Quote Quoting avignon
View Post
I kept the house by making payments on both 1st and 2nd. I did not re-affirm. . . I owe 160k on 1st and 16k on 2nd. My house is valued 93-95k. What happens if I stop paying the 2nd?
Since you did not reaffirm either loan (the correct decision) neither loan can be enforced as it relates to the promissory note. The notes are what you discharged NOT the liens. If either loan is not properly serviced the lender can foreclose its lien as both liens survived your bk.

If you fail to pay the 2nd the 2nd has the right to foreclose. Will it? Probably not except for the fact that both loans are through the same lender.

Quote Quoting avignon
View Post
I filed for a loan modification last week as my mortgage. Would this be considered a re-affirmation?
No. Applying for and obtaining a loan modification under HEMP is not the same as signing a Reaffirmation Agreement which must be entered into before your Discharge and filed with the Court. Nor is the modification going to be considered a "new loan" (although I could see the argument). In fact, if you qualify, one of the documents you will sign is a "discharged in bankruptcy" statement that advises you that if you default under the modification the lender can look to the property only.

The problem you face with a loan mod is the 2nd mortgage. It's nice to resolve your issues with the first but you still have the 2nd hanging over your head. If the market turns around (or since the 2 lenders are one in the same) the lender may elect to take back its property. However, if it does, you have no financial exposure since you discharged the debt in the bk.

Quote Quoting avignon
View Post
Can the 2nd loan be stripped since there is no equity in the house? I was under the impression that if there is no equity the loan becomes unsecured.?
As stated above, the lien passed through your bk unaffected regardless of the equity. If you wanted to strip off the 2nd you had to do a Chapter 13 and get a Court Order stripping off the lien upon entry of the Chapter 13 Discharge.

Des.