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Foreclosure Consequence of 2nd mortgage after bankruptcy?

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RNParadise

Junior Member
Live in NC. I was discharged from chapter 7 bankruptcy >1yr ago that included the 1st & 2nd mortgage, plus credit card debts from failed business. I have re-built my credit and have been keeping up with both mortgage payments as the result, but in a few months the 1st mortgage interest rate will be adjustable from the “power option or option payments” plan, currently 6.8% and the 2nd mortgage is fixed at 12.8% (which was part of the 80/20% original loan).
I’m afraid I cannot afford both mortgages with the high 2nd mortgage after the adjustable rates. I tried to do loan modification prior and after the bankruptcy with the 2nd mortgage but told I “made” too much money (debt:income) to qualify but they don’t take the entire picture into consideration like I only could afford the minimum payment or interest only payment option of the 1st mortgage.
I would like to keep the house if the mortgage payments are affordable…But I feared soon, it won’t be… but I’m in acceptance of what’s so.
Can’t refinance b/c of the bankruptcy and depreciation in home value. My thoughts are:
- Stop making payments to the 2nd mortgage co. hoping that I may work out a reasonable interest rate like 3-4% b/c it seemed like “they” won’t work with you until you’ve “drowned” (while still making payments to the 1st mortgage as long as I can afford it…)
-Are there any consequences that I need to be aware of with this plan?
-Will the “foreclosure” be on my credit report if I foreclose on the 2nd and/or 1st mortgage (meaning I have to restart building my credit from ground zero again or the bankruptcy took care of this)?
-Can the 2nd mortgage co. foreclose on the house even if I’m current w/ the 1st mortgage?
-If they are not willing to work out an affordable payment option; I will probable con’t to stop payment (2nd) indefinably.
Will I still be responsible for all the accumulated “late payments, late penalties, & forclosure fees of the 2nd mortgage,etc).
-Can the 2nd mortgage co. sue me for “taking” advantage of the bankruptcy protection?
-Any thoughts of being able to negotiable a reasonable fix interest rate with the 1st mortgage co. from the adjustable rate given my history?
-Is there any professional I need to hire to help me negotiate with the 1st or 2nd mortgage (I don’t mind the “hard work” if I could get good results but also won’t mind paying if I could get better results?)
-I work in the medical field-nurse. If I were find work in a different hospital where they check your credit history and background hx-no problem here, can I be turned down for the position solely on my hx of bankruptcy and/or foreclosure? I also “heard” that the employer couldn’t discriminate you from bankruptcy b/c of the bankruptcy protection law…is this true?

Appreciate any advice or experiences. Thanks!!!
 


bigun

Senior Member
First things first.
Did you sign and have a properly filed reaffirmation agreement on the mortgages as part of your bk?
If so, you can be sued for any deficiency balance.
 

RNParadise

Junior Member
No reaffirmation agreement signed

Thank you for helping me through this. I didn't sign any reaffirmation agreement...just usual bk filing paperworks...and I think I heard the bk attorney said during the bk process that if the mortgages (1st & 2nd) were included in the bk, then I would have more options/protection in the event I can't afford payments to walk away/foreclose w/o being liable thereafter as best I can understand. The mortgage statements from 1st & 2nd does mention that they only have the right to the lien if I don't pay. But my husband thought he heard that the bk only apply to the 1st mortgage only...not 2nd. I (we) just want to make the best decisions of the situation on hand. Again, much appreciation for your assistance...any idea about the other questions/points.
 

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