QUESTION
2013 C7, had 1st & 2nd mtg w/same lender. I mod the 1st only & cont to pay. Never heard from the 2nd mortgage.
Asked on Jan 26th, 2021 on Bankruptcy - California
More details to this question:
Our Chapter 7 was discharged in 2013, I modified my 1st mortgage as we wanted to stay in our home. We've never heard anything from the 2nd mortgage. The 2nd was never modified nor did we or were advised to continue paying the 2nd mortgage. What should be my next step with regard to the 2nd? Should I reach out to the 2nd?
1 ANSWER
Bankruptcy Attorney serving Folsom, CA
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Your personal obligation to pay the 2nd was discharged but it remains a lien against the property and can be foreclosed upon. I see this happen when the lender thinks that there is enough equity to make it worhwhile. The equity grows when the property appreciates in value over time or you pay down the balance of the 1st. You should explore whether you are eligible to get a new 1st to pay off the balance of the 1st and 2nd. Otherwise, if you contact the 2nd and alert them to the fact that there may be enough equity to foreclose, they may decide to do so and, if you can't refinance, you may need to sell the property.
Answered on Feb 01st, 2021 at 9:05 AM