2nd mortgage transferred to CA

What is the name of your state? FL

I have a 2nd mortgage and they transferred the balance to SRG. Since it was transferred to them and I'm filing a bk7, will it be discharged? SRG is harrassing me and saying they can foreclose, but according to the paperwork they sent me, they can't.

Thanks...

[HomeGuru]

[quote]Originally posted by down&outinFL
[b]What is the name of your state? FL

I have a 2nd mortgage and they transferred the balance to SRG. Since it was transferred to them and I'm filing a bk7, will it be discharged?

**A: no because the mortgage company is a secured creditor. SRG is a collection agency for the loan hired by your mortgage company.
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SRG is harrassing me and saying they can foreclose, but according to the paperwork they sent me, they can't.

Thanks...

**A: A collection agency cannot foreclose on your mortgage. But your mortgage company as a secured creditor has every right to foreclose on their loan. But since you already are in BK, unless the automatic stay has been lifted, the collection agency should not be contacting you and the lender cannot commence foreclosure action.

[Ladynred]

The kicker is, he's already in a Ch 13 and this SRG is harrassing him while he's still IN the plan ! Is that not a violation of the bankruptcy laws and the automatic stay ?? Does the process of converting to a CH 7 lift the automatic stay during the conversion from 13 to 7 ???

[HomeGuru]

[quote]Originally posted by Ladynred
[b]The kicker is, he's already in a Ch 13 and this SRG is harrassing him while he's still IN the plan ! Is that not a violation of the bankruptcy laws and the automatic stay ??

**A: yes, it would be but this writer has made numerous posts and the issues are really getting confusing. Thus far we have not confirmed if the stay is in effect or not. In many cases, the BK Trustee can lift the stay for only the mortgage lender to foreclose or proceed with foreclosure action and all other creditors have to stay.
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Does the process of converting to a CH 7 lift the automatic stay during the conversion from 13 to 7 ???

**A: No it does not.

[Ladynred]

Thank you, Daaahling for clarifying those points.

You're right, there are many posts on this issue. His/her other question is how does a 2nd mortgage lender foreclose when the primary is NOT foreclosing.. how does that work ?

sorry for confusing you both...I really appreciate the answers....

here's the really confusing part....and clarification....


1.) I've already file BK13 and been to 341.
2.) The 1st mortgage is willing to work with me once I'm out of bk.
3.) I plan to convert 13 to 7 to eliminate unsecured because being in 13 is not working out.
4.) I have to file an amendment to include SRG.
5.) In their paperwork they sent me, it states 'the loan was transferred' AND 'Until the indebtedness is paid in full, or a BK stay order or an order of discharge has been entered, we will continue all collection alternatives.'

Therefore, I will include them in ch7 as unsecured because they are stating in their paperwork that they're a collection agency and NOWHERE does it state ANYTHING about a mortgage. Of course, he verbalizes that they can foreclose, but a payment hasn't been made since '97.

Thank you again for all your answers...

[HomeGuru]

[quote]Originally posted by Ladynred
[b]Thank you, Daaahling for clarifying those points.

You're right, there are many posts on this issue. His/her other question is how does a 2nd mortgage lender foreclose when the primary is NOT foreclosing.. how does that work ?

**A: there is no trick to this. The second mortgage lender as a secured creditor just files foreclosure. Even if the first mortgage is intact (payments current and mortagors are not in default) the second lender has the same foreclosure rights as a first mortgage lender.
Once the second files foreclosure, the first lender generally joins in on the foreclosure action as third party Plaintiff. In some cases, I have seen the first mortgage lender do nothing and just by the sidelines. Then when the foreclosure auction takes place, a rep just goes to see what is going on and if they need to put in a bid. In most cases, this first lender is secured and gets paid. It is the second mortgage lender that ends up eating it most of the time. That is why interest rates on a second mortgage is higher than a first mortgage. The risk to the lender is higher.
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[Ladynred]

Aaahhh... got it

Then it would hardly seem prudent for the 2nd to foreclose if the first must be satisfied before the 2nd gets their cut of it. It would be a really dumb thing to do if the housing markets are at all depressed and the house cannot be sold for the full amount of the loans or greater... then it gets really ugly with deficiencies, etc.

[HomeGuru]

[quote]Originally posted by Ladynred
[b]Aaahhh... got it

Then it would hardly seem prudent for the 2nd to foreclose if the first must be satisfied before the 2nd gets their cut of it. It would be a really dumb thing to do if the housing markets are at all depressed and the house cannot be sold for the full amount of the loans or greater... then it gets really ugly with deficiencies, etc.

**A: you are correct in theory but in reality the 2nd mortgage loan in default becomes a non performing asset and a liability to the lander.
There is always an investor entity that owns the loan be it a government backed company or private company. In the cases of seconds, the investor is usually a private entity. Thus purusant to their regulations, NOI to stockholders etc. the delinquent loan must be addressed and resolved to cut their losses. There is a lot more to this issue but that is the simplistic explanation.

Thank you both for your responses.....

So what you're saying is that I can include SRG as unsecured since they have no ties or references to City Mortgage???

Even in their letters, it says an attempt to collect a debt and until discharged, further attempts will be made.

I can't even contact City Mortgage...I don't have their info.
Could they possibly just have a lien against the house?

Thanks again....

I pulled a title search on our house and the 2nd mortgage company (City Mortgage) is not even listed. It shows US Financial, which is who we originally got the 2nd mortgage with.

Does this mean City Mortgage doesn't even have a lien on the house?

Thanks...

[HomeGuru]

[quote]Originally posted by down&outinFL
[b]Thank you both for your responses.....

So what you're saying is that I can include SRG as unsecured since they have no ties or references to City Mortgage???

**A: no we did not say that. This gets tricky because SRG being only the collection agency has no secured debt but City has. The amount of your mortgage arrears is still a secured debt by virtue of your mortgage.
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Even in their letters, it says an attempt to collect a debt and until discharged, further attempts will be made.

**A: that is just standard boilerplate language.
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I can't even contact City Mortgage...I don't have their info.
Could they possibly just have a lien against the house?

Thanks again....

**A: what do you mean just a lien?
City has the mortgage so they are entitled to foreclose.

[HomeGuru]

[quote]Originally posted by down&outinFL
[b]I pulled a title search on our house and the 2nd mortgage company (City Mortgage) is not even listed. It shows US Financial, which is who we originally got the 2nd mortgage with.

Does this mean City Mortgage doesn't even have a lien on the house?

Thanks...

**A: most likely USF sold the mortgage to City. No matter what, there is a second mortgage recorded on title that has not gone away just because City is not shown as mortgagee of record or SRG is involved in collecting the debt.