Second mortgage question

[Lorhel]

What is the name of your state? INDIANA

I need to know the facts about my situation, I have tried everything possible and still cannot come to a solution. I was divorced one year ago. I have no children. Married for 13 years. Ex moved out, his name is still on both the primary and secondary mortgages. The second is a home equity line of credit (big mistake I know) I have tried refinancing in my name only with my first mortage. Do not qualify. I have tried putting both loans together, for one payment, cannot do that. My ex has been paying on the second mortgage since he left. Our divorce decree states I will hold him harmless from the first mortgage and he will hold me harmless from the second.

My problem is he is going to stop paying on the second in a few months. I simply cannot afford to pay all of the second mortgage. He cannot help me at all. This leaves me to pay both. I cannot sell this house, I have tried that, but the problem is the second mortgage co. overappraised the home. We owe $88,000. This home is only worth $72,000. The second mortgagee agreed to a short sale, but that left me with what they said would have been the equivelant of a foreclosure, and I could not pre-qualify, had I sold this home, for a home even at $40,000. Basically I am screwed no matter what I do. I have filed a chapter 7, it is not final yet. I have intended on re-affirming both mortgages, so that I could stay here.

I tried the for sale by owner route, and got no where, the other problem is, I really don't want to have to move, if I could work out some way to pay. I have been working full and part time for over a year now, and it has taken its toll on me, I don't know how much longer I can do both jobs.

Do I have any options? What if I put both of these loans on the chapter 7, what would happen to my ex? (Again, his name is on both loans)

I need some clear answers, and I thank you very much for any help.

[MortgageGuru]

Put the house into the Chapter 7 and rent somewhere for a few years. If you keep the house and still can't make the payments then it will be foreclosed on anyways. With it in the chapter 7, your next mortgage company can go off of the discharge date if the house was included in it. Financial peace is more important in both the short term and long term.

[Lorhel]

Indiana

Thank you, I have no problem doing that, but would I be relieved of both the first and second mortgage, if I included them in the bankruptcy, if so that is fine. But what about my ex, since his name is on both of these, is he going to be held responsible?

I don't want to ruin anything for him if possible. Does he have to file a bankruptcy also on these two items? He has already refused to do that.

Thank you

[dcw888]

List both first & second on your Chapter 7. If your husband's name was on the loans, he will be liable. But, if your Chapter 7 goes through, will the other debt being erased not free up funds to cover the mortgages? Do not reaffirm, just keep up with the payments. As long as they are being made, they can't foreclose. Check around for a local housing authority, sometimes there are funds or programs to help get you back on your feet.
Are you still in the house? If so, try renting a room out, someone to help you share expenses. Try your best to hang in there. Not knowing all the details, I'm guessing you probably couldn't rent anywhere for what you are paying in house payments. But to be sure, start checking the Sunday newspaper listings...
I was in the same boat a couple of years ago, but my Ex was going to keep the house...instead he just kept the payments & he filed a Chapter 13, which in return, forced me into a Chapter 7. By the time I found out, there was no way for me to make up the payments he was behind. I regret not staying & keeping my home.

[Lorhel]

Thank you for the advice, I sure appreciate it. I have not been able to come to any solid solution yet, but this is definitely helping with my confusion.

[Rhubarb297]

Why would you want to reaffirm the second mortgage? If the debt on the second mortgage makes the total of the mortgages more than the home is worth, that debt is unsecured and will be discharged in a Chapter 7 BK. Really these mortgage companies which knowingly rely on these phonied up appraisals deserve what they get.

Really your BK attorney should be able to clear this up.

I agree with the other post. As things stand now, you're pretty much just renting your house.

I've seen people do Chapter 7 BKs and buy a house at a very decent interest rate six months down the road. I don't really like that because it encourages people to stiff their creditors. That's the way it works though.

[MortgageGuru]

Really these mortgage companies which knowingly rely on these phonied up appraisals deserve what they get.

I completely agree. It hurts the borrower at some point.

[Lorhel]

Indiana

Indiana

I guess the whole problem for me is simply the second mortgage. I have been told that if I would have sold the home, (doing the short sale) that would have been the equivalent of a foreclosure, so me doing that wouldn't allow me to qualify for a different house. (I was looking for a pre approval after I sold this house for something else in the $40,000 range just to start, my own mortgage co would not approve, nor would any one do the rapid refinance/streamline mortgage for the home I am currently in.)

Is it possible for me to not reaffirm with both mortgage companies and walk away from this? I don't want my ex to suffer.

My other problem is I would have no where to go, I would rather stay here, and try if I have to. I have a large dog, which no apartment would take and I wouldn't want to be somewhere without a yard. I'd rather keep on working two jobs just to keep it, but I don't know what happens, if he doesn't pay the second mortgage, although it states he has to in the divorce decree, am I automatically responsible for the entire amount, or could we work out a 50/50 arrangement?

Thank you very much for any replies.