaffirmation - Can Second Mortgage Lender Foreclose
    My question involves bankruptcy in the state of: New Hampshire
    we were deischarged in 2010 and did not reaffirm and kept paying mortgage. now we are having difficulties. we applied for hamp and were not aproved for we did not meet the 36% line on the first mortgage. they dont consider the seconds amount and they rely on gross not takehome. Well the first wants to have me sign a modification with no change in rate or term just adding the taxes and 2 months behind onto the Principal but what if the second comes around to foreclose after we have signed this new agreement. the PBO (brokers opinion) came in low. So We have a 60,000 defieciency more than my second amount. Is ther anyway to settle or totally disolve my second.
    I am worried they will try to foreclose. How can they if you are active on first. Please help me know the law on seconds and modifications after bankruptcy 7
  • 06-15-2011, 10:46 AM
    Mr. Knowitall
    Re: Chapter 7 Bankruptcy With No Reaffirmation - Can Second Mortgage Lender Foreclose
    The Chapter 7 bankruptcy does not strip down the second mortgage lender's lien. To do that, to the extent that the second mortgage is unsecured by the real estate, you need to go through Chapter 13 bankruptcy. If you owe as much or more on the first mortgage than the property is worth, you can try negotiating with the second mortgage lender - if they understand that they are essentially unable to foreclose, because every penny from the foreclosure sale would go to the first mortgage lender, they may be willing to negotiate (even if grudgingly).

    If you are delinquent on your second mortgage, you are delinquent on your second mortgage. Whether or not you are current on the first is irrelevant to your obligations to your second mortgage lender.
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